The impact of the 2025 State Budget on salary processing
Posted: Tue Dec 24, 2024 10:59 am
All professionals who are responsible for salary processing, managing employment contracts and/or managing people and employee benefits know that the State Budget Law is the touchstone regarding new developments that influence these areas and with which they must be familiar at the beginning of each year.
Already approved in the final global vote, we now await the publication of the State Budget (OE) for 2025, which should come into force on January 1, 2025.
Measures in the 2025 State Budget with an impact on salary processing
Among the approved measures, we highlight those that directly affect honduras whatsapp database processing, thus bringing implications for workers and their respective employers, also impacting the daily lives of professionals involved in salary processing, whether in companies or in Accounting Offices that provide this service to employers.
Let's take a look at some of these measures.
Update of general IRS tax brackets
One of the measures in the 2025 State Budget is to update the limits of all taxable income brackets by 4.62%, while maintaining the IRS rates currently in force. This implies the approval of new withholding tax tables for 2025. In other words, between the end of 2024 and the beginning of 2025, we will have new IRS withholding tax tables to be applied to salary processing as of January.
Update of minimum existence value
The reference value of the minimum existence is changed to the highest between €12,180.00 and 1.5 x 14 x Social Support Index (IAS).
Supplementary Work
The IRS withholding tax rate to be applied to income from dependent employment, earned as overtime, will now correspond to 50% of the rate applicable to the monthly remuneration of dependent employment for the month in which it is paid or made available, regardless of the number of hours to which that overtime work refers .
This is a significant change given that currently this 50% reduction in the retention rate only applies to overtime pay from the 101st hour onwards. It will now apply to all overtime work.
Supplementary work for non-resident taxpayers exclusively
Article 71, paragraph 5 of the IRS Code provides that no withholding tax is due on income from employment and all business and professional income, even if arising from isolated acts, of taxpayers covered by the exclusive non-resident regime up to the amount of the guaranteed minimum monthly wage (RMMG) . The rate of 25% applies to the portion exceeding this amount .
It is also currently provided that, if such income is earned as overtime , the aforementioned limit is applicable independently in relation to income earned in the first 50 hours of work or services provided under that title.
With the approval of the 2025 State Budget, the limit on the RMMG value will now apply independently in relation to income earned in the first 100 hours and no longer just to the first 50 hours of overtime.
Withholding tax in other categories
Gross income arising from professional activities specifically provided for in the table in Annex I to Order No. 1011/2001 of 21 August, when owed by entities that have or should have organised accounting, will now be subject to a withholding tax rate of 23% (currently 25%).
Meal allowance
Currently, only the meal allowance is considered income from dependent work if it exceeds the established legal limit or if it exceeds it by 60% when it is granted through meal vouchers.
The 2025 State Budget determines that only the part that exceeds the established legal limit by 70% (currently €6) will be considered income from dependent work, instead of the previous 60%.
In other words, the daily limit of the meal allowance that will not be taxed for IRS purposes, when paid in meal vouchers, will increase from the current €9.60 to €10.20 .
Increase in Guaranteed Minimum Monthly Wage
For 2025, a 50 euro increase is expected in the RMMG, which will become 870 euros .
This amount will not only lead to salary increases in the case of workers who currently earn 820 euros, but has other implications such as increasing the limit of the unattachable value within the scope of seizures that employers have to make on any of their employees.
"Young IRS" Regime
As for this regime, an extension was approved in terms of possible beneficiaries, the duration of the benefit and the exemption to be applied.
In 2025, the IRS Jovem will be applicable to income from dependent and independent work earned by taxpayers (non-dependents) who are up to 35 years old and the condition that required completion of a cycle of studies will no longer be necessary.
The duration of this benefit has been extended to ten years. It begins in the first year of income generation in which the young person opts to apply for this scheme and the AT verifies that they meet the conditions for this and continues for the following nine years in which they obtain income and continue to exercise the option for this scheme.
On the other hand, the applicable exemption is increased:
100% in the first year;
75% in the second, third and fourth years;
50% in the fifth, sixth and seventh years;
25% in the eighth, ninth and tenth years.
This exemption is limited to the amount corresponding to 55 times the value of the IAS.
Furthermore, a transitional regime is established which establishes that taxpayers fall within this exemption in the year following the number of years of obtaining category A and B income already elapsed, not considering, for this purpose, the years in which they were considered dependents.
This exemption does not apply in years in which income from categories A and B is not earned, and its application can be resumed for the remaining number of years when this type of income is obtained again, until a total of ten years of benefit from this exemption is reached and as long as the person does not exceed 35 years of age.
Taxpayers who are excluded from this regime are:
Benefit or have benefited from the regime applicable to non-habitual residents;
Benefit or have benefited from the tax incentive for scientific research and innovation, provided for in article 58.º-A of the EBF;
Have opted for taxation under the tax regime applicable to former residents;
Do not have their tax situation regularized.
