Payroll Structure: Wages, Supplements, and Contribution Bases

Understanding the Pay Stub (Payroll Receipt)

Essential Payroll Details

The pay stub contains details regarding the company, the worker, and the payment period. It must also include the signatures of the employee and the company representative. At the end of the form, the levels of contribution to Social Security (SS) and the tax retention base must be specified.

Perceptions: Wage and Non-Wage Components

Perceptions are the total amounts received by the worker, categorized into wage and non-wage components.

Wage Perceptions

These include:

• Base Salary
• Wage Supplements (e.g., seniority, overtime)
• Wages in Kind

Non-Wage Perceptions

These are amounts received in addition to the wage, often covering expenses or compensation:

• Reimbursement of expenses to the worker.
• Compensation or benefits from Social Security (SS).
• Compensation for removal, suspension, or dismissal.
• Other non-wage payments (e.g., transport costs).

Defining Wage Components

Base Salary

The Base Salary is fixed compensation paid per unit of time or work. This represents the minimum monetary amount covering the professional category, usually established by collective agreement.

Wage Supplements (Complements)

Wage supplements are fixed remuneration determined by circumstances related to the personal conditions of the employee, the work performed, or the status and results of the company.

Types of Wage Supplements

• Personal: Age, language proficiency, etc.
• Workplace Conditions: Hardship (*penosidad*), toxicity, hazard, shift work, night work, etc.
• Productivity Premiums (Quantity or Quality): Incentives, attendance, punctuality, and similar bonuses.
• Company Results: Participation in company profits, etc.

Note: Supplements related to the workplace, situation, or company results are generally not consolidated unless an agreement states otherwise.

Overtime Regulations and Extra Payments

Overtime Work

Overtime hours are generally voluntary, unless an individual or collective agreement establishes the obligation to perform them. Overtime can be financially rewarded or compensated with agreed-upon rest time.

• Payment for overtime cannot be less than the value of ordinary time.
• If rest compensation is chosen, and no specific timing is agreed upon, the rest must be taken within the four months following the completion of the overtime.
• Employees are limited to 80 extra hours per year (excluding hours compensated by mandatory rest).

Extra Payments (Bonuses)

All employees are entitled to at least two extra payments (bonuses) per year, the amount of which is agreed upon by collective agreement:

• One usually paid at Christmas.
• The other usually paid in summer.

These payments can be apportioned (prorated), meaning the total bonus amount is divided and paid across the 12 monthly payments of the year.

Detailed Non-Wage Perceptions

These payments are generally intended to cover expenses incurred by the worker:

• Transport or distance allowance (from home to work).
• Per diem (*Diets*) covering maintenance and/or accommodation expenses.
• Locomotion costs incurred during the job (e.g., paying tolls to move to another company location).
• Benefits and compensation from Social Security (SS).
• Compensation for transfers, suspension, or dismissal.

Note on SS Exemption: Non-wage payments are exempt from Social Security contributions if they are properly justified (e.g., by invoice) and do not exceed the maximum limits established by law.

Calculating Contribution Bases and Deductions

Social Security (SS) Contribution Bases

The contribution bases determine the percentage applied for SS deductions.

1. Common Contingency Base (BCC)

This base is calculated using wage perceptions:

• Base Salary
• Wage Supplements
• Wages in Kind
• Proportion of Extra Payments

2. Professional Contribution Base

This base is calculated as:

• Common Contingency Base (BCC) + Overtime Pay

Income Tax Withholding (IRPF)

Income tax withholding is calculated based on:

• All wage perceptions multiplied by the applicable retention percentage.