In the judgment of Case No. 16539.720010/2019-45, the 1st Panel of the 1st Chamber of the 2nd Section of the Administrative Council of Tax Appeals (CARF) decided that the amounts paid by as retention or permanence bonuses do not constitute remuneration and, therefore, should not form the calculation basis for social security contributions.
The case analyzed involved credits and payments made by a financial institution as a retention bonus, aimed at encouraging certain employees to stay on during a critical time marked by episodes that negatively affected the company’s image.
According to the judgment, for the retention bonus not to be considered part of the contribution salary, it must be specified in an ancillary clause to the employment contract, which stipulates a minimum duration for the employment relationship. In addition, it must be applied on an ad hoc basis in specific cases, such as the imminent loss of a strategic employee or, as in this case, the need to preserve employees in the face of extraordinary and unexpected situations.
The matter is controversial and has been decided by CARF on a case-by-case basis. In Ruling No. 9202-010.457, of April 24, 2022, the 2nd Panel of the Superior Council of Tax Appeals (CSRF) also ruled out the levying of contributions on the premise that the bonus does not have a remunerative nature since it does not derive from the provision of services by the individual, but rather from a mere obligation to do – to remain linked to the company for the agreed time. There are, however, recent rulings that recognize the remunerative nature of retention bonuses and, consequently, the levying of contributions, as can be seen in Ruling no. 2102-003.445, of 06.09.2024, of the 2nd Panel of the 1st Chamber of the 2nd Section.