Social Security Contributions: Understanding TC1 and TC2 Forms

Posted on Dec 9, 2024 in Law & Jurisprudence

B. Stock Exchange Bulletin: Model TC1

This model is completed taking into account the contribution base for all employees whose total amounts have been reflected in the model TC2. Each of the parties that divide the model includes the following particularities:

Identifying Information: In addition to data identifying the company, the form has boxes for the liquidation period “from” and “until”, which serve to record the first and last month referred to in the settlement. When the settlement relates to the same month, only the box “until” is used.
General Contingencies: This section reflects, among other things, the basis of the following contingencies:
- Common Contingencies: An amount of the contribution base for all workers; the amount of this sum is the one in the TC2 model.
- Overtime: Appears divided into structural and non-structural, and force majeure, as contribution rates are different. The foundations of the model are obtained from TC2. The applicable contribution rates are the sum of the percentages of the company and workers.
Occupational Accidents and Diseases: The basis of these contributions is the sum of the bases for the TC2 model 7. The column percentages are applicable according to the headings of risk that workers are grouped together under, and depend on the job they perform. The quotation that these contingencies are subject to premiums that will be different for different activities, industries, and tasks. Contributions resulting are paid in full by the employer, and are divided into:
- Contributions for Temporary Disability (IT), designed to cover temporary disability.
- Contributions for Invalidity, Death, and Survival (IMS), designed to cover eventualities arising from invalidity, death, and survival.
Other Contributions: These include the following: Unemployment, Wage Guarantee Fund, and Vocational Training. The basis for calculating quotas for these contingencies is the same as for Occupational Accidents and Diseases. The rates applicable are those resulting from the sum of the percentages that correspond to the company and workers.

C. Stock Exchange Bulletin: Model “TC2 Abbreviated” Included in the Model TC1

To complete this model, transcribe the data identifying the company and workers, sticking to the wording of each box. The data that are outside are not taken into account, and symbols (periods, commas, bars, etc.) are not used. The following data are recorded:

Worker’s Social Security affiliation number (NAF).
Worker’s tax identification number (TIN).
Number of days that the employee has remained registered.
Trading group at work, as per their working status.
The key worker’s contract rate.
Number of hours worked daily.
Heading for Occupational Accidents and Diseases.
Number of days the worker is unfit.
Number of days in maternity.
Occupational Accidents and Diseases heading for the Temporary Disability/maternity.
Basis of contribution by Occupational Accidents and Diseases/maternity.
Date of grant of subsidy/reduction.
The corresponding key to the special situation of the worker is entered.
The boxes of the professional category and weary days are not completed in the general scheme.
Surname and name of the worker.

Important!

A) Considerations on the Completion of TC2

Workers must be recorded by increasing the number of the worker’s membership. The code of the province is part of the membership number and, therefore, must be taken into account when ordering workers at TC2.
When TC2 exists in the same groups of workers affected by different collective agreements, they will interact under each agreement and, within it, by creating a membership number for each page break code change collective agreement, so that workers affected by different collective agreements never interact on the same page of TC2.
When filling the box next to the name, write in capital letters the first two letters of the surname, the first two letters of the second last name, and the first letter of the name.

B) Considerations Relating to the Completion of TC1

General Contingencies: The percentages applied arise from the sum of the percentage of the company and workers.
Related Accidents and Occupational Diseases: For these contingencies, only the company is listed. The percentages are the entries of the risk of the statement (Temporary Disability and Invalidity, Death, and Survival) and are applied to the partial sums of each section.
Other Contributions: The rates applicable for rates of Unemployment, Wage Guarantee Fund, and Training arise from the sum of the percentages for the company and workers.

Item 7: Liquidation and Payment of Contributions to Social Security

1. Payment of Social Security Contributions

All employers and workers doing their paid employment are obliged to contribute to the general regime of Social Security. The employer deducts from their workers’ pay, at the time of actual salaries, the contribution that corresponds to each of them, and enters their own and their workers’ contributions into the Territorial Treasury of Social Security, or any authorized financial institution to act as a tax office, within one month following its accrual. If the employer breaches the deadline for entry fees and, where appropriate, submission of documents without having requested the appropriate postponement, it is a violation that is punishable with different surcharges. Likewise, employers are required to withhold income tax on account of a certain percentage, they meet employment income, or services provided for Social Security, for example, temporary disability. Therefore, employers must deduct and clear with the relevant bodies for the following concepts:

Quote the general scheme of Social Security.
Withholding tax of Personal Income Tax (IRPF).

To settle and enter the quotas, it is necessary to fill a number of forms whose functions are discussed in this topic.

2. Document Exchange to Social Security

The charging and collecting of dues owed by employers and workers to the general regime of Social Security are conducted by paper trading, which consists of TC2 models, TCI, and TC2 abbreviated included in the model TC1, which are listed below in logical order for their enjoyment. Settlement on subscription income is monthly.

TC2 Model: This is the nominal employees of an enterprise and its contribution bases and submitted with the TC1 model, unless the appropriate clearance to entrepreneurs and shares was made before the payment of dues of workers, including, in turn, the ratio of workers entitled to bonus and/or reduction. This model should not be completed when, instead, the TC2 abbreviated included in the TC1 model is filled in.

Model TC1: This is where the trading newsletter reflects the corresponding shares for the company and workers. These fees are calculated together and determine the amount of the document to be entered. Each model consists of four specimens when the company has hired the coverage of occupational accidents and diseases with an employer. If these contingencies were coordinated with the National Institute of Social Security (INSS), three copies must be submitted. The resulting subscription income is subject to the authorized banks in the corresponding month following the settlement, on behalf of the Treasury for Security. Social institutions, such as proof to the employer, deliver a sealed copy. If deadlines are not met, surcharges that can range from 5 to 20% of duplicate fees will apply. The quotation documents must be properly filed and retained, classified, together with copies of receipts for wages for a minimum of four years.

Model “TC2 Abbreviated” Included in the TC1 Model: The employer must submit this form when the following conditions are met:

Reflects an account code contribution to the general system with a single worker during the high liquidation.
The liquidation period is one month.
The only related work has not remained unchanged over the period of liquidation in the contribution group, the type of contract, or the entry of Occupational Accidents and Diseases.
The only worker related to an employment contract entitled to a benefit in Social Security contributions is not at risk during pregnancy or during maternity leave.

A. Workers Call List: Model TC2

The nominal ratio of workers TC2 is divided into three parts:

Identifying Information: Data appears on the company and the code of the collective agreement that workers are under, identification of the employer, the account code Social Security contribution, the number of workers, the period of liquidation, the liquidation rate (code 000 corresponds to the normal clearance), the file number, if any, and the number of pages and order from them.
Central Body: Data reflects workers registered in the company during the first liquidation. The central body boxes correspond to the identification of workers, i.e., last name, individual ID number, and number of Social Security membership. Other boxes correspond to the data contribution of each employee in the month referred to the last four columns. Grouped boxes of deductions or offsets, number of days, key, amount, and date, which serve to reflect the amounts of compensation benefits paid under delegated payment, rebates, and deductions for contributions deductions practicable following certain employment contracts and any other applicable benefit of quotas means quotation.
Bonuses: Bonuses are produced in the employer’s share, not on the share of workers, and may include both common and professional contingencies such as unemployment, wage guarantee fund, and Vocational Training. Fee reductions can occur both on the employer and worker, but only for lower common contingencies.
Lower Part: The bottom of the document contains the boxes for the sum of the amounts of the bases, which will serve to develop a model TC1 and deductions and offsets, and space for stamps, date stamps of the tax office, and business.