Measures on Social Security Contributions in Response to COVID-19


This paper focuses on preferential measures on social security contributions (SSCs) adopted by BRITACOM jurisdictions that consist of 36 Council Member Tax Administrations and 28 Observers. The aim is to provide suggestions on sustaining people’s livelihoods and reducing the negative impact of the COVID-19 pandemic. The information in this paper is mainly selected from websites of OECD, IBFD and the tax administrations of the BRITACOM jurisdictions.
Since the outbreak of COVID-19 pandemic, the world economy has experienced a deep recession. The spike of unemployment rate is among the most evident impact of the pandemic on people’s life and work. BRITACOM jurisdictions have rolled out a series of SSCs policies to help people, businesses and the economy to weather the crisis. 
1. Tax and SSCs Policies
1.1 Angola 
April 16. Decreto Presidencial 96/20 defers the payment of SSCs due by employers (8%), regarding the 2nd quarter of 2020, to be paid in 6 instalments (July to December), interest free. In terms of family support, the private sector is allowed to transfer the 3% employee SSCs in April, May and June.
April 22. The private sector is allowed to transfer to the employee the contribution to the social security, in the months of April, May and June. 
April 22. Payment of SSCs due by employers (8%), regarding the 2nd quarter of 2020, to be paid in 6 instalments (July to December) is postponed, interest free. 
1.2 Cameroon 
May 1. From May to July, allowances have been paid to the staff of companies that cannot afford to pay SSCs or have put their staff on technical leave due to a drop in their business activities, especially in restaurants, hotels, transport sectors.
1.3 Greece 
April 30. A 25% discount on SSCs pertaining to February and March is provided to freelancers, self-employed and individual business owners, in case they are paid in due time, unless said beneficiaries opted for a suspension.
June 26. Income support is provided for workers in companies/businesses whose operation has been suspended because of COVID-19 and businesses/companies that have been heavily affected by COVID-19 crisis and have suspended labor contracts. Workers in these two cases have received 800 EUR for the period between March 15 and April 30 and may receive up to 534 EUR in May. Self-employed whose operation was suspended because of COVID-19 can also receive the same amount. 
June 26. Special provisions are made for the tourism sector: special compensation of 534 EUR (from June 1 to September 30) for seasonal workers in the tourism sector whose contract has been suspended.
June 26. Unemployment benefit payments will be extended by 2 months for those whose entitlement ends in the first quarter of 2020.
1.4 Hungary
March 18. Sectors that were severely hit by the pandemic (e.g. tourism, restaurants, entertainment venues, sports, cultural services, transportation, agriculture) will be exempted from paying SSCs, payroll taxes and small business tax (a simplified tax for SMEs charged on payroll and cash-flow profits). Employees’ contributions are reduced to level equivalent to the basic health insurance contribution payable.
March 24. Employers engaged in sectors that are severely affected by the COVID-19 pandemic are exempted from the payment of taxes and contributions on salaries. For the same period, employees are only obliged to pay in-nature health care service contribution of 4% that cannot exceed the amount of 7,710 HUF in the aforementioned sectors. It means that only personal income tax of 15% and in-nature health care service contribution in the amount of 7,710 HUF can be deducted from the employee’s salary. Notwithstanding the reduced contribution payments, the entitlement to pension, sickness benefit or mother care benefits shall not be affected.
April 7. Employer’s SSC tax rate will decrease from 17.5% to 15.5%.
April 22. Employers provide Social Contribution exemption and increased financial envelope for preferential fringe benefits. The exemption is temporary, until the end of 2020.
May 16. Employers’ SSC and payroll taxes will not be charged on businesses in the aviation industry.
1.5 Morocco 
March 23. Monthly benefit is granted to workers of the informal sector who no longer have revenues as a result of the mandatory confinement, starting with households that are entitled to the Medical Assistance Plan (RAMED). These benefits vary from 800 MAD (72 EUR) to 1200 MAD (108 EUR) depending on the household composition. For households that are not entitled to RAMED, they may benefit from this measure by filling an application on a dedicated electronic platform.
