Brazil Employer of record (EOR)
Europortage offers a comprehensive Brazil employer of record (EOR) solution that simplifies the process of hiring your talent in Brazil. Our EOR Brazil service allows you to hire employees in Brazil without the need to establish a legal entity. Instead, Europortage acts as the legal employer, managing all aspects of employment in compliance with employment laws in Brazil.
Our employer of record in Brazil brings extensive local expertise, ensuring full compliance with Brazilian regulations. We handle everything from payroll management and taxes to statutory employee benefits, employment contracts, and severance pay. When you partner with Europortage, you can confidently hire in Brazil knowing that your operations align with local laws.
OUr Brazil Employer of Record (EOR) Responsibilities:
✔️ Drafting locally compliant contracts
✔️Processing payroll accurately and on time
✔️ Providing an excellent employee experience
✔️Seamlessly handling global mobility
✔️ Paying your talent in local currency
Employment cost calculator
Use our cost calculator to understand all the employment costs when you hire employees in Brazil. Provide us with additional details, and we’ll send you a full breakdown of salary costs.
Employment taxes in Brazil
Partnering with a Brazil employer of record (EOR) can be a game-changer for your business. The EOR manages the legal responsibilities of employment, including contracts, onboarding, compliance, benefits, and payroll.
Social security contribution (INSS)
INSS, or Instituto Nacional do Seguro Social, is a crucial component of employment laws in Brazil. This social security agency, part of the Ministry of Social Security, plays a significant role in the country’s social welfare system.
Employers in Brazil are required to contribute to the INSS on behalf of their employees. Typically, the employer’s contribution is either 20% or 22.5% of the employee’s gross monthly salary, and notably, there is no cap on this contribution.
For more detailed insights on social security tax and INSS contributions, visit our guide on Social Security Tax in Brazil.
Severance & Pension fund (FGTS)
The Fundo de Garantia do Tempo de Serviço (FGTS) is a fundamental aspect of employment laws in Brazil. This fund, created by employers for each employee, serves as a financial safety net covering severance indemnity.
Employers are required to deposit an amount equivalent to 8% of the employee’s gross monthly salary into the FGTS account.
Over time, these monthly deposits accumulate, forming the FGTS fund, which belongs entirely to the employee. In certain situations, such as dismissal without cause, retirement, or purchasing a home, employees can access the total amount in their FGTS account.
For more in-depth information on FGTS and its implications, visit our guide on What is the FGTS Fund in Brazil?.
Work accident insurance (RAT)
The Risco Ambiental do Trabalho (RAT) is a social security contribution. Basically, the RAT tax is the working accident contribution the company needs to pay to cover work-related injuries.
The rate applied for the coverage of this insurance can be:
- 1% for the company in whose activity the risk of work accident is considered light;
- 2% for companies with a medium work accident risk;
- 3% for companies with a work accident risk considered severe.
Social tax (Terceiros)
This tax is another contribution to governmental institutions related to employee’s fund for training. This tax includes the following taxes : SENAI, SESC, SESI, etc.
The contribution stands usually at 5,80% of the gross monthly salary.
Employee taxes in Brazil
Residents in Brazil are required to pay taxes on their worldwide income on a monthly basis.
If you’re looking to hire in Brazil, our employer of record Brazil service ensures that all tax obligations, such as social security and income tax, are efficiently managed in compliance with employment laws in Brazil.
Social security contribution (INSS)
The first calculation corresponds to the amount that goes to Social Security. From the gross salary, the deduction is made according to the following table:
| MONTHLY SALARY | RATE |
| Until R$ 1.412,00 | 7,5% |
| From R$1.412,01 to R$2.666,68 | 9,0% |
| Between R$2.666,69 and R$4.000,03 | 12,0% |
| From R$4.000,04 to R$7.786,02 | 14,0% |
*updated 24/01/2024
Income tax (IR)
The Income Tax is an annual tax levied on the individuals and companies’ incomes by the Federal Government. The government requires workers and businesses to report their annual income to the Receita Federal. The taxpayer needs to report all service income and expenses for the previous year.
The period is usually from the beginning of March to the end of April.
The amount deducted from the employee’s salary depends on his monthly income according to the following table:
| CALCULATION BASIS | RATE |
| Until R$ 2.259,20 | 0,0% |
| From R$ 2.259,21 to R$ 2.828,65 | 7,5% |
| Between R$ 2.826,66 and R$ 3.751,05 | 15,0% |
| From R$ 3.751,06 to R$ 4.664,68 | 22,0% |
| Above R$ 4.664,68 | 27,5% |
* updated 01/2024
Statutory Benefits in Brazil
When you hire in Brazil, employers must provide certain statutory benefits to employees, ensuring compliance with local labor laws. These benefits include the 13th-month salary, paid vacation with a bonus, and transportation vouchers.
