How Earnings Will Impact This Year on Salaries, Self-Employed Income, and Retirement
In 2022, or at least during the first months of the year, workers under a dependency relationship who have a gross monthly salary greater than $ 225,937 (Discounting contributions to the social security system, the figure is $ 187,527.7).
How was that amount arrived at? Since 2018 an automatic updating mechanism has been in place for the variables that define who and how much they pay; The index used to make the readjustment is the evolution of the average taxable remuneration of stable workers (Ripte) between the previous months of October. The variation between 2020 and 2021 was 50.62%. And that percentage was applied on $ 150,000. Why? Because $ 150,000 was the gross salary from which Earnings were paid during part of 2021, the year in which a new way of defining what is the lowest income subject to tax was established; Although this base was increased to $ 175,000 last September, the Government considered that this additional update should not be taken into account to define the tax bases for 2022.
Past, trodden … but not yet liquidated, at least as far as earnings are concerned. Still referring to the income tax for 2021, There is time until March 31st (if there is no extension) to complete the form, the information of which will be used to calculate the tax. On the payroll Siradig-Trabajador, which is accessed after entering with a tax code in the AFIP page, The deductions are declared, which imply amounts that are deducted from the income subject to the tax – for having dependents or for having made certain expenses – and that, therefore, allow to alleviate the tax burden. If it was not fully completed during 2021, there is still time during this first quarter. It’s not just deductions – they’re charged too moonlighting data (in the case of people who have two or more jobs under a dependency relationship) and 35% refund requests eventually withheld in 2021 for the purchase of foreign currency.
The update according to the Ripte was applied to the figures that are deducted from the taxable income for having dependents: the amount per child under 18 years of age, from $ 78,833.08 in 2021, it is now $ 118,741.97; the figure by son incapacitated for work it went up from $ 157,666.16 to $ 237,483.94. And what is deduced by spouse went to $ 235,457.25. All amounts are annual and are deducted from income before tax is calculated. In the case of the spouse, it must be a person who does not have their own income and, if they do, they must be very low (up to $ 167,678.4 per year in 2021 and up to $ 252,564.84 in 2022). Regarding the deductions for expenses, the main ones are the following:
• Rental housing: 40% of the amount paid can be deducted, with an annual cap of $ 167,678.4 (by 2021) and $ 252,564.84 (by 2022).
• Domestic service: salaries and contributions are considered and the maximum to be deducted is $ 167,678.4 (for 2021) and $ 252,564.84 (for 2022).
• Fees for medical services: 40% of the invoiced amount is taken into account, up to a limit equivalent to 5% of the net income.
• Prepaid Medicine Fees: Everything paid is reported, but the deductible has a cap to be applied when calculating the tax.
• Interest on mortgage loans: $ 20,000 a year is deducted, a figure that has been frozen for decades.
• Funeral expenses (from the taxpayer himself or from a declared dependent family member): only $ 996.23 is discounted.
• Donations to the Treasury or to entities authorized for this purpose by the AFIP: there is a cap equal to 5% of the person’s net income.
• Life insurance and retirement plans: by 2021 there was a deductible cap of $ 24,000; by 2022 the figure was not yet reported by the AFIP.
According to the rules that govern since 2021, there is a level of monthly remuneration up to which it is not taxed, which is now $ 225,937. That threshold it could be increased at some time of the year by the Executive Power, since a law granted him powers for that purpose. Those who have a salary between that figure and $ 260,580 enter a system of “increased deductions”, also created last year, so that in those cases the tax is such that situations are not caused in which with a certain gross salary, one ends up receiving less in hand than with a lower gross salary.
To determine whether or not someone pays Earnings, in addition to the remuneration of the month in question, the monthly average of the elapsed period of the year. If that average is lower than the threshold, it is not taxed. For example, if next April someone has a salary of $ 240,000, and the average salary since the beginning of the year is $ 224,000, they will not have a tax discount. As for the bonus, it is not subject to Earnings only for those who, due to the salary level, are left out of the tribute.
The general annual deduction (the figure that defines the minimum income to be taxed), which in 2021 was $ 503,035.19, is in 2022 $757.694,50. Thus, if no deduction for family members or expenses is applied, it is taxed from an average monthly income of $ 63,141. In the case of “new professionals” or “new entrepreneurs” as defined by regulations in recent years, the general annual deduction goes from $ 586,874.4 (2021) to $ 883,976.96 (2022).
For retirements and pensions (of the Anses or of any other body), a special legal provision determines that the so-called non-taxable minimum is equal to eight times the minimum amount of the national system (that is equivalent to $ 232,493 per month for the period from December 2021 to February of this year), but only if certain conditions are met: no income should be received from other sources, in addition to the pension system (or, if there are any, they must be very low, not exceeding $ 167,678.4 in 2021 and not greater than $ 252,564.84 in all of 2022) and should not be reached, depending on the patrimony, by the Personal Assets tax. If these requirements are not met, retirements are subject to Earnings under the same conditions as the salaries of the employees.
A wage earner with a gross monthly compensation of $ 280,000, This year the following amounts will be taxed, according to each assumption:
• Without any deduction, neither for relatives nor for expenses: $ 347,393 annually (monthly average: $ 28,949).
• With two dependent children: $ 273,729.6 (monthly average: $ 22,811).
• With spouse and two children: $ 204,059.5 (monthly average: $ 17,005).
• With a dependent child: $ 310,539.6 (monthly average: $ 25,878).
• With spouse and two dependent children and, in addition, deduction for payment of wages and contributions in the domestic service regime (maximum amount): $ 135,867 (monthly average: $ 11,322).
• With a child and deduction for rental housing (maximum amount): $ 232,244.5 (monthly average: $ 19,354).
The amounts include the payment of Earnings on the bonus, which is discounted on a pro-rata basis throughout the year. If there are bonuses, they are also considered for the calculation of the tax to be paid.
The request for reimbursement of 35% earnings for the purchase of foreign currency, In the case of employees or retirees who pay Earnings, it is done by completing the form Siradig-Trabajador, on the AFIP page. You have to go to the tab corresponding to “payments on account”. The compensation for the amounts withheld during 2021 will be made after March 31, when the final settlement of Earnings for that year is completed. What refers to 2022 will only be compensated during 2023, These delays logically cause a strong loss of real value of the taxpayer’s resources, given the context of high inflation rates.