1.6 Spain
March 17. If employers guarantee the employment of their workers, they can enjoy exemption from the payment of employers’ SSCs: 75% reduction in employer SSCs across the board or 100% reduction for companies with less than 50 employees.
1.7 Uruguay
May 8. Notional or real wages derived by the owners of sole-proprietorships and partners of personal companies and small cooperatives will benefit from a 40% exemption of the employer’s and employees’ SSCs. 
2. Administrative Measures
2.1 Cambodia
August 3. Contribution to social security funds is postponed during the suspension or halt in operations for hotels, guesthouses, restaurants and Travel Agencies operating in Phnom Penh, Siem Reap, Sihanouk, Kep, Kampot, Bavet and Poipet.
2.2 Cameroon
August 3. The payment of the SSCs for the second quarter over three installments is spread and late fees are canceled.
2.3 Cote d’Ivoire
April 23. The payment of taxes, levies and similar payments due to the State as well as social contributions due by companies experiencing cash flow difficulties are deferred for a period of three months.
2.4 Ecuador
April 15. The deadline for Social Security payments due in March, is extended to April 25 without interest.
May 15. The deadline for Social Security payments due in April, is extended to May 25 without interests.
June 15. The deadline for Social Security payments due on May, is extended to June 25 without interests.
June 22. Employers that cannot resume their activities and have not paid the SSC on March, April, May and June 2020, can pay them without generating interest, fines neither other charges. Facilities in payments will be provided.
2.5 Germany
March 27. The social protection package which was passed on March 27 provides an interim increase of the time limits for short-term employment not being subject to SSCs to five month or 115 working days (regularly three months or 70 working days) for the time period March 1 to October 31.
2.6 Greece
March 11. Self-employed persons and sole proprietorships affected by the COVID-19 crisis can enjoy suspension of SSCs payments due by the end of March until October 31 for businesses. Suspended payments will be done in 4 installments of equal amount without interest and surcharges.
March 25. Suspension of deadlines for payment of SSCs pertaining to February and March is provided to businesses that have been financially affected or their operation has been suspended under a state decision.
March 31. Extension of the deadline for the payment of SSCs, which are due up to March 31 until April 10 is provided to freelancers, self-employed and farmers.
May 11. Businesses that have been financially affected can have suspension until October 31 of deadlines for payment of SSCs pertaining to April.
May 31. All employees whose contract of employment is temporarily suspended will receive compensation of 800 EUR for the period until April 30. For May the compensation’s amount is 534 EUR for 30 days. The State will fully cover the insurance, pension and health rights of said workers and their SSCs on the basis of their total nominal wages.
June 27. Suspension of the deadline for the payment of SSCs pertaining to May is provided to freelancers and self-employed individuals that have been financially affected as per their Activity Code Numbers. The payment of SSCs will be made in 4 monthly installments starting in October.
2.7 Italy
The deferral of SSCs payments was diversified on the basis of level of turnover: for businesses and professionals with a turnover not exceeding 50 million EUR in the previous fiscal year, with a decrease in March turnover of at least 33% compared to that of March 2019 and for businesses and professionals with a turnover exceeding 50 million EUR in the previous fiscal year, with a decrease in March 2020 turnover of at least 50% compared to that of March 2019, social contributions payments whose deadline falls between March 8 and May 31 are suspended.
2.8 Kazakhstan
All taxes and SSCs for SMEs and micro-enterprises until June 1 are deferred.
Allowances paid to employees who are working for healthcare organizations are exempt from individual income tax, social tax, SSCs and mandatory social medical contributions.
2.9 Kuwait
April 1. Public Institution for Social Security (PIFSS) has announced the implementation of the decision of His Excellency the Minister of Finance and Chairman of the Corporation’s Board of Directors to postpone some of the SSCs payments for a period of six months starting from April 1. 
