Salary deductions: see what is and isn't allowed.

Salary deductions: read the text to the end and learn everything you can and cannot do. We've put together a guide to help you with this!

The importance of understanding salary.

After a period – usually 30 days – of providing some service, the payment of a salary is the worker's main right.

A good understanding of how your salary works is essential for a worker's life. Through this understanding, salaried employees can have more control over their credits and debits throughout the month.

This type of understanding also has a direct effect on the worker's financial life. By understanding all the deductions and benefits that are part of their payment routine, the worker can manage their finances with more clarity and precision.

A good understanding of one's own salary is essential for professionals to understand their role – and their importance – in the company's daily operations.

Furthermore, it's necessary to understand all aspects of your salary to understand how the deductions from your monthly pay work. And it's about these deductions that we're going to talk about now.

Salary deductions

If you work under the CLT regime – one of the most common systems for starting an employment relationship here in Brazil – you're already more than familiar with the various deductions that come with having a good old "signed work card".

Although these deductions may seem like villains that compromise the integrity of your salary, the situation is not quite like that.

It is through these deductions that Brazilian workers are able to access a range of labor rights.

Salary deductions: what is allowed and what is not?

Now that you know a little more about the importance of understanding your own salary and the presence of deductions on your payslip, it's time to learn more about the main deductions that can exist in a salary and which ones can and cannot be deducted.

What can

If you already have some work experience and have worked with a formal employment contract, you most likely already know – or at least have heard of – the deductions we will discuss in this topic. These are:

FGTS

The Guarantee Fund for Length of Service (FGTS) is one of the deductions that represent one of the worker's rights.

Designed to provide assistance to employees dismissed without just cause, the FGTS (Severance Indemnity Fund) consists of a deduction of 8% from the worker's salary.

This amount is deposited monthly by the employer into the employee's FGTS (Brazilian Severance Indemnity Fund) account. The employee can access this amount in certain situations, such as dismissal without just cause or through an agreement between employer and employee, for example.

INSS

Another well-known discount for those who work under the CLT (Brazilian labor law) is the INSS. The acronym, which stands for National Institute of Social Security, is the discount related to the worker's social security contribution.

It is the public social security system of Brazil.

The purpose of this discount is to guarantee income for the taxpayer in cases such as illness, accidents, and even old age – such as retirement – or death. In this case, assistance may also be offered to family members.

This discount varies according to the category and salary range of the worker, and can be between 7.5% and 14%.

What cannot happen

Regarding this issue, there are several types of discounts that may seem plausible to unsuspecting workers, but in reality, they can – and should – be considered as soon as the worker notices their presence.

Transportation voucher

Although it's a benefit present in almost all employment contracts, the deduction for transportation vouchers is optional and can be revoked by the employee. If the worker chooses not to receive this benefit, the deduction from their salary – which is around 6% – will no longer be made.

Damage caused by employees

Except in cases where there is proof of intent to damage company property or in clauses present in the contract signed by the employee upon joining the company, any damages that an employee may cause to the company cannot be deducted from their salary.

Late payment discounts

One of the main topics when discussing salary deductions is the deduction for lateness in companies.

It turns out that a discount can indeed occur, but certain aspects must be respected. For example, a worker who is up to 10 minutes late per day cannot have deductions from their salary.

Now, when these delays exceed this limit, being more than 10 minutes, measures ranging from warnings to deductions from payroll can be adopted. The same applies in cases of unjustified absences.

Conclusion

As you can see, it's necessary to always keep an eye on all the discounts involved in your payment.

Checking your monthly payslip is an excellent way to verify that the deductions on your payslip are consistent with your employment contract.

Upon noticing any changes that are beyond their understanding, the ideal course of action is for the employee to seek clarification regarding the deduction, thus gaining a better understanding of how their salary works.

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Content Team The Administrator

I am a member of the O Administrador team and I produce content about career, personal finance, financial education, productivity, and professional development. My goal is to share clear and practical information to help readers with their day-to-day decisions.

January 14, 2022

Career