PLR is the Company’s Profit Sharing, a benefit granted by the company to its employees. Your pay is a competitive advantage to attract and retain the best talent.
For qualified and high-performance professionals, there is a big difference between looking for a job and looking for a company that offers you good benefits like PLR.
Also know that this is one of the differentials that most attract the best talents to the company.
This is because not all organizations offer this type of benefit to workers, and PLR can be seen as a great competitive advantage over its competitors.
What is PLR?
PLR is an acronym for Profit Sharing. It is a benefit paid by the company to employees and works as a bonus for employee participation .
The amount received is a percentage calculated according to the company’s profitability in that year.
Law 10,101/2000 regulates the participation of workers in profits and results, but it is worth mentioning that this is not a mandatory benefit in labor legislation.
However, when it is decided to pay employees, a negotiation is carried out between the company and the employees through a joint commission or union support.
There are collective agreements of various categories that establish the right to PLR and this must be agreed with the professional union.
In addition, even if it is not part of the collective agreements, the company can also pay the profit sharing spontaneously and this must be defined in the contract or in the company’s regulation.
How does PLR work and what are the most common forms of payment?
As the main objective of PLR is to encourage the pursuit of goals by valuing the work of each employee, the benefit conditions are flexible.
This means that there is no legal stipulation that determines the ideal date for payment by the company.
Therefore, the PLR can be paid once a year or every six months, and this varies according to what is defined in the contract.
Payment methods can also be combined based on the company’s profitability and there are two ways that are the most adopted in the market.
We will explain a little more about these two modalities below. Check out!
Individual payment to the employee or by sector
In the payment, separately, the company grants the benefit according to the performance of each employee during the period.
Thus, if the employee reaches a certain goal, he receives the defined percentage of the company’s profit.
The same thing happens when it is agreed that the amount will be received according to the result of each sector.
This is the way most used by institutions that opt for PLR, as it is a safer and fairer way to reward individual or team efforts.
Payment for the entire company
In this modality, the company sets a profit target to be achieved in the year and, if achieved, all employees will receive an equal percentage .
This means that, regardless of your productivity, attendance, commitment and other factors, the value of PLR will be the same for everyone.
This option usually divides the opinions of many entrepreneurs, as there are two impasses: the first is that the goal may not be reached and everyone is left without the benefit, no matter how hard they try.
The second is about how fair it is for some employees who produced more to receive the same amount as others who did not have such good results.
What is the difference between PLR and PPR?
Profit Sharing (PLR) is paid only when a very important word of this term is reached: the company makes a profit .
Therefore, it is not an expense with no return, but a payment linked to the goal that the company achieved and that resulted in its profitability. That is, if there is no profit, there is no PLR .
The Profit Sharing Program (PPR) , despite having a similar name, has a different function. He is not paid only when there is a profit, as in the first case.
PPR is tied to meeting specific industry or company goals, even if there are no profits . If the goal is achieved, there is also payment.
Although PPR is well-regarded by many entrepreneurs in relation to PLR — as it is believed that they are easier goals to achieve — PLR usually has a higher value award, as it is linked to the company’s total profit. that year.
However, it is important that you know the differences between them and decide on the best bonus.
Both are non-mandatory benefits , it is up to the company to decide if it wants to adopt one of them and which one will be the best choice.
What are the benefits for companies offering PLR? See 8 of them!
The main advantage of adopting PLR comes when employees realize that they are being valued for their work.
Thus, they understand the function of this benefit and decide to wear the company’s shirt in search of better results and high productivity.
Therefore, the conditions must be clear so that the team understands where it can go and what level it can reach through this type of incentive.
If the teams are aware of the profitability that both they and the company can obtain with the profit sharing policy, both will have benefits as described below.
1. Increase in the company’s profit
Including employees in the pay for profitability is a factor that motivates employees , and when they are more engaged, they tend to produce more .
In this way, the company gains a lot in productivity and, consequently, in profitability.
However, it is essential that employees participate in the planning of goals to understand whether they are feasible or not.
Thus, based on an open dialogue, they will be able to negotiate and understand what goals they need to achieve and then plan their internal routines with a focus on achieving the purpose.
2. Does not encumber the payroll
One of the great advantages for the employer is that the PLR has no tax burden , that is, it does not burden the companies ‘ payroll .
This is one of the reasons why companies of different sizes can adopt the benefit. In addition, the amount paid can be deducted from the organizations Income Tax.
3. Improved product or service quality
An entity only makes a profit when it achieves its goals, bears all its expenses and has money left over to invest in its production, its employees, adequate infrastructure, better inputs, training for the team , machinery or any other improvement.
It is from profitability that the company is able to offer better services and reach more customers (or operate in different niches) and, with that, expand the business.
That is why PLR is important, as it stimulates growth and helps the institution not only bear its costs, but also manage to have a budgetary slack and develop.
4. Employees’ feeling of belonging
No matter how motivated employees are , they all like to be rewarded for their work, especially if they are paid extra for it.
This appreciation arouses the feeling of belonging and the desire to contribute to the company’s results . After all, they know that everyone will benefit from it.
5. Increase in productivity
When a team knows that producing more is synonymous with earning more money in its account — and not intangible benefits such as discounts on services or bonuses that don’t make much sense — it becomes much more engaged with the performance of activities in favor of fulfilling the goal. goal.
This is possible because when it comes to real money, people usually value it more than any other benefit .
After all, with money you can carry out more projects than with other types of bonuses. And do you need something more motivating to produce than earning extra money on top of your salary?
6. More team integration
When there is payment for results sharing, teams tend to become more self-responsible and collaborative.