April 1. PIFSS has announced for the business owners in the oil and gas and private sector that qualify for relief, if they would like to forgo postponing the SSCs, they have to request on the PIFSS website ‘postponement cancellation now’. Otherwise the postpone will be automatically applied.
August 3. SSCs for 6 months for private sector companies are postponed.
2.10 Morocco
April 9. The Economic Monitoring Committee has suspended payment of employer SSCs until June 30 for companies and independent professions facing difficulties.
April 9. Employees in temporary work stoppage registered under the National Social Security Fund can benefit from a 1,000 MAD allowance in March and a 2,000 MAD monthly allowance for April, May and June, in addition to family allowances and health coverage. This allowance, financed by the Special Fund for the management of the COVID-19 pandemic, cancels and replaces the Compensation for Job Loss throughout the crisis period. Workers in the informal sector who cannot practice their activity due to the lockdown will also receive compensation.
2.11 Saudi Arabia 
April 8. The General Organization for Social Insurance (GOSI) announced significant measures with respect to support for Saudi workers in private sector enterprises affected by the COVID-19 outbreak. Private sector employers will have the right to apply to GOSI for a monthly compensation payment for up to 60% of the wages (as registered in the Social Insurance system) of up to 70% of their Saudi National workforce (or 100% of the workforce for employers with 5 or less Saudi national workers) for an initial 3 months period comprising May to July 2020. If claimed, the employer cannot compel the worker to continue working during the compensation period. In order to benefit from such a claim, the employer must: (i) have been subscribed with the unemployment insurance branch before January 1 and continue to participate in this branch; (ii) resume payments after the three month period of the workers covered;  (iii) continue to pay the wages of the remaining uncovered Saudi nationals and non-Saudis; (iv) have met all their wage payment obligations for employees during the first quarter of 2020. The relief will not be available to those industries not deemed to be significantly affected by the outbreak, namely: (i) the financial sector (including those licensed by the Monetary Agency, banks, finance and insurance companies, insurance brokers, and licensees from the Capital Market Authority); (ii) telecommunications operators; (iii) food and supply supermarkets. GOSI has clarified that it will review and evaluate the performance of this initiative, and submit a recommendation before the end of June 2020 with respect to any extension to the period of cover, or changes to those employers who will be able to make a claim. Employers should continue to make deductions from employees for their share of the payments, as this will need to be paid over once the grace period has come to an end. GOSI also announced that all establishments will be exempted from any fines for late payment/filing of February and March 2020 contributions (due to be paid in March and April 2020 respectively). Penalties for late filing/payment are likely to be calculated from May onwards, unless further relaxation is provided.
2.12 Serbia
August 3. SSCs levied on salaries and wages in March, April and May 2020 (if the taxpayer wishes to do so) are postponed until January 4, 2021.
2.13 Slovak Republic 
March 29. Employer SSCs will be postponed if sales declined by more than 40%. This policy is also applicable to the self-employed.
April 21. Temporary abolition of social insurance and health insurance contributions for self-employed entrepreneurs over three months (March, April and May) is adopted. These contributions will be split over the following 18 months.
August 3. Employers’ health insurance and SSCs for affected companies and self-employed are postponed.
2.14 Spain
March 23. The implementation procedure will last up to 5 days. Where employment contracts have been suspended or reduction of working hours have taken place due to the force majeure, the Social Security will exempt companies who have less than 50 employees from the payment of the company’s contributions. For companies with 50 or more employees, the Social Security will exempt 75% of the company’s contributions to the Social Security during this period. Such exemptions are conditional upon the company maintaining employment levels in the 6 months following the re-activation of normal activity. Employees will be entitled to unemployment benefit, even if they lack the required minimum period of unemployment.
March 31. Social Security debts between April and June (0.5% interest) are postponed.
March 31. SSC moratorium is allowed for 6 months with no interest: for companies (April to June) and for the self-employed (May to July) provided the activity is not suspended.
