The Federal Revenue Service recognized, through the Cosit Consultation Solution No. 151, that no social security contribution is levied on bonuses given to employees, as provided by the Labor Reform Law No. 13,467, in force since November 11, 2017.
However, for a sum to be qualified as a performance-related bonus, some requirements must be met, namely: the sum must be paid individually to a given employee or collectively to a group of employees; it must be paid in the form of goods, services, or a cash amount; it must constitute a liberality granted by the employer; and it must be paid for performance that exceeds that normally expected in the performance of the employee’s activities.
Thus, it is noted that social security contribution should not be required on bonuses paid to the employee when the rewarded employee performs beyond what is expected, as well as when companies observe the aforementioned conditions.