Have you ever wondered what the difference is between a salary and a pro-labore payment? And more importantly, what impact does it have on your company’s expenses? Don’t worry, we’ll explain it to you in a very simple and straightforward way.
Salary: The Payment for CLT Employees
The salary is the payment made to employees hired under the rules of the CLT (Brazilian Labor Laws), also known as the signed work card. Salary earners are entitled to several labor rights guaranteed by law. Among these, the following stand out:
- Paid vacations
- 13th salary
- FGTS (Severance Indemnity Fund)
- Other labor protections
From the company’s perspective, hiring a CLT employee involves additional costs beyond the gross salary. To illustrate, let’s consider an employee with a monthly gross salary of R$3,000.00:
- Annual Salary: R$36,000.00
- Vacations (approximately): R$4,000.00
- 13th Salary: R$3,000.00
- FGTS (8% on remuneration): R$3,440.00
- Employer’s INSS (e.g., 26.8%): R$11,524.00
- Total Annual Cost for the Company: R$57,964.00
It is important to note that the employer’s INSS rate may vary depending on the company’s tax regime. The example above considers a company under the presumed or actual profit tax regime, with a rate of 26.8%. Companies under the Simples Nacional tax regime may have different rules regarding the employer’s INSS contribution, depending on the annex in which they are classified.
Pro-labore: The Remuneration of Partners or Administrators
On the other hand, pro-labore is the remuneration paid to the partners or administrators of a company for the work they perform in managing the business. Unlike CLT employees, those receiving pro-labore do not have the same labor rights, such as FGTS, paid vacations, and a 13th salary.
In terms of costs for the company, pro-labore is generally more economical. The main tax incidence on pro-labore is the social security contribution (INSS), with a rate of 20% on the amount paid by the company.
Considering an administrator who receives a monthly pro-labore of R$3,000.00:
- Annual Pro-labore: R$36,000.00
- INSS (20%): R$7,200.00
- Total Annual Cost for the Company: R$43,200.00
Summary of Differences and Costs
In summary:
- Salaries offer more rights and benefits to the worker but represent a higher cost for the company due to social and labor charges.
- Pro-labore is more financially advantageous for the company, as it has a lower tax burden and does not involve the same labor rights. However, it does not offer the same benefits to the recipient.
It is important to highlight that in addition to the costs and benefits mentioned, there are other relevant differences, such as notice periods and paid leave, which do not apply to pro-labore.
We hope this article has clarified the differences between salary and pro-labore and their respective financial impacts on your company. If you still have questions or would like to know more details, please contact us! See you next time!