This helps employees to police themselves and monitor each other’s results.
Employees who understand their role in the company’s results and know that this will define total productivity and profitability in the end are able to improve their sense of self -management , control their time to produce more and perform a more integrated work with the rest of the group.
7. Reduction of absenteeism rates
Unmotivated employees tend to miss more work, either because they get sicker due to stress or other emotional factors involved, or because they no longer see the point in staying at the company due to dissatisfaction.
Adopting PLR is one of the advantages in this sense, as the worker is encouraged to produce more, knowing that he will have financial benefits from it . And those who need to increase their production can’t miss work, right?
Also, if a high rate of absenteeism is one of the conditions that can reduce the percentage received in profit sharing of the company, he will strive to miss less and have chances of earning more.
8. Decreased turnover
Professionals who feel valued and who have a good organizational climate to work and produce more have less need to look for other opportunities in the market, as the chances of them being happy there are great.
This contributes to the reduction of turnover in the company, that is, turnover , one of the indices that most harm the business and delay its development.
As we said at the beginning, the PLR offer is one of the great differentials to attract the best professionals in the market and retain these talents.
So that there is no doubt about these advantages, we have prepared a summary that can help you decide whether or not to implement PLR in your company.
Who can offer profit sharing and results?
In addition to the advantages mentioned above, here is another one in offering PLR: any company can invest in this type of benefit .
Regardless of the segment or size, if Profit Sharing or Results makes sense for your business, you can create a plan to include your employees.
However, it is worth mentioning that the fact that it is comprehensive does not mean that payment can be made in any way, randomly and without observing specific regulations.
Reinforcing what we said at the beginning: the benefit is not mandatory , but if you decide to introduce it in the company, the rules must be respected.
Who is entitled to PLR?
All employees are entitled to PLR, including those who provide services on a temporary basis .
However, the values may vary according to profitability, the hierarchy adopted, the positions, the goals achieved individually or by sector, the assiduity of the worker and several other parameters established by the company.
It is worth noting that the company that offers participation cannot withdraw the benefit from workers as a form of punishment.
That is, the suppression must be provided for in the collective agreement, in the company’s regulation or in the contract with the employee.
Both the rules for granting and withdrawing must be agreed upon and made clear to all.
How to calculate PLR?
As Profit Sharing is a benefit resulting from negotiation between employer and employees – through a committee formed by employees, union representative and the company, or through collective agreement -, know that, as with payment, it is not there is a rule to calculate the PLR.
Law 10,101 only determines that payment more than twice a year is prohibited and that the periods must respect the three-month interval.
For this reason, most companies prefer to define the half-year period for receiving employees or at the end of each year, when the balance sheet is prepared.
However, the legislation itself suggests some criteria and conditions for carrying out the negotiation, taking into account that everyone is aware of the distribution periods, validity and deadlines for reviewing the agreement. Are they:
- productivity , quality and profitability index of the company;
- target programs;
The agreement will define the payment period — whether the benefit will be annual or semi-annual — and what conditions employees must meet to be entitled to participation.
Therefore, in addition to the above criteria, we suggest the inclusion of factors such as individual productivity of all workers and the absence rate as determining criteria for the calculation.
For example: from five absences in the year , a percentage x will be deducted from the employees’ PLR.
Or, even, whoever reaches x% above the stipulated target, will receive a higher percentage than the one who just reached the target – always observing the company’s profit.
How to calculate proportional PLR?
Taking into account the period agreed for payment of the PLR, all employees must receive the amount for the work interval.
This means that if the employee was dismissed from the company in the meantime, he will be entitled to the amount proportional to the months he worked during the year .
Thus, even if the contract has ended and the worker receives the severance pay, he must obtain the PLR for the finalized period (separately), referring to the payment being made by the company after his departure, as he contributed with a certain result .
How is the PLR and the tax issues of the worker and the company?
Profit sharing does not have a salary nature and much less replaces the employee’s salary in the month in which it is paid.
Therefore, it must be understood solely and exclusively as a benefit, as it is a way of rewarding the employee for his work.
In addition, it does not apply to other bonuses , additional or commissions , nor to labor charges.
However, the PLR is levied on the Income Tax of professionals and this will be deducted at source by the employer.
The good news is that the charge will vary from the percentage received by the worker.
As an example, if the employee receives up to R$ 6,677.55 from the company in participation, he will be exempt from the tax. From there, check the table below:
|IRF TABLE FOR PLR|
|Calculation basis (R$)||Aliquot||Installment to be deducted from the IR (R$)|
|From 0.00 to 6,677.55||—||—|
|From 6,677.56 to 9,922.28||7.5%||500.82|
|From 9,922.29 to 13,167.00||15%||1,244.99|
|From 13,167.01 to 16,380.38||22.5%||2,232.51|
How can I implement PLR in my company?
Did you realize how many advantages PLR can offer your company? Now it’s time to put what you’ve learned into practice!
Together with your HR team, managers and business partners, it is possible to prepare a careful and efficient plan to define details of this type of payment. We have selected some tips below.
Define which goals will be part of the PLR payment
In the previous topic, we informed you that there is no specific rule to calculate the PLR and we suggest some factors that can be evaluated for payment, if the organization makes a profit, right?
So, calmly analyze which are the most important goals at the moment and which should be part of the benefit.
For example, if absenteeism is high in the company, it can be considered to calculate Profit Sharing or Results.
That is, the obstacles that prevent the institution’s growth — or that it has a better workflow — must be clear so that goals can be defined precisely, making sense for the parties.