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INSS – Social Security

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 system operating:

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

Any employee working under the CLT system automatically contributes to Social Security and consequently to INSS. Temporary or independent workers can opt to pay a monthly fee and apply to the Social Security program. The same thing applies to housewives, students and unemployed people. In this case, they will be considered optional payers. 

How contributions are collected

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 - The union 

Employer’s obligations

Companies are automatically obliged to collect INSS from the employees' payroll. The amount of money to be discounted depends on the wages and amount paid to the individual. This value will be divided, quite simply, into 12 instalments to be paid from January to December. Put simply, the larger the salary the larger the contribution will be. However, the maximum discounted value in 2012 was 430.78 compared to 570.88 in 2017

Salary contribution table for 2012
Monthly SalaryContribution
0 to 1,174.86

8%

1,174.87 to 1,958.10

9%

1,958.11 to 3,916.20

11%

Salary contribution table for 2017
Monthly SalaryContribution
0 to 1,556,94

8%

1,556,94 to 2,594,92

9%

2,594,92 to 5,189,82

11%

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

Retiring in Brazil

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

  • 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. 
  • 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.
  • Disability -To workers that, due to accident or disease, 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. 

 

Population shift and the INSS

Brazil has a very large young population, which from a demographic perspective is good for contributions. The down side is that life expectancy is increasing in Brazil which ultimately means the INSS will be having more taken out in pensions and social care than put in as tax creating a financial ‘black hole’.

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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