What is, after all, benefit wage?
Benefit salary is the basis of calculation in relation to continued provision, that is, social security benefits.
The benefit salary is an arithmetic average based on the highest social security contribution fees, which correspond to 80% of the entire period in which contributions were made. This calculation does not include the maternity pay and family allowance.
The benefit salary is described in the Article 28 of Law 8,213 / 1991:
“”The value of the benefit of continued provision, including the one governed by a special rule and the one resulting from an accident at work, except the family salary and the maternity salary, will be calculated based on the benefit salary.””
Do you want to know more about it? We have prepared special content on what is benefit wage and step by step to do your calculation. Check out!
What is benefit salary
Although the benefit salary has a payment meaning in its name, it is only a reference calculation base that defines the amount of the benefit. retirement. This happens in cases such as contribution time, age, disability and special, in addition to sickness benefit and accident assistance
Benefit, contribution and initial monthly wages
Knowing what it is benefit wage, we can differentiate it from the contribution salary and the initial monthly income.
The contribution salary is the basis for calculating the contributions of the EHIC. Used by the social security law, in the contribution salary there is an incidence of a percentage of the rate of the insured, in relation to their social security contribution.
The initial monthly income is for insured and non-insured and refers to the first payment of the EHIC to the beneficiary. It is the successor of the process, coming after the benefit salary accounts.
Benefit salary base
Knowing and understanding the benefit wage is the first step in knowing how to calculate it. But it is also necessary to know what are its variable bases for each beneficiary. Are they:
- Contribution time;
- Expectation of survival.
It is important to highlight that the expectation of survival is based on the mortality data of the UK residents, according to the IBGE. This corresponds to the approximate period that the beneficiary will live, considering the age that he is now.
Social security factor
The social security factor follows the same line of calculation as benefit wage: age, time of contribution and expectation of survival. However, there are only two benefits out of the six that use the social security factor in the accounts: retirement by age and by contribution, and in the first, Social Security chooses which is the most advantageous.
Step by step: how to calculate the benefit wage
Even knowing what it is benefit wage, it is necessary to go deeper into the subject so that we know what to take into account and not make a mistake in the calculation. Check it out below.
1. Define the contribution period
Defining the base period for calculating social security benefits is essential and should be the first step in this process. Currently, all contribution time is taken into account to make the calculation
For example, if a person entered the pension system in 2010, they will need to work until 2045 to retire for a period of contribution.
There will be 35 years of contribution and all salaries in that period must be taken into account for the calculation.
2. Identify contribution wages
After defining the benefit contribution period, it is important to identify the contribution wages in that interval.
It is worth mentioning that there is a minimum limit on the value of the contribution salary that corresponds to the category floor, salary floor, legal or normative.
If this floor does not exist, the current minimum wage is considered (£ 1,100). Recalling that the pension ceiling is £ 6,101 and can reach up to £ 6,351.20, if approved by the National Congress. For this, it is necessary to consider the contributions made in the following ways:
- Employee and individual worker: payments paid by one or more companies as a form of remuneration for work performed during the month.
- For the domestic servant: amount registered and paid according to the work and Social Security portfolio. Taking into account the norms where the employment bond and exact amount of remuneration.
- Individual taxpayer: remuneration earned by the employee exercising self-employed activities for one or more companies.
- Optional insured: fit this type of enrollment unemployed, students and people who do not engage in paid activity. It is the person himself who declares the value.
3. Selection of the highest salaries
After organizing all the wages, month by month, of what you contributed with the social security benefits, 80% of the highest contribution wages are taken.
- They determine the basis for calculation and result in the value of the benefit wage to be identified.4. How to do the calculation
After finding out what it is benefit wage, define the contribution period and find the 80%, let’s go to the accounts. To perform the calculation we need:
- contribution time;
- number of months corresponding to 80% of the contribution time. Here the highest wages will be found.
In the end, the highest salaries, 80% of them, are added up and divided by the number of contributions that were taken into account.
Contribution time: 300 months of contribution.
80% of contributions: 240 contributions.
Add the values of 240 contributions and divide by 240, so we will have the value of benefit wage.
4. Calculation with the social security factor
There is a difference in the calculation of benefit wage that occurs in retirement due to contribution time and retirement according to age: the social security factor.
To perform this calculation, the formula below is used and then multiplied based on the arithmetic average of the 80% of the highest salaries, in the contribution period.
Source: About us
- f = social security factor;
- Es = expectation of survival at the time of retirement;
- Tc = contribution time until retirement;
- Id = age at the time of retirement;
a = contribution rate + 20% employer contribution.
|Contribution Salary||Rates (%)|
|up to 1,693.72||8.00|
|from 1,693.73 to 2,822.90||9.00|
|from 2,822.91 to 5,645.80||11.00|
5. Calculation with the minimum divisor
So that there were no distortions in the values of the EHIC beneficiaries (General Social Security Regime) until 11/28/1999, they created the rule of the minimum divisor.
In this case, not only is the sum of the contribution wages made and it adds an amount equivalent to 60% of the number that refers to the months between July 1994 and the benefit start date.
Collection – 90 months between July 1994 and July 2014.
Months: 240 months (total months between July 94 and 2014) x 60% (minimum divisor) = 144 months.
80% of contributions: 72 contributions.
As in the calculation, 72 was below the minimum divisor account that gave 144, and the number of contributions, 72, is also smaller, it is the minimum divisor that applies. This account adds up to 90 contributions and is divided by 144, the minimum divisor.
Settling the Benefit Wage Accounts
Knowing the meaning of what is benefit wage it is the first step to understand the topic and its calculation. This account is the one that anticipates the amount to be paid in retirement or in some aid such as illness and accident.
It is also important to know the differentials on what is a benefit wage in relation to the contribution wage and the initial monthly income, so as not to make a miscalculation.
Despite the name, the benefit wage is not the payment itself, but the basis of calculation only. For all its complexity and the mandatory nature of the law on what the benefit wage is, the process requires attention so that the worker has his right preserved.
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