Understanding Contribution Base, Payroll, and Benefits
Classified in Mathematics
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Contribution Base Calculation
The contribution base amount, calculated monthly for each worker, is the foundation for determining both employer and employee contributions to Social Security. It's calculated as follows:
- Base monthly contribution: This is the sum of all earnings charged to the worker in the month.
- Extra payments: Any additional payments are added, divided by 12, and included in the base.
A rate of 6.35% is applied to this total amount to calculate the worker's monthly Social Security contribution. Different percentages are applied to calculate the company's contribution for each worker. Furthermore, all Social Security benefits are calculated based on this contribution base.
Payroll Management
Payroll is the official record of