Juliana Mello

Juliana Mello

The Brazil Business


INSS as a Tax

Juliana Mello

Juliana Mello

The Brazil Business


Learn more about the Social Security in Brazil and the institution responsible for collecting the Instituto Nacional do Seguro Social contributions.

Instituto Nacional do Seguro Social or INSS for short is the National Institute for Social Security. This is an independent body linked to the Social Security Ministry.

INSS is responsible for collecting contributions to maintain the Brazilian Social Security regime operating:

  • Paying retirements
  • Pensions due to death
  • Illness
  • Disability aids
  • Others benefits foreseen by law

Any employee working under the CLT regime is automatically contributing to Social Security and consequently to INSS. Temporary or independent workers can chose to pay a monthly fee and apply to the Social Security program. Same thing to housewives, students and unemployed people. In this case, they will be considered optional payers.

Forms to contribute

The collection of the money destined to INSS varies according to the person's employment link:

For employers

  • Type/ nature: Production
  • Calculation Basis: Payroll
  • Subject Liable: Corporate entity; or individual (domestic employer)
  • Rates: 15%, 17.5%, 20% and 22.5%; or 12% (domestic employer)
  • Taxing capital Authority: the union

For employees

  • Type/ nature: Income
  • Calculation Basis: Wages
  • Subject Liable: Individual
  • Rates: from 8% to 11%
  • Taxing capital Authority: the union

For self-employed

  • Type/ nature: Income
  • Calculation Basis: Earnings
  • Subject Liable: Individual
  • Rates: 20%
  • Taxing capital Authority: union

Employers obligations

Companies are obliged to collect INSS from the employees' payroll. The amount of money to be discounted depends on the wages. This value will be divided in 12 installments to be paid from January to December. The larger the salary, the larger will be the contribution. Yet, the maximum value to be discounted is BRL 430,78.

Salary contribution table for 2012

Monthly Salary Contribution
BRL 0 to BRL 1.174,86
BRL 1.174,87 to BRL 1.958,10
BRL 1.958,11 to BRL 3.916,20

Besides worker's contribution, there is also an employer contribution of 20%, calculated over the payroll.

Types of retirement

Brazilian Social Security differs between three kinds of retirements paid by the INSS:

  • Due to age: for urban male worker over 65 years old, and urban female workers over 60. For rural workers, from 60 years old to men and 55 to women.

  • Due to contribution time: It can be full or proportional. Male workers have to prove 35 years of contributions, and female workers 30. Men must be at least 53 years old and women 48.

  • Due to disability: to workers that, due to diseases or accidents, were considered incapable to perform their activities.

There are other social benefits provided by INSS, in case of accident, need for reclusion, disease and pensions.

An indebted institution

Brazil is still a country of young people. But as Brazilians life expectancy raises, INSS gets more and more in debt.

In 2011, the institution collected BRL 254 billion while spent BRL 290,5 billion, effectively creating a deficit of BRL 36,5 billion, covered by the National Treasure.

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