April 1. Companies and self-employed workers included in any Social Security regime or those authorized to act through the Electronic Data Referral System in the area of Social Security, provided that they do not have another deferral in force, may request a deferral in the payment of their Social Security debts for which the statutory period of payment takes place between April and June. These requests for deferment must be made before the first ten calendar days of the regulatory period for payment indicated above.
2.15 Ukraine
April 2. The period for not applying penalties for late payment and late reporting is extended until May 31. The moratorium for documentation audits of Unified Social Contribution (USC) is extended until May 31. Audits in process are stopped till May 31. The term for considering complaints of USC-payers received before May 31 excludes the time period till May 31. The term for submitting complaints with the deadline between March 18 and May 31 is set as May 31. Individuals registered as private entrepreneurs, freelancers or farmers are exempt from the mandatory payment of USC for the periods from March 1 to 31 and from April 1 to 30. Late payments and late reporting during March 1 to April 30 are not penalized. A temporary disability social allowance is available while confined to special healthcare institutions or self-isolation under medical supervision - 50% of the average monthly salary (income) but not more than the maximum income base from which USC was paid.
2.16 United Arab Emirates 
April 5. The General Pension & Social Security Authority (GPSSA) and the Board of Directors of the Abu Dhabi Retirement Fund has announced that all subscribing private sector companies will be able to defer payment of monthly employer subscriptions (i.e. Social Security and Pension contributions) in relation to their staff, starting with payments due in respect of March 2020 and running initially for 3 months period (i.e. covering payments due up to May 2020). 
April 5. This three-month grace period may be extended based on an updated assessment of the situation towards the end of the grace period. If an employer chooses to postpone payments, a catch-up payment for all months will be due when payments resume (currently June 2020).
2.17 Uruguay
March 16. Workers who have been infected with COVID-19 or must stay in compulsory quarantine, can be included in sickness leave and will be entitled to receive the corresponding allowance paid by the Social Security Office (equivalent approximately to 70% of the monthly salary).
March 18. Special unemployment subsidy Resolution 143 (Ministry of Labor and Social Security) established a special and temporary unemployment subsidy for monthly workers working in hotels, restaurants, pubs, travel agencies (among other), who faced a reduction of the working days (at least 6 days) or daily hours, by more than 50% of the working time. The subsidy paid amounts up to 25% of the monthly average salary of the last 6 months calculated on the basis of the unemployment period.
March 20. Resolution 163 issued by the Ministry of Labor and Social Security, extends the special unemployment subsidy created by Resolution 143 to monthly workers of all business sectors.
March 25. Decree 109/020 issued by the Ministry of Labor and Social Security established that workers over 65 years old, can be included in sickness leave where they stay in quarantine for 30 days. During this period, they will be entitled to receive the allowance paid by the Social Security Office (equivalent approximately to 70% of the monthly salary). Decree dated as of May 26 extends sickness leave for people over 65 years old up to June 30.
April 3. Sole-tax taxpayers, sole-proprietorship, partnerships and cooperatives with up to 10 employees included in the Industry and Commerce regime, will be beneficiaries of the following measures: (i) exemption of 40% of employer and employee SSCs corresponding to the ownership of the company and partners for the months of March and April; (ii) possibility to defer the 60% pending in six installments from the month of June.
May 31. Resolution 394 issued by the Ministry of Labor and Social Security provides more flexible conditions for workers to be included in the unemployment subsidy. This regime applied from April 1 to May 31,2020.
3. Main features
3.1 Targeted at remitting employers' burden, suspension of SSC payments, installments of SSC payments, and decrease of SSC tax rate are mostly adopted measures across the board.
3.2 In order to reduce the negative influence of COVID-19, many countries provide special provisions/ exemption of SSC for sectors that are severely hit by the pandemic (e.g. tourism, restaurants, entertainment venues, sports, cultural services, transportation, agriculture). 
3.3 Special compensation or income support is provided for workers whose operation or contract have been suspended because of COVID-19 and companies that have been heavily affected by the COVID-19 crisis and have suspended labor contracts.

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