Ecuadorian workers have until the end of the month to submit their projections of personal expenses for 2026, which can significantly reduce their monthly income tax contributions.
Ecuador is approaching the deadline for workers in dependent employment to submit their personal expenses projections for the year 2026 to their employers. This projection is crucial because it allows companies to calculate the monthly income tax deductions that will be reflected in employees' paychecks. As February progresses, various public and private sector companies are distributing the required forms to their employees, with some already having done so before the holiday while others will distribute them shortly.
The Internal Revenue Service (SRI) provides a downloadable form on its website specifically for employees who earn over $12,208 annually, emphasizing the importance of this submission for tax purposes. Employees are expected to project their personal expenses across various categories, including food, education, arts and culture, health, clothing, housing, and domestic tourism. The limit for these deductions will depend on the number of dependents claimed by the employee, further tailoring tax obligations to individual circumstances.
This initiative not only helps individual workers potentially lower their income tax deductions from an average of $130 to as low as $11 but also promotes fiscal responsibility and planning among employees. By providing a structured approach to declaring expectations for personal expenses, the government aims to enhance compliance and streamline the tax collection process, which could also lead to improved funding for public services in Ecuador.
