Employer of Record (EOR) in Brazil | 2025 Update
Expanding into Brazil offers vast opportunities, with its dynamic economy, diverse talent pool, and thriving industries. However, navigating Brazil’s intricate labor laws, payroll systems, and compliance requirements can be overwhelming. This is where an Employer of Record (EOR) streamlines the process, enabling you to hire top talent in Brazil without the hassle of setting up a legal entity.
In this guide, we explain how EOR services simplify business expansion in Brazil while ensuring full compliance.
What Is an Employer of Record in Brazil ?
An Employer of Record (EOR) acts as the legal employer for your workforce in Brazil. It handles payroll, taxes, benefits, and legal compliance, while you maintain control over daily operations. An EOR removes the complexity of establishing a local entity, allowing you to focus on business growth.
With an EOR, you can focus on growing your business instead of dealing with the complexities of setting up a local entity.
➡️ Learn more: What Is an Employer of Record (EOR)?.
Employment In Brazil
Brazilian labor law, governed by the Consolidation of Labor Laws (CLT), ensures comprehensive worker protections. It mandates strict regulations on contracts, work hours, benefits, and terminations. Employers must follow these laws to maintain compliance and avoid penalties.
Employers must strictly follow the law to avoid legal issues. Compliance ensures smooth hiring and operational success.
Employment agreements in Brazil
A written employment contract is not mandatory in Brazil, but experts highly recommend it to clarify roles and responsibilities. Both parties must sign, and it should include:
- Employer and employee details
- Job role and responsibilities
- Work hours and location
- Salary and benefits
- Employment duration (fixed or indefinite)
- Notice period and termination terms
All contracts must align with Consolidação das Leis do Trabalho (CLT), Brazil’s labor code, and be registered in the Carteira de Trabalho (CTPS).
Probationary periods in Brazil
Brazilian labor laws permit probation periods of up to 90 days. These agreements allow employers to assess new hires while remaining compliant with local laws.
➡️ Check our complete guide: Probationary Periods in Brazil
Average working hours in Brazil
A standard workweek in Brazil consists of 44 hours, typically spread over five or six days. Any work beyond this requires overtime compensation.
Overtime
Overtime pay in Brazil is regulated by the CLT. Employees receive 150% of their regular hourly wage for overtime. Work on Sundays or holidays requires 200% pay, ensuring fair compensation for extra hours.
➡️ Check our complete guide: Overtime in Brazil
Leave in Brazil
Annual Leave Accrual Entitlement
Employees are entitled to 30 days of paid vacation annually after one year of service. Vacation pay includes an additional 33% bonus of the regular salary.
➡️ Check our complete guide: Holidays & Leave Entitlement in Brazil
Public Holidays
Brazil observes 8 national public holidays, along with several regional and state-specific holidays. Regional public holidays differs from a state to another.
- New Year’s Day (Ano Novo) – January 1
- Carnival (Carnaval) – Variable date (February/March; Monday and Tuesday before Ash Wednesday) *
- Good Friday (Sexta-feira Santa) – Variable date (Friday before Easter) *
- Tiradentes’ Day (Dia de Tiradentes) – April 21
- Labor Day (Dia do Trabalho) – May 1
- Corpus Christi – Variable date (June; 60 days after Easter) *
- Independence Day (Dia da Independência) – September 7
- Our Lady of Aparecida (Nossa Senhora Aparecida, Padroeira do Brasil) – October 12
- All Souls’ Day (Dia de Finados) – November 2
- Republic Proclamation Day (Proclamação da República) – November 15
- Christmas Day (Natal) – December 25 **
*Carnaval, Good Friday, and Corpus Christi are optional holidays (Ponto facultativos). Carnaval is a mandatory holiday in Rio de Janeiro, and Corpus Christi is a mandatory holiday in São Paulo.