The taxpayer may request that the entity owing the income reflect the application of this regime in the withholding taxes due, and for this purpose must inform the entity of the year in which the income was obtained.
Already approved in the final global vote, we now await the publication of the State Budget (OE) for 2025, which should come into force on January 1, 2025.
Measures in the 2025 State Budget with an impact on salary processing
Among the approved measures, we highlight those that directly affect honduras whatsapp database processing, thus bringing implications for workers and their respective employers, also impacting the daily lives of professionals involved in salary processing, whether in companies or in Accounting Offices that provide this service to employers.
Let's take a look at some of these measures.
Update of general IRS tax brackets
One of the measures in the 2025 State Budget is to update the limits of all taxable income brackets by 4.62%, while maintaining the IRS rates currently in force. This implies the approval of new withholding tax tables for 2025. In other words, between the end of 2024 and the beginning of 2025, we will have new IRS withholding tax tables to be applied to salary processing as of January.
Update of minimum existence value
The reference value of the minimum existence is changed to the highest between €12,180.00 and 1.5 x 14 x Social Support Index (IAS).
Supplementary Work
The IRS withholding tax rate to be applied to income from dependent employment, earned as overtime, will now correspond to 50% of the rate applicable to the monthly remuneration of dependent employment for the month in which it is paid or made available, regardless of the number of hours to which that overtime work refers .
This is a significant change given that currently this 50% reduction in the retention rate only applies to overtime pay from the 101st hour onwards. It will now apply to all overtime work.
Supplementary work for non-resident taxpayers exclusively
Article 71, paragraph 5 of the IRS Code provides that no withholding tax is due on income from employment and all business and professional income, even if arising from isolated acts, of taxpayers covered by the exclusive non-resident regime up to the amount of the guaranteed minimum monthly wage (RMMG) . The rate of 25% applies to the portion exceeding this amount .
It is also currently provided that, if such income is earned as overtime , the aforementioned limit is applicable independently in relation to income earned in the first 50 hours of work or services provided under that title.
With the approval of the 2025 State Budget, the limit on the RMMG value will now apply independently in relation to income earned in the first 100 hours and no longer just to the first 50 hours of overtime.
Withholding tax in other categories
Gross income arising from professional activities specifically provided for in the table in Annex I to Order No. 1011/2001 of 21 August, when owed by entities that have or should have organised accounting, will now be subject to a withholding tax rate of 23% (currently 25%).
Meal allowance
Currently, only the meal allowance is considered income from dependent work if it exceeds the established legal limit or if it exceeds it by 60% when it is granted through meal vouchers.
The 2025 State Budget determines that only the part that exceeds the established legal limit by 70% (currently €6) will be considered income from dependent work, instead of the previous 60%.
In other words, the daily limit of the meal allowance that will not be taxed for IRS purposes, when paid in meal vouchers, will increase from the current €9.60 to €10.20 .
Increase in Guaranteed Minimum Monthly Wage
For 2025, a 50 euro increase is expected in the RMMG, which will become 870 euros .
This amount will not only lead to salary increases in the case of workers who currently earn 820 euros, but has other implications such as increasing the limit of the unattachable value within the scope of seizures that employers have to make on any of their employees.
"Young IRS" Regime
As for this regime, an extension was approved in terms of possible beneficiaries, the duration of the benefit and the exemption to be applied.
In 2025, the IRS Jovem will be applicable to income from dependent and independent work earned by taxpayers (non-dependents) who are up to 35 years old and the condition that required completion of a cycle of studies will no longer be necessary.
The duration of this benefit has been extended to ten years. It begins in the first year of income generation in which the young person opts to apply for this scheme and the AT verifies that they meet the conditions for this and continues for the following nine years in which they obtain income and continue to exercise the option for this scheme.
On the other hand, the applicable exemption is increased:
100% in the first year;
75% in the second, third and fourth years;
50% in the fifth, sixth and seventh years;
25% in the eighth, ninth and tenth years.
This exemption is limited to the amount corresponding to 55 times the value of the IAS.
Furthermore, a transitional regime is established which establishes that taxpayers fall within this exemption in the year following the number of years of obtaining category A and B income already elapsed, not considering, for this purpose, the years in which they were considered dependents.
This exemption does not apply in years in which income from categories A and B is not earned, and its application can be resumed for the remaining number of years when this type of income is obtained again, until a total of ten years of benefit from this exemption is reached and as long as the person does not exceed 35 years of age.
Taxpayers who are excluded from this regime are:
Benefit or have benefited from the regime applicable to non-habitual residents;
Benefit or have benefited from the tax incentive for scientific research and innovation, provided for in article 58.º-A of the EBF;
Have opted for taxation under the tax regime applicable to former residents;
Do not have their tax situation regularized.
The taxpayer may request that the entity owing the income reflect the application of this regime in the withholding taxes due, and for this purpose must inform the entity of the year in which the income was obtained.