Dependent workers who earn $11,902 a year or more must pay the appropriate percentage of income tax, as determined by President Daniel Noboa’s tax reform.

Those who must pay can present their company (employer) with a projection of personal expenses for the year in order to obtain a reduction in the monthly discounts for that role. He the maximum deadline is February 29, 2024since it is a leap year.

Projections show that Ecuador’s economy will grow by 2% in 2024, while the number of employed people in the region will grow by only 1%.

There are companies that request a projection more in advance, for example in two weeks of February or by the 20th of that month, in order to calculate the corresponding monthly discount in a table and report the data to the Tax Administration (SRI).

The maximum projection of the value of personal expenses for those without family obligations is equal to seven basic family baskets and takes into account that of January 2024, published by the National Institute of Statistics and Censuses (INEC) during the first week of February of that year.

To know this maximum value that can be projected as a personal expense, you have to wait for information from INEC; However, so that the citizen has an idea, the price of the basic family basket in January 2023 was 764.71 dollars, that is, the maximum amount that could be placed reached 5,352.97 dollars during the last year in the case of those who have no load.

Hugo Mejía, a tax expert, assures that “in general” the cost projection can be presented by February 29. However, the expert states that the accounting department of the company can request a projection of each employee until the 15th of that month.

Because? “Because they make monthly holds (rebates on stakes) based on a projection of what they’re going to spend,” he explains.

The Institute has forms on its website for showing the projection of personal expenses for the year.

The form can be downloaded from the following general link: https://www.sri.gob.ec/formularios-e-instructivos; or, to go directly, click here.

Data for the form

1. Date of submission of the form.

2. Taxpayer ID number.

3. Full names and surnames.

4. Estimated income: corresponds to a single monthly fee multiplied by the time spent in the company or institution in the period of 2023. The value of the contribution to IESS should not be underestimated.

Paying income tax becomes more flexible in 2023 and 2024 due to the rollback of Guillermo Lasso’s own reform

5. Estimated expenses: the maximum value that can be shown in personal expenses depends on family obligations.

The limit for personal expenses of a person without family obligations is seven basic family baskets, calculated using the value of this indicator registered by INEC in January 2024. As an example, in January 2023 it was $764.71; This results in an upper limit of $5352.97, obtained by multiplying the value by seven.

From now on, the maximum values ​​that are put into the projection according to the family load are calculated based on the costs of the basic family basket for January 2023, so that the taxpayer has an idea of ​​the maximum amount that could be included.

If he has family responsibilities, a person can deduct expenses up to the limit of nine baskets, which is equivalent to $6,882.39 in 2023.

If there are two fills, the limit extends to eleven baskets, which equates to $8,411.81.

For three refills, the spending limit is $10,705.94, which is equal to the value of fourteen basic family baskets.

When there are four family members, personal expenses can be projected up to $13,000.07, equivalent to seventeen baskets.

In the case of five or more loads, as well as for workers in charge of people with catastrophic, rare and/or orphan diseases, the limit is twenty baskets, which was equivalent to a value of $15,294.20 in 2023.

The form requires the distribution of expenditure amounts into six categories or fewer, as selected by each taxpayer. For example, distribution could be limited to the areas of education and nutrition if these items are sufficient to meet the established limit.

Payments greater than $500 can no longer be made in cash, as required by the Economic Efficiency Act, if a deduction or tax credit applies.

6. The worker or members of his or her family with a catastrophic illness: this field indicates Yes or No.

7. Number of family obligations to reduce personal expenses: family obligations include parents, spouse or common-law partner and children up to 21 years of age or with disabilities, regardless of age, as long as they have no income subject to taxes and are economically dependent on the taxpayer. In no case may two or more taxpayers take into account the same family member for the reduction of personal expenses.

Consent letter form – parents

8. Income tax reduction for anticipated personal expenses: the amount of the reduction depends on the workload and anticipated personal expenses.