Contributions to the Social Security System of Independent Workers
The Decree 1273 issued on July 23rd by the Ministry of Health and Social Protection regulated the payment and withholding of Contributions to the General System of Integral Social Security (“SGSSI”) and Parafiscal of Independent workers.
- What are the main changes introduced by this new decree?
- Decree 1273 of 2018 if contributions to the SGSSI by independent workers must be made in arrears, for monthly periods, through the Integrated Contribution Settlement Worksheet (“PILA, in Spanish”). Previously, the independent workers had to pay their contributions to social security in health and pension in advance, before passing their bill of collection or invoice.
- In the case of contracts for the provision of personal services related to the functions of the contracting entity, the decree established the obligation of the contracting party to be responsible for withholding and paying the contributions to the SGSSI through the PILA of the independent workers, within the terms established for the contracting party, and not for the contractor.
- The value to be withheld will be calculated in accordance with the percentages provided by law (currently in health 12.5%, in pensions 16%, and in ARL depends on risk) under the Wage Basis (“IBC” in Spanish) corresponding to 40% of the monthly value of each contract, excluding VAT.
- In contracts for the provision of services of unlimited duration and / or indeterminate total value there will be no place for the contract to be paid monthly. In such case, the contributions will be calculated based on the values that are caused during each contribution period.
2. When does it apply?
- The payment in arrears of the contributions to the SGSSI must be made as of October 1st, 2018, corresponding to the contribution period of September 2018.
- The retention and rotation of the contributions to the SGSSI by the contracting party must be made as of June 2019.
By: María Angélica Pulido
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