What is INSS?
INSS (Instituto Nacional do Seguro Social) is the agency that runs Brazil's public social security — and, in everyday payroll, the name of the social security deduction on salaries. This contribution funds retirement pensions, sickness benefits, maternity pay and survivors' pensions, and is mandatory for every CLT employee.
The deduction uses progressive rates by salary bracket: 7.5%, 9%, 12% and 14%. It works like income tax — each rate applies only to the slice of the salary within its own bracket, not to the total. That's why the effective rate is always lower than the rate of the bracket the salary falls into.
There is a contribution cap (R$ 988.09 at current values): those who earn above the contribution salary ceiling never have more than that withheld. On top of the employee's share, the company pays the employer contribution — as a rule 20% of payroll, besides other charges.
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Gross salary of R$ 3,000: the first bracket pays 7.5%, the second 9% and the remainder falls into the 12% bracket. Adding up the slices, the deduction comes to around R$ 254 — an effective rate of about 8.5%, not the 'full' 12% of the bracket.
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