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Practical Income Manual 2022.

Chart: Reductions in tax base applicable for contributions and contributions to social security systems

Social security instrumentContributorSituationsQualification for the purposes of applying limits (Art.52)Tax treatment for the workerLimits
PP Employment System/PPSE/ MPS (*) The company The company decides Business contribution

Remuneration in kind without deposit on account + Reduction in the Tax Base

Note: For the company it is a deductible expense in IS / Income Tax ( EDN / EDS )

1,500 + 8,500
Flexible remuneration (the worker decides): Limit of 30% of the full annual remuneration Worker contribution Remuneration in kind without deposit on account + Reduction in the Tax Base

1,500 + 4,250

 (*) maximum amount of 4,250 which is within the additional limit of 8,500 as its application requires that the company has made business contributions of at least the same amount as the contribution made by the worker

Mediation in payment (by order and on behalf of the worker) Worker contribution (Monetary remuneration + withholding) + Reduction in the Tax Base
The worker Direct payment - Voluntary contribution Worker contribution Reduction in the tax base
Individual PP/PPA (**) The company The worker chooses the social security product where to contribute (the company acts as a simple mediator) Worker contribution (Monetary remuneration + withholding) + Reduction in the Tax Base 1,500
The worker The worker chooses the social security product where he contributes. Worker contribution Reduction in the tax base

(*)  The abbreviations correspond to the following social security systems

  • PP S. of Employment: Employment System Pension Plans.
  • PPSE: Business Social Security Plans.
  • MPS: Social Security Mutual Funds.

(**) The abbreviations correspond to the following social security systems:

  • Individual PP: Pension Plans of the associated system and Pension Plans of the individual system.
  • PPP: Insured Provident Plan.