**Most companies observe Christmas Eve and New Year’s Eve starting at 2 p.m. on the day of the holiday.
Maternity, Paternity and adoption Leave
Brazilian law grants mothers 120 days of paid maternity leave and fathers five days of paternity leave. Employers may offer extended leave through government incentives.
➡️ Check our complete guide: Parental Leave in Brazil
Sick Leave
Employees who cannot work due to illness or injury are entitled to sick leave, regulated as follows:
- The first 15 days of absence are paid by the employer.
- Starting on the 16th day, compensation is provided by the National Institute of Social Security (INSS).
- Employees must present a valid medical certificate from an accredited professional or institution to qualify for paid sick leave.
For severe or long-term illnesses, employees can receive extended benefits through the INSS, ensuring financial security during recovery.
➡️ Check our complete guide: Sick Leave in Brazil
Payroll in Brazil
Payroll cycles in Brazil
In Brazil, employers pay employees monthly. Payment must occur by the fifth business day of the following month.
Depending on the CBA, employees can receive 40% of their salary by the 15th of each month.
Wages in Brazil
As of January 1, 2025, Brazil’s monthly minimum wage is set at R$1,518. However, many states establish higher regional minimum wages.
➡️ Check our complete guide: Minimum Wage in Brazil for 2025
Payroll contributions for employers
Employers in Brazil must meet several mandatory payroll contributions, ensuring compliance with labor and social security laws. Below is an overview:
| Contribution | Rate | Purpose |
|---|---|---|
| Social Security (INSS) | 20% of gross salary | Covers retirement, disability, and other benefits. |
| FGTS (Severance Fund) | 8% of gross salary | Provides severance pay for employees. |
| Terceiros (Third Parties) | 5.8% of payroll | Funds professional organizations (e.g., SESI, SENAI). |
| RAT (Workplace Risk Insurance) | 1% to 3% of payroll | Covers workplace accident risks and disabilities. |
➡️ Learn more: Payroll Contributions for Employers in Brazil
Payroll contributions for employees
Employees also contribute to Brazil’s social security and tax systems:
| Contribution | Rate |
|---|---|
| Social Security (INSS) | 7.5% to 14% (progressive) |
| Income Tax (IRRF) | 0% to 27.5% (progressive) |
➡️ Learn more: Payslips in Brazil: Key Insights for Employees
Streamline Your Expansion with EOR Services in LATAM
Expand across Latin America effortlessly with our Employer of Record (EOR) services. We handle compliance, payroll, and employee management, ensuring smooth operations while you focus on growing your business.
Benefits in Brazil
Mandatory benefits in Brazil
Brazil mandates several benefits, including:
- Pension fund (FGTS): Every business that hires employees under the CLT (Consolidated Labor Laws) must contribute to the FGTS, including private sector businesses, public sector entities, and domestic employers.
- Transportation Allowances: Employers subsidize commuting expenses.
- Meal Vouchers: Tax-deductible benefits help cover food costs.
These benefits make a company more competitive in Brazil’s talent market.
Supplemental benefits in Brazil
Supplemental benefits in Brazil exceed federal mandates, offering employers a competitive edge in attracting and retaining talent. These benefits cater to employee well-being and enhance overall compensation packages. Below are the most common supplemental benefits in Brazil:
Private Health Insurance: Public healthcare in Brazil can have long wait times and limited coverage. Employers often provide private health insurance to offer employees access to faster, high-quality medical care for themselves and their families.
Meal or Food Vouchers: Employers commonly offer vouchers or prepaid cards that employees can use to purchase meals or groceries. These are tax-deductible for companies and a highly appreciated benefit for workers.
Productivity and Performance Bonuses: Bonuses tied to performance metrics reward employees for meeting or exceeding goals. These payments, often tax-efficient, motivate employees and improve business outcomes.
Terminations in Brazil
Notice Periods in Brazil
Minimum statutory notice period in Brazil is 30 days, capped at 90 days. For each year of service completed, 3 additional days are added to the 30 days.
