The start of a new year always brings tax adjustments, and the increase in the Tax Unit (UIT) is one of the most anticipated. For 2025, the government has established that the new UIT will be S/ 5,350, an increase from S/ 5,150 in 2024. This increase will directly impact Income Tax (IR) calculations and other tax items affecting employees on payroll.
What is the ITU and why does it matter so much?
The Tax Unit (UIT) is a reference value used in Peru to determine taxes, fines, deductions, and tax benefits. Its annual update is intended to adjust for inflation and reflect the country’s economic conditions. For employees on payroll, the UIT (Unit Tax Unit) is crucial because it defines the amount of income exempt from Income Tax.
With the new value of S/ 5,350, employees will be able to exempt up to S/ 37,450 of their annual income (equivalent to 7 UITs), before applying the IR scales. This can represent an advantage for many taxpayers, but it may also imply adjustments to their tax obligations.
Impact of the increase in the UIT on payroll taxes for employees
The increase in the UIT (Tax-Income Tax) has several implications for formal workers. These are the main ones:
Higher Tax-Exempt Amount
By increasing the UIT (Tax-Income Tax), the limit for tax-exempt income also increases. This particularly benefits workers with incomes below S/37,450 per year, as they will be exempt from paying income tax.
Adjustment to Tax Scales
For those earning more than this limit, taxes are calculated based on the progressive income tax scales (8%, 14%, 17%, 20%, and 30%). Although the increase in the UIT allows for greater deductions, it may also mean that some taxpayers pay more if their gross income places them in higher brackets.
Impact on Additional Tax Benefits
Deductions for expenses related to health, education, rent, or mortgage interest are also calculated based on the UIT (Tax-Income Tax). An increase in this value may allow for higher deductions, but only if the necessary records and documents are available to support them.
What should you do to optimize your taxes in 2025?
Taking advantage of the benefits of the UIT increase requires planning and knowledge. Here are some actions you can take:
Analyze your tax bracket: Determine which income tax bracket you fall into and evaluate whether you are taking advantage of all available deductions.
Organize your deductible expenses: Keep receipts for payments related to healthcare, education, rent, and other deductible items. These expenses can help you significantly reduce your tax burden.
Consult with experts: A specialized accountant can help you project your taxes and implement strategies to maximize your tax benefits.
Tax planning: your best ally in the face of changes
Although the UIT increase can be an opportunity to reduce your tax burden, it also entails risks if not managed properly. Errors in your tax return, such as misapplied deductions or miscalculated income, can lead to penalties or overpayments.
Therefore, it is essential to have the support of specialists who can help you fulfill your tax obligations accurately and efficiently.