Depreciation, Payroll, Non-Remunerative Benefits, and Collective Agreement Additions in Argentina
Depreciation Calculation
To calculate depreciation, the following must be considered:
- The value to depreciate
- The recovery value
- The useful life
- The method to be applied
Depreciable Value
This is essentially the acquisition cost. However, the potential salvage value (the value the asset may have for the company when it’s no longer useful) should also be considered. The depreciable value is calculated as follows:
Cost of acquisition of the asset – Estimated recoverable value at the end of use = Depreciable Value
Salvage Value
The estimated value of the asset for the company after its useful life. It’s the difference between the estimated selling price and all expenditures necessary to remove the asset from service.
Useful Life
The term assigned to an asset as an element of profit for the company. The bases for determining useful life are:
- Time (years)
- Production capacity (total production)
The choice of basis depends on the asset’s characteristics.
Depreciation Methods
After determining the depreciable value and the basis for useful life, a depreciation method must be chosen to distribute that value.
Methods:
- Straight-line
- Sum-of-the-years’ digits (Increasing)
- Declining balance
- Production units
- Hours of work
Straight-Line Depreciation
Also called the “linear” or “constant” method, it recognizes that depreciation is a constant function of time. The calculation is:
Depreciable value / Estimated useful life = Annual Depreciation
Increasing Depreciation Method
This method assumes that wear is lower in the early years and increases progressively over time. The sum-of-the-years’ digits method provides that the depreciation for a period is proportional to the remaining useful life divided by the sum of the numbers from 1 to n, where n is the total estimated useful life.
Payroll
Besides preparing receipts and managing staff attendance and payments, it’s necessary to consider the accrual of salaries and related expenses:
- Salaries
- Social security contributions
- Salaries payable
- Contributions and social charges payable
The first two are debited to expense accounts, and the latter two are credited to reflect a liability to be paid later.
The entry for salary payment is:
- Debit: Salaries payable
- Credit: Cash
Salary payable is debited to cancel the liability, and cash is credited to reduce the asset.
The entry for paying taxes and social security contributions is:
- Debit: Contributions and social charges payable
- Credit: Cash
Debit contributions and social security contributions to pay off the debt and credit cash.
Non-Remunerative Benefits
These are not considered when calculating holiday pay, annual bonus (SAC), allowances, paid leave, etc. They are not subject to contributions to SUSS (Social Security Unified System). Their aim is to improve the quality of life of workers and their families by providing social benefits, compensation for damages, reimbursement of work-related expenses, and grants (family allowances, scholarships, etc.).
Examples:
- Catering services
- Lunch vouchers
- Transport card
- Food vouchers and baskets
- Drugs, medical, and dental expenses
- Provision of workwear
- Childcare or nursery services
- Provision of school materials
- Courses or training seminars
- Funeral expenses
- Per diem allowances
- Scholarships
Family Allowances – Integrated Family Protection
Family allowance benefits are considered non-remunerative income (Art. 7 of Law 24241 and Law 24714). They aim to cover private sector employees (excluding domestic service) for higher expenses due to family responsibilities. The SIPF (Integrated Family Protection System) also aims to cover childhood and old age contingencies, extending coverage to all families. Currently, this system is regulated by Law 24714.
It is a state-paid subsidy not subject to withholding or taxes and is not considered when calculating the annual bonus, redundancy, or sick pay.
Assignments are for:
- Child under 18 years old
- Disabled child of any age
- School assistance
- Birth
- Adoption
- Marriage
- Maternity
Additional Collective Agreement Payments
Collective Bargaining Agreements (CCT) typically include additional payments, some based on base salary, others on fixed or variable amounts. Common concepts include:
Seniority: Supplements paid to workers based on their time of service in the company, often a percentage of base salary.
Food Allowance: Can be a percentage of base salary (e.g., Gastronómicos CCT 125/90 Hotels & Restaurants) or a fixed amount.
Punctuality and Attendance: Remuneration for punctuality and attendance, often with justified absence exceptions (e.g., vacation, marriage, death, family). Examples include the dairy industry (CCT 2/88) and commercial workers (STC 130/75), where Article 40 provides a payment equivalent to one-twelfth of the monthly remuneration.
Cash Shortage Allowance: Provided to workers responsible for cash handling in establishments (AFIP Opinion 2378, 10/12/97). It’s considered a habitual surcharge that integrates remuneration for SIJP purposes.
Productivity: Rewards individual or collective productivity and yields.
Title/Language: Supplements based on worker training, payable if the knowledge is required for the job.
Hierarchy: Based on responsibility and position within the company.
Risk: Established by the CCT for tasks with physical or psychological risks, such as handling toxic substances.