Friday, January 13, 2017

Income tax and surcharge: how to calculate the deductions monthly – Jornal de Negócios – Portugal

the IRS surcharge and the IRS are separate things. The IRS is part of our history-contributory pension since 1989, the second was introduced as a resource during the program of assistance. The IRS is permanent, the surcharge is to end up in the long term (supposedly at the end of this year). Both taxes are collected through a monthly withholding, in the case of income from dependent employment and pensions, but, precisely because they are different taxes, the formulas of calculation of the monthly withholding also are quite distinct. We leave you with a systematization not to get lost in the rules.

1. The monthly withholding from the IRS

The tables, withholding, IRS, with which everyone is familiar, has almost no news.

As there has not been stirred in the rules of the IRS to 2017, the Government limited itself to update the levels at 0.8%, that is, the same inflation rate used to update the main table from the IRS itself (the table that will be used for the final calculation of the tax).

This update is a measure that aims to ensure that there is no loss of income to those workers or pensioners who suffer an update to the salary or pension up to 0.8% and that, by being at the edge of the step that dictates the retention rate could jump to a new tier.

Therefore, this update is advantageous to the minority of taxpayers with incomes close to the limits of the classes that have had updates in pay.

For the vast majority, it is irrelevant for the purposes of retention – the result is, that the vast majority of taxpayers who maintain the same family situation, and remuneration, in 2016, very likely to continue to deduct the same as up here.

How to calculate?

The retention at source depends on the type of income (dependent employment or pensions), the framework for the family of the taxpayer (whether or not dependent children) and the framework for remuneration (whether it is a or most to gain).

The starting point is to choose the corresponding table. For example, a family of two married couples, in which the two work and do not have children, in which the taxpayer has 2,000 euros gross per month, you must go to “Table III – dependent work, married two holders, and find the level of income respective. The retention rate on a monthly basis is 23.5%, which if multiplies directly about 2,000 euros.

The tables, withholding, IRS complete with all profiles, can be found here.

2. The surcharge on extraordinary of the IRS

it Is the surcharge that there will be more news. As in 2017, the surcharge disappears entirely, already in January, for the first two age classes, the retention rates have to be adapted to this reality.

in This case, there are two tables of retention in the source: a for singles and for married couples in which the two elements of the household have income; and for married couples in which only one of the spouses has income.

The tables do not differentiate in function of the type of income: whether they are pensioners, whether they are workers dependent, the retention rates are equal. What counts is the family situation of the couple. Also do not differentiate in function of the number of children: such as the case here, the setting relating to the children (that are worth a discount of 2.5% of the value of the minimum wage) is made in the final settlement.

The fees, depending on the level of income, apply on the difference between the gross income, discounts for Social Security, withholding personal income tax and the national minimum wage (557 euro).

How to calculate?

Imagine that you are married, your spouse also works, and earns 1500 euros gross per month. Up here it was required to withhold 1%, while henceforth you will no longer discount, which will lead to an increase of net income.

Another example, now with calculations to the mix. Imagine that you have 2,000 euros gross, is married, the other spouse also has income and has no children. The retention rate that corresponds to it is 1.75% and it is estimated the about the difference between the gross income, discounts for Social Security, withholding personal income tax and the national minimum wage (557 euro).

Formalizing, corresponds to 1.75% x (2,000 euros gross – 220 euros of Social Security – 470 euros IRS – 557 euros in the minimum wage), that is, you retain to 1.75% about 753 euros, that is, 13,2 euros a month.

Note: The membership dues of the worker to the Social Security of 11%

the value of The monthly withholding of tax is obtained by means of the tables of retention of 2017, which vary depending on the composition of the household and its level and type of income. In this case the rate is 23.5%.


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