Employers can choose to pay employees in lieu of notice. Employees who decide not to work during the notice period won’t receive the total severance pay.
➡️ Check our complete guide: End of employment and termination in Brazil
Severance pay in Brazil
Severance payment in Brazil includes the following items:
- Salary balance
- Notice period salary
- 13th month salary (Pro-rata including notice period)
- Accrued and unused holidays (Pro-rata + notice period)
- Any penalties or fines related to collective bargaining agreement**
- FGTS fine (In case of termination without cause)
** In Brazil, an employer will pay a fine if the the termination occurs one month before the publication of the collective agreement
Types of Visas in Brazil: Understanding Your Options
Brazil offers various visa categories to accommodate foreign nationals based on their intended activities and duration of stay. Key options include:
| Visa Type | Purpose | Duration |
|---|---|---|
| Temporary Work Visa | For professionals with employment contracts in Brazil. | Up to 2 years, renewable. |
| Business Visa | For short-term business activities like meetings or conferences. | Up to 90 days. |
| Permanent Visa | For individuals relocating permanently for investment, retirement, or family reunification. | Unlimited. |
| Digital Nomad Visa | For remote workers employed by foreign companies. | 1 year, renewable. |
An Employer of Record (EOR) in Brazil can guide you through these visa options, ensuring compliance and simplifying employee onboarding.
➡️ Check our complete guide: Visas in Brazil
Frequently Asked Questions (FAQ)
What are my options if I want to hire a worker in Brazil?
HQ Country Employment & Payroll:
Employees are hired and paid through the company’s headquarters.
Cons: Often illegal in the long term if the employee isn’t a tax resident in the HQ country.Independent Contractor Agreements:
Workers operate as sole proprietors and invoice for their services.
Cons: Not compliant for full-time roles under Brazilian law, making it hard to attract and retain top talent.Setting Up a Local Entity:
Establish a compliant local employer in Brazil.
Cons: Costly, time-consuming, and requires ongoing management of payroll, taxes, and local regulations.Partnering with an Employer of Record in Brazil:
Employment is managed by the EOR on your behalf.
Cons: Slightly higher ongoing costs, but saves significant time and ensures compliance.
How does an Employer of Record (EOR) ensure HR compliance in Brazil?
EORs work with local legal and HR experts to ensure employment contracts and processes comply with Brazilian labor laws. They handle contracts, payroll, benefits, and terminations in line with regulations, reducing your risk of legal liabilities.
Who is responsible for paying taxes and contributions in Brazil through an EOR?
The EOR manages and files all employment-related taxes and contributions, ensuring compliance with Brazilian tax authorities. Employers only pay a consolidated invoice to the EOR.
What taxes do I need to pay as an employer in Brazil?
Employers must pay contributions such as INSS (20% of gross salary), FGTS (8%), Terceiros (5.8%), RAT (1%-3%), and others. Using an EOR ensures accurate calculation and timely payment of these contributions.
Can I hire in Brazil without using an EOR?
Yes, but you’ll need to set up a legal entity in Brazil, manage local compliance, and handle payroll and tax obligations directly. Using an EOR simplifies the process and ensures compliance without requiring a local presence.
Can I employ people as independent contractors in Brazil?
While possible, treating full-time employees as independent contractors is risky. Misclassification violates Brazilian labor laws, potentially leading to fines and legal repercussions. It’s better to hire through an EOR to ensure compliance.
How long does it take to set up a company in Brazil?
Setting up a legal entity in Brazil takes generally 6 months due to the complexity of registration, tax setup, and regulatory compliance. An EOR eliminates this delay, enabling you to hire employees in Brazil quickly.
Get Started with an Employer of Record in Brazil
Hiring in Brazil can seem complex, but an Employer of Record (EOR) simplifies the process. Europortage handles employment contracts, payroll, benefits, and compliance, letting you focus on growth.
Ready to expand your team in Brazil? Contact us today to learn more about how we can support your business expansion.
