Companies with employees are subject to the collection of employer social security contributions, which are levied on the payroll, as per article 22, subparagraph I, of Law 8.212/1991 (a rate of 20%).

Starting in 2012, certain sectors were included in the system known as “payroll tax relief,” established by Law 12.546/2011, which required them to calculate social security contributions based on gross revenue (“CPRB” – rates from 1% to 4.5%, depending on the sector). This measure was adopted to reduce the burden on companies from hiring new employees.

Later, with the enactment of Law 13.161/2015, the CPRB became optional, and such option had to be formalized in January of each year, applying to the corresponding calendar year.

At the end of 2023, the Federal Executive Power issued Provisional Measure 1.202, aiming to increase tax collection. Among other measures, this legal document stipulated the so-called reinstatement of payroll taxes of the payroll, i.e., the termination of the employer contribution system based on gross revenue.

Since its publication, MP 1.208 has faced criticism and caused dissatisfaction within the National Congress, particularly concerning the reinstatement of payroll taxes. On 27, December the National Congress debated extending the payroll tax relief, approved a bill, overturned the presidential veto, and enacted Law 14.784, which extends the tax relief. The next day, the Presidency of the Republic issued the aforementioned MP 1.202, aiming to supersede the legislative actions of Congress.

It was in this scenario and after intense discussions that the Presidency of the Republic adopted the new MP 1.208, which repeals the provisions of the previous MP 1.202 regarding the reinstatement of payroll taxes. As a result, the legal framework resulting from Law 14.784/2023, extending the payroll tax relief, is reinstated.