Practical case
Mr. LMH with a disability of 33% and hired indefinitely by company "XXX" on January 1, 1999, he was dismissed on March 12, 2019. The dismissal was judicially declared unfair. The data provided by the company in the corresponding certificate of withholdings and payments on account of IRPF are the following:
Ordinary remuneration (gross monetary income): 8.100,00
Redundancy payment: 75,000.00
IRPF withholdings: 0.00
Discounts: Social Security Contributions: 610,00
Mr. LMH You are entitled to two years of unemployment benefits from 1 April 2019; However, in order to join a worker-owned cooperative, he decided to use the single payment option to collect this benefit, with the amount received amounting to 16,800 euros.
The remaining income not exempt from personal income tax obtained by the taxpayer in 2019 amounted to 5,500 euros.
Determine the reduced net performance of work, taking into account that, for the calculation of the compensation for dismissal or termination of the worker up to the amount established as mandatory in the Workers' Statute, the daily regulatory salary that must be taken into consideration is 90 euros.
Solution:
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Treatment of compensation received for dismissal .
Since this is an unfair dismissal that took place on March 12, 2019, to determine the exempt compensation, it must be taken into account that transitional provision eleventh.2 of Royal Legislative Decree 2/2015, of October 23, which approves the consolidated text of the Workers' Statute Law (BOE of the 24th).
Said eleventh transitional provision.2 of the consolidated text of the Workers' Statute Law establishes that compensation for unfair dismissal of contracts signed prior to February 12, 2012 will be calculated at a rate of 45 days' salary per year of service for the time of service prior to said date, prorating by months the periods of time less than one year, and at a rate of 33 days' salary per year of service for the time of service afterwards, prorating likewise by months the periods of time less than one year.
The resulting compensation amount may not exceed 720 days' salary, unless the calculation of the compensation for the period prior to 12 February 2012 results in a higher number of days, in which case this will be applied as the maximum compensation amount, without said amount being able to exceed 42 monthly payments, in any case.
Determination of the exempt amount in accordance with transitional provision eleventh.2 of the consolidated text of the Workers' Statute Law :
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Period 01-01-1999 to 11-02-2012 (13 years and 2 months old):
Days worked in the company:
45 days x 13 years = 585 days
(45 days x 2 months) / 12 months = 7.5 days
Total (585 + 7.5) = 592.5 days
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Period 12-02-2012 to 12-03-2019 (7 years and 1 month)
Days worked in the company:
33 days x 7 years = 231 days
(33 days x 1 month) ÷ 12 months = 2.75 days
Total (231+ 2.75): 233.75 days
Exempt compensation amount :
Since the days taken into account for the calculation of the compensation for the two periods is 826.25 days (592.5 days + 233.75 days) and the amount of compensation cannot exceed 720 days of salary, the amount established as mandatory by the Workers' Statute will be 64,800 euros (90 euros x 720 days).
The amount of compensation for unfair dismissal established as mandatory by the Workers' Statute (64,800 euros) does not exceed the limit of 180,000 euros set by article 7.e) of the Personal Income Tax Law, and is therefore fully exempt.
Non-exempt compensation amount :
The excess of the amount received over the exempt amount (75,000 – 64,800) = 10,200 euros is subject to taxation as employment income. However, a reduction percentage of 30% must be applied to this amount, since it is understood to have been generated over a period of more than 2 years. See the previous sections of this Chapter for more information.
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Unemployment benefit in the form of a single payment .
Unemployment benefits in the form of a lump sum, regardless of the amount, are exempt from personal income tax.
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Declaration of the income obtained .
Total returns: (8,100 + 10,200): 18,300.00
Reduction in article 18.2 of the Personal Income Tax Law: (30% s/ 10,200): 3,060.00
Total computable income: 15,240.00
Deductible expenses: (Social Security) article 19.2.a) Personal Income Tax Law: 610,00
Previous net performance (15,240.00 – 610.00) (1) : 14,630.00
Other deductible expenses article 19.2.f) Personal Income Tax Law:
For obtaining work income: 2,000.00
Active workers with disabilities (2) : 3,500.00
Net performance: (14,630 – 2,000 – 3,500): 9.130,00
Reduction for obtaining work income (3) : 3,292.50
Reduced net performance: (9,130.00 -3,292.50) = 5,837.50
Notes to example :
(1) The deductible expenses under the concept of "other expenses" of article 19.2.f) of the Personal Income Tax Law have as a limit the total income from work once reduced by the rest of the deductible expenses. Therefore, the prior net return must be calculated to set the limit that cannot be exceeded by said expenses. (return)
(2) In this case, all gross earnings from work are linked to the worker's status as a disabled worker, so the limit of increased expenditure for active disabled workers will be the previously calculated net earnings (14,630 euros). (return)
(3) Since the previous net income from work is between 13,115 and 16,825 euros and there is no income, excluding exempt income, other than work income exceeding 6,500 euros (specifically, it is 5,500 euros), the amount of the reduction for obtaining work income by applying article 20 of the Personal Income Tax Law as amended on 01/01/2019 would be: 5,565 - [1.5 x (14,630 - 13,115)] = 3,292.5 (return)