Social security is system set up by governments that provides monetary assistance to people with an inadequate or no income. Independently of the governance of a social security system, these are funded through the contributions of the working force. There are as many different structures of social security as there are countries with an implemented social security system: the assistance and amounts provided can be quite variable. Examples of most common types of assistance provided through a social security system:
- Sickness leave
- Contribution to the social security
Social security systems are funded by the working force, as most systems imply a contribution levied on employees and a contribution levied on companies. Both are based on a workers gross salary, but the rates that are applied for employees and employers are usually different.
The contribution made by the employee is retained by the company and thus may affect slightly the cash flows, however it does not correspond to a cost of the company. But the social security contribution payed by the company is a cost that needs to be added to the gross salary and other items of the workers’ income in order calculate the total cost that the company sustains with its employees.
Social security in CASFLO APP
In CASFLO APP you only need to state the social security rate upon companies, as this is the contribution that implies an increase of the total cost per employee.
The Corporate social security is setup on the project settings and is applied to every worker. It works independently of the employees’ benefits input method (by category or by employee).