Earnings: how will the new law affect single workers, married workers with two children and the self-employed?

The adjustment of the scales for those who pay Earnings will be carried out quarterly if the omnibus law is approved.

He bill Personal Income Tax of the government that will replace Profitsfinally entered the Congress. The norm stipulates a return to values ​​in force as of last September, prior to the last reform, which will lead to some 800,000 taxpayers being covered by the tax again. How much will single workers, workers with children and the self-employed pay for this new rule? How often will the floors be adjusted and at what rate?

The initiative promoted by Executive power contemplates a non-taxable minimum of $2,360,829 on the salaries of employees in a dependency relationship.

He CEO of SDC Tax Advisors, Sebastian Dominguez, explained to Infobae that a single employee who receives a salary of $1,250,001 gross per month will not be affected by the personal income tax. On the other hand, the specialist clarified that for a married worker with two children who earns up to $1,590,062 gross per month, he will not pay the tax either.

“The reform has a positive point, which is returning to the essence of the Income Tax because it ended with the setting of a floor and those at the top quickly reached the highest rate of 35 percent. In addition, the deduction of non-taxable income, special benefits and family responsibilities are returned to the same for all taxpayers regardless of salary,” said the tax expert.

“The project contemplates an update of the deductions for non-taxable income, special deduction, spouse and children. This is positive because in 2024 the deductions were updated compared to 2023 due to the variation in the RIPTE, however the value reached takes into account last year’s inflation, that is, the current values ​​are doubled and updated ones are reached in real terms. Although these values ​​are better than before, they continue to be low and should be higher so that taxes are paid from higher salary levels,” Domínguez added.

The CEO of SDC Asesores Tributarios provided a detail about how much single employees in a dependency relationship will pay:

  • Single workers with a gross salary of more than $1,250,000 will not pay the new Personal Income Tax.
  • If that same employee receives a salary of 1,600,000 gross pesos, the tax would be approximately 45,500 pesos.
  • If you have a gross salary of 2,000,000 pesos, you would pay around 150,000 pesos.

Meanwhile, Domínguez gave some examples of how much married employees with two children will pay for the new Personal Income Tax if the Government’s bill advances in Congress:

  • A married employee, who can deduct a spouse and two children, with a salary of up to 1,590,000 gross pesos will not pay Profits.
  • If you receive a gross salary of 2,000,000 pesos you will pay 58,000 pesos per month.
  • If you have a salary of 2,400,000, you will have to pay income taxes of around 282,000 pesos.

It is worth clarifying that the deductions and tax scale brackets will be updated automatically due to the variation in the Consumer Price Index (CPI) that supplies the Indecalthough the Executive power He will also have the power to do so at his discretion.

On the other hand, Domínguez highlighted some negative aspects of the reform proposed by the ruling party. “Discrimination continues regarding self-employed. It is not assimilated so that the same special deduction is applied for employees and self-employed workers,” he warned.

“Another negative point is the Retroactivity to January 1, 2024, since the tax for human persons is for the calendar year and any reform that is made during the course of the calendar year has effect for the entire fiscal period. Given that this project is going to go through its legislative process, probably in the best of cases it will be approved in February or early March, and what will happen is that there will be employees who receive salaries for January and eventually also for February. without taxing Profits and then they will find that perhaps in March they will have to withhold the tax from the previous months,” the tax expert warned.

“There will probably be a rule to do it in installments, those withholdings, but equally the employees may have already spent the money in these circumstances of inflation and having to pay on what they already collected and spent is not reasonable. Yes, it is legal, but it is not reasonable,” Domínguez concluded.

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