The discussion about taxes, wages and productivity returned to social media after a publication by liberal deputy Carlos Guimarães Pinto. At issue is a comparison between the cost for a company of paying a net salary of 3000 euros and the cost of paying three net salaries of 1000 euros.
According to , the values presented by the deputy are correct, based on a simulation for a single person, without children, without food allowance and considering 14 months of remuneration.
What the post said
Carlos Guimarães Pinto stated that paying a net salary of 3000 euros costs the employer 6194 euros per month. In the same publication, he added that paying three net salaries of 1000 euros costs 4618 euros per month. The deputy classified this difference as “a perverse incentive for low wages and weak productivity”, in a criticism of the fiscal burden on work in Portugal.
How the calculations were made
According to Polígrafo, the simulation was carried out using the Doctor Finance simulator. In the first case, a net salary close to 3000 euros corresponds to a gross salary of around 5000 euros. Considering the costs borne by the employer, the annual cost is 86,711.63 euros.
Divided by 14 months, this amount corresponds to around 6194 euros per month for the employer. In the second case, a net salary of 1000 euros corresponds to a gross salary of around 1243 euros. According to the same simulation, the annual cost for the employer is R$21,534.98. Divided by 14 months, it comes to around 1538 euros per month. Multiplying by three workers, the total cost is close to 4618 euros per month.
The difference is in the progressive IR
The explanation mainly involves the progressiveness of the IR. In Portugal, income tax increases as salary rises. Therefore, for a worker to receive 3000 euros net, the gross salary needed must be much greater than triple the gross salary needed to pay 1000 euros net.
Speaking to Polígrafo, Luís Leon, tax specialist and founder of the consultancy Ilya, considered the allegation true precisely because it referred to net salaries. According to the tax expert, as the IR rate rises with income, the rate applied to those who receive R$3,000 net is much higher than that applied to each worker who receives R$1,000 net.
TSU also weighs on the final cost
The Single Social Tax paid by the employer also helps explain the difference. The company’s contribution is 23.75% of the worker’s gross salary.
This means that the higher the gross salary necessary to guarantee a certain net amount, the greater the employer’s burden with the TSU will also be. Therefore, one employee receiving R$3,000 net has a proportionally higher cost than three employees receiving R$1,000 net each.
Why net salary changes everything
The comparison would be different if it were made with gross salaries. Here, however, the analysis starts from the value that actually reaches the worker after taxes and contributions.
To guarantee the same net value at higher incomes, the employer has to pay a much higher gross, because taxation increases as income grows. It is this progressiveness that means that a net salary of 3000 euros does not simply correspond to triple the cost of a net salary of 1000 euros.
Values are correct, according to Polygraph
Polígrafo concludes that the numbers presented by Carlos Guimarães Pinto are correct, within the assumptions used in the simulation. In other words, under the conditions indicated, it is more expensive for a company to pay a net salary of 3000 euros than to pay three net salaries of 1000 euros. The estimated difference is around 1576 euros per month, comparing the 6194 euros in the first case with the 4618 euros in the second.
Debate goes beyond accounts
Although the values are correct, the political and economic discussion goes beyond simulation. The comparison raises questions about taxation, salary incentives, productivity and companies’ ability to pay higher wages.
For critics of the current model, the progressiveness of the IRS and the burden on work may make more ambitious salary increases difficult. For others, progressive taxation is an essential instrument of redistribution and fiscal justice.
The practical answer
Yes, paying a net salary of 3000 euros can cost the employer more than paying three net salaries of 1000 euros. According to the accounts verified by Polígrafo, and using the indicated assumptions, the first case represents a monthly cost of around 6194 euros for the company.
Three net salaries of 1000 euros cost, in total, around 4618 euros per month. The difference arises mainly from the progressiveness of the IRPF and the fact that the employer’s TSU is levied on the gross salary.
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