Practical case
Mr. LMH with a disability of 33% and hired indefinitely by company "XXX" on January 1, 2000, he was dismissed on March 12, 2023. 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
Withholdings IRPF : 0.00
Discounts: Social Security Contributions: 610,00
Mr. LMH You are entitled to two years of unemployment benefits from 1 April 2023; 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 IRPF obtained by the taxpayer in 2023 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:
1. Treatment of compensation received for dismissal.
Since this is an unfair dismissal that took place on March 12, 2023, to determine the exempt compensation, it must be taken into account that the eleventh transitional provision.2 of Royal Legislative Decree 2/2015, of October 23, which approves the consolidated text of the Workers' Statute Law ( BOE of October 24).
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 February 12, 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 11-01-2000 to 11-02-2012 (12 years and 1 month old):
Days worked in the company:
45 days x 12 years = 540 days
(45 days x 1 month) / 12 months = 3.75 days
Total (540 + 3.75) = 543.75 days
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Period 12-02-2012 to 12-03-2023 (11 years and 1 month)
Days worked in the company:
33 days x 11 years = 363 days
(33 days x 1 month) ÷ 12 months = 2.75 days
Total (363 + 2.75): 365.75 days
Exempt compensation amount:
Since the days taken into account for the calculation of the compensation for the two periods is 909.5 days (543.75 days + 365.75 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 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 in this Chapter in Phase 1: Determination of total work performance, the section intended to examine the reduction by " Performance with a generation period greater than two years ".
2. Unemployment benefit in the form of a single payment.
Unemployment benefits in the form of a single payment, regardless of the amount, are exempt from IRPF .
3. 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 (18,300 -3,060) = 15,240.00
Deductible expenses: (Social Security) article 19.2.a) Law of Personal Income Tax : 610,00
Previous net performance (15,240.00 – 610.00) (1) = 14,630.00
Other deductible expenses article 19.2.f) Law of IRPF :
- 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) 6,498 - [1.14 x (14,630 - 14,047.5)] = 5,833.95
Reduced net performance: (9,130.00 - 5,833.95) = 3,296.05
Notes to the example:
(1) The deductible expenses under the concept of "other different expenses" of article 19.2.f) of the Tax Law are limited to 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. (Back)
(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).(Back)
(3) Since the previous net income from work is between 14,047.5 and 19,747.5 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 , with the new wording established for 2023, will be: 498 - [1.14 x 14,630 – 14,047.5) = 5,833.95. (Back)