On February 3, 2026, the Brazilian Federal Revenue Service issued COSIT Consultation Ruling No. 10/2026, revising its understanding regarding the non-incidence of social security contributions on non-remunerative bonuses.
1. Concept of Bonus
This matter is grounded in Article 457, §§ 2 and 4 of the Brazilian Labor Code (Consolidação das Leis do Trabalho – “CLT”), which establishes the non-remunerative nature of incentive payments.
In order to qualify as an incentive payment, the following requirements must be met:
(i) it must be granted at the employer’s discretion;
(ii) it must be granted in the form of goods, services, or cash;
(iii) it must be paid to an employee or a group of employees; and
(iv) it must result from performance exceeding ordinary expectations.
Accordingly, as such amounts do not constitute remuneration, they are legally excluded from the basis for the calculation of social security contributions.
2. Changes
Previously, the Federal Revenue Service took the position that the existence of internal regulations, policy documents, or formal communications would undermine the discretionary nature of incentive payments, thereby triggering taxation.
However, the tax authorities now recognize that the definition of parameters, as well as objective rules and criteria, does not, in itself, negate the discretionary nature of such payments.
3. Residual Risk
The Federal Revenue Service cautions that incentive payments must not constitute “disguised salary.” Therefore, if payment is guaranteed or results from arrangements that remove the employer’s autonomy, the tax authorities may recharacterize such amounts as remuneration and assess taxes retroactively, along with applicable penalties.
We remain at your disposal to address any questions, highlight key points of attention, and assist in structuring and documenting policies to ensure full compliance with the new guidelines.
