Brazilian Senate commission approves municipal social security rates

The Economic Affairs Commission (CAE) of the Brazilian Senate has approved differentiated employer social security contribution rates for municipalities based on their GDP per capita. The proposal, part of Complementary Law Project (PLP) 51/2021, establishes five distinct contribution tiers ranging from 8% to 18%.

Under the approved text, the 20% of municipalities with the lowest GDP per capita will face an 8% rate. The remaining tiers will be set at 10.5%, 13%, and 15.5%, while the 20% of municipalities with the highest GDP per capita will be charged 18%. The Brazilian Institute of Geography and Statistics (IBGE) will provide the necessary data for municipal classification, and the Executive Branch will publish the respective brackets annually.

The measure is intended to align social security contributions with the economic reality of each municipality while maintaining fiscal responsibility. If passed, these rules are set to take effect on January 1, 2027, following the conclusion of the current municipal social security tax relief regime. The text now moves to the Constitution and Justice Commission (CCJ) for further analysis.