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Executive Order 438/2023 – Bonus Not Subject to Social Security Contributions for Private-Sector Employees and Domestic Workers
4 September, 2023 | Current Regulations
After various announcements, in the Official Gazette of today, August 31, 2023, Executive Order 438/2023 (the EO) was published, establishing the guidelines to pay a bonus not subject to social security contributions (the Bonus) to public- and private-sector employees and to domestic workers.
This article is intended to merely inform about the scope of the EO for private-sector employees and domestic workers.
Below is a summary of the EO main aspects. We are available to provide any additional clarification and information.
a. Eligibility. Any worker hired under any modality that works under an employment relationship and whose net salary as of August 2023 -including amounts subject and not subject to social security contributions- is lower than ARS 400,000 (four hundred thousand Argentine pesos) (the Net Remuneration).
b. Bonus Amount. The maximum amount of the Bonus will be ARS 60,000 (sixty thousand Argentine pesos), payable in two equal installments of up to ARS 30,000 (thirty thousand Argentine pesos) each.
c. Nature of the Bonus. The Bonus is not subject to social security contributions, so it cannot be used to calculate them or to calculate premiums payable to union-managed health maintenance organizations. It must be used, though, to calculate the premiums payable to workers’ compensation insurance companies.
d. Proportional Bonus. In the case of part-time workers or employees whose workdays are shorter than provided under the law or a collective bargaining agreement, the Net Remuneration and the Bonus will be proportional to such workdays.
e. Ranges of the Bonus. The Bonus amount will vary depending on the following factors:
- If the Net Remuneration is equal to or lower than ARS 370,000, the Bonus will be ARS 30,000 per installment.
- If the Net Remuneration is higher than ARS 370,000, the Bonus will be the difference between such Net Remuneration and ARS 400,000 per installment (that is, from ARS 29,999.99 to ARS 0.01).
f. Payment Timeframes. The Bonus must be paid with the August and September 2023 remunerations. For August, an additional 15-business-day period is granted for the payment, so the due date will be September 21.
g. Setoff. The EO establishes the possibility of offsetting the Bonus against any salary raises agreed upon in the collective bargaining mechanism. This means that, in relation to any employees not covered by a collective bargaining agreement or that received discretionary raises from their employers, the Bonus cannot be offset against any salary raises.
h. Tax Benefit. Micro and small- and medium-sized companies that have a MiPyMe certificate may offset this Bonus against their contributions to social security as employers, as per the following guidelines.
Micro-companies may offset 100% up to the maximum social security contributions (exclusive of any payments to union-managed health maintenance organizations) paid in each month.
Small-sized companies may offset 50% up to the maximum social security contributions (exclusive of any payments to union-managed health maintenance organizations) paid in each month.
i. Domestic Workers. The Bonus will be ARS 25,000 (twenty-five thousand Argentine pesos), payable in 2 installments of up to ARS 12,500 (twelve thousand, five hundred Argentine pesos) each. The maximum amount will be payable to any domestic worker collecting a Net Remuneration as of August 2023 equal to or lower than ARS 387,500. In the case of any Net Remuneration higher than ARS 387,500 as of August 2023, the Bonus amount will be the difference between ARS 400,000 and the Net Remuneration. Domestic workers’ employers that (i) were not subject to the Personal Assets Tax in 2022, (ii) have received net income lower than ARS 1,500,000, and (iii) have paid the Bonus may request a refund equivalent to 50% of the Bonus paid.
j. Other Limitations. Despite contradictory information provided, the EO does not preclude Bonus recipients from accessing the foreign exchange market, although the possibility that such restriction might be imposed under another regulation should not be ruled out.
For any clarification or further questions regarding this matter, please contact Javier Fernández Verstegen (email@example.com).