Update on the employer´s payroll contributions for social security in Argentina
By Law Number 27,430, published on the Official Gazette on 29 December 2017, the federal government introduced significant reforms to the tax system, among them modifications to the employer´s payroll contributions for social security in Argentina.
Employers have mandatory contributions to support the Unique System of Social Security, and the healthcare system. After the amendments introduced by Law Number 27,430, the employer´s payroll contributions for social security in Argentina in relation to the Unique System of Social Security are the following:
- The general rate is 17.5%. However, if the employer’s principal activity consists in the provision of services or commercial activities and its sales exceed certain amounts (currently AR$ 48,000,000), a 20.7% rate will apply. These rates will be varying until reaching a common 19.5% in the year 2022, all according to the following schedule:
|Employer´s contribution||Until 12/31/2018||Until 12/31/2019||Until 12/31/2020||Until 12/31/2021||As from 1/1/2022|
|All activities, except services and commercial activities with sales exceeding AR$ 48,000,000)||17.5%||18%||18.5%||19%||19.5%|
|Services and commercial activities with sales exceeding AR$ 48,000,000)||20.7%||20.4%||20.1%||19.8%||19.5%|
- The minimum non-taxable amount will be ranging from AR$ 2,400 (as of the year 2018) to AR$ 12,000 (as of year 2,022), to be updated following the consumer price index.
- According to the provincial jurisdiction the employer does business in, a percentage of the employer’s social security payment may be currently offset against the Valued Added Tax. However, such creditable amount will decrease over time until completely eliminated in the year 2022.
- Special promotion regimes may apply lowering certain contributions. Fuel tax may be set off against employer´s contribution in certain activities.
- Law Number 27,426 amended the Article Number 252 of the Contract of Employment Law Number 20,744, preventing the employer to request the employee´s retirement until he/she has reached 70 years of age. However, this very same law brought a relief in employer´s contributions for those 65-year-old workers who do not retire and continue working: as long as the worker meets the requirements to get the universal basic benefit of the pension system, the employer will not have to pay contributions to the Unique System of Social Security any longer. From that moment on, the employer will just pay contributions for the health care system (6%) and the work risks insurance.
The employer´s contribution to support the healthcare system keeps the same rate: 6%.
Mario E. Castro Sammartino
 For a brief on Labor Costs in Argentina, please review the following article on our Legal Blog: http://cspabogados.com.ar/en/labor-costs-in-argentina/.
 Comprised of the Argentine Integrated Pension System (Law Number 24,241) the National Institute of Social Services for Retirees and Pensioners (Law Number 19,032), the National Regime of Family Allowances (Law Number 24,714), and the National Employment Fund (Law Number 24,013)
 For more information on this amendment, please, read on our Legal Blog: http://cspabogados.com.ar/en/request-for-retirement-in-argentina/.
Our publications exclusively express the author´s opinion and do not purport to be legal counsel on any case. Should you need it, you must consult with your trusted lawyer or may contact us at your convenience. If you liked the article, please, share it.
Recent articles in our Legal Blog
The Argentine Executive Power, by means of the Urgency and Necessity Decree No. 609/2009, established new foreign exchange regulations in Argentina controlling certain aspects of the inflows, outflows, purchase of foreign currency and other transactions as of 1 September 2019. These regulations have been complemented and extended by additional regulations issued by the Central Bank of the Argentine Republic (Banco Central de la República Argentina, or BCRA after its Spanish acronym).
In this third part of the series of articles that we will publish on the subject of the promotion of the knowledge economy carried out by the new Law No. 27.506, we will deal with the significant tax benefits of the knowledge economy in Argentina.
In this second installment of the series of articles that we will publish on the subject of the promotion of the knowledge economy carried out by the new Law No. 27.506, we will focus on the beneficiaries of the promotion of the knowledge economy.
Promotion of the Knowledge-Based economy in Argentina: a new regime and incentives for this thriving field of the industry. Part one
By Law No. 27,506, published in the Official Gazette on June 10, 2019, the national government established the Promotion of the Knowledge-Based Economy Regime with the goal of promoting economic activities that apply the use of knowledge and the digitalization of information, supported by breakthroughs in science and technology, to obtaining goods, providing services and/or improving processes
To incorporate a brand new subsidiary in Argentina or take interest in an already existing company, foreign companies must first register themselves with the Public Registry, filing certain documents