Around 600,000 workers will receive up to 16% more take-home pay after Economy Minister Sergio Massa and the General Confederation of Labour (CGT) trade union federation agreed that some kinds of pay would no longer count towards the income tax threshold.

The agreement means that formally employed workers in a variety of professions will no longer have to pay the tax because they will fall below the threshold. They include teachers, security forces, industrial sector employees, and healthcare workers, according to the Economy Ministry. 

“Exempting various extras agreed in collective agreements from the income tax calculation is a political and economic decision that very clearly aims to recover the purchasing power of a sector of workers,” said CGT Secretary General Héctor Daer. 

“It is the extras in collective agreements that mean that after the wage rounds, workers move categories and are affected by income tax.”

Economy Ministry sources told reporters that the measure is expected to include remuneration such as overtime pay, productivity bonuses, and travel expenses. However, the details and the date of application have not yet been disclosed. 

Economy Ministry sources did not respond to requests from the Herald to confirm the details.

In Argentina, the threshold for paying income tax is AR$ 404,062 per month. At present, an estimated 12% of workers pay it. The threshold changes once a year, and with inflation running at over 100% inter-annually, it affects increasing numbers of workers until the minimum threshold is updated again.