13th month salary
13th-month bonus is a compensation in Brazil given to employees at the end of the year in twor installments. While it may seem like a Christmas bonus, 13th month pay isn’t a optional benefit; it’s part of employment law, so employers must pay it.
Learn more about the 13th month salary in Brazil.
Vacation Bonus
The second mandatory benefit in Brazil is the vacation bonus. In Brazil, employees are entitled to a minimum holiday period of 30 days. However, employees need to complete a 12 months of work to benefit from it.
When leaving on holidays, the employee is entitled to his normal pay and a vacation bonus which equals to one third of the gross salary.
Transportation vouchers
All employees under the CLT regime, including those hired on a temporary basis, benefits from transportation vouchers. Commutes longer than 1 kilometre are paid by the company.
The benefit does not apply if the employee is working remotly.
Common Non-mandatory Benefits in Brazil
Employee benefits and conditions are legal rights in Brazil. Employers must comply with these, but they can also offer additional benefits to attract and retain talent. Depending on the company’s CBA, some non-mandatory benefits might become mandatory.
Meal vouchers
Called “vale refeição” in portuguese, there are a really common benefits in Brazil and a mandatiry benefits under Europortage CBA. In general, the benefit is offered as a card with a cash value that can be used in the company’s canteen or in partner restaurants.
The value of the meal vouchers depends on the CBA and the city the employee leaves. The unusued amount accumulates on the card.
Food vouchers
Called “vale alimentação” in Portuguese, this benefits is quite common in Brazil. It allows the employee to buy food in grocery stores and supermarket.
Food vouchers are usually granted alonside meal vouchers.
Private Health Insurance
Medical assistance is one of the benefits most valued by professionals. Many companies offer different health plans according to the professional’s position. Other companies offer both health and dental plans together. And some companies extend the benefit to the employees’ families.
Private Pension
Less common than private health insurance, private pension is often a benefits provided by larger companies in Brazil.
Employees contribute out of their salary at the same rate as the company.
Life insurance
Life insurance is a common benefits in Brazil, especially at larger companies. They are tied to the employee’s position, salary and age.
Payments in Brazil
Minimum wage
The minimum wage in Brazil is adjusted annually in January. As of January 1st, 2024, the minimum wage is BRL 1,412.00 per month.
The daily rate will be R$47.07 and the hourly rate will be R$6.42.
Five states have their own minimum wage; each one must be higher than the federal minimum wage listed above.
- São Paulo: BRL 1.550,00 (2023)
- Rio de Janeiro: BRL 1.412,00 (2024)
- Paraná: BRL 1.927,02 (2024)
- Santa Catarina: BRL 1.521,00 (2023)
- Rio Grande do Sul: BRL 1.573,89 (2023)
To understand the details of the minimum wage in Brazil, check out our complete guide here. Learn more about how to hire in Brazil with the latest insights!
Payroll frequency
Employees in Brazil typically receive monthly payments. However, bi-weekly payments are also common depending on the company or CBA.
Payday
If paid once a month, employees are usually paid on the last working day of the month. If paid twice a month, employees are usually paid on the 15th and 30th of the month.
Payment requirements
Salary payment must be done on a local bank account.
Working time and overtime in Brazil
Working hours
The standard workweek is 44 hours. Each workday lasts 8 hours Monday through Friday and 4 hours on Saturdays. However, employer-employee contracts and collective bargaining agreements usually set the workday hours at 9 hours per day and two full days off.
Overtime
Overtime in Brazil is tightly regulated under employment laws in Brazil, making compliance essential for businesses. The standard workweek is 44 hours, and any hours worked beyond this quota must be paid as overtime. According to Article 59 of the CLT, employees cannot work more than 10 hours in a single day, including overtime.
Overtime pay in Brazil is generally set at twice the normal base salary rate. However, work performed on Sundays and public holidays is compensated at an additional 100% above the regular pay, while night shifts receive a 20% premium. If an employee’s overtime exceeds 9 hours in a week, the compensation increases to triple the regular hourly rate.
For businesses planning to hire in Brazil, understanding these regulations is crucial to avoid legal complications. Proper tracking and compensation of overtime are mandatory, and failure to comply can lead to significant penalties. By partnering with a Brazil employer of record like Europortage, you can ensure that when you hire employees in Brazil, all overtime regulations are followed meticulously, safeguarding your business and maintaining employee satisfaction. Contact our team for the most up-to-date information and support.
Time tracking obligations in Brazil
Employment laws in Brazil mandate strict time tracking obligations for businesses with more than 20 employees.
Employers must accurately record working hours, including breaks, to ensure compliance with local labor laws. This requirement is crucial when you hire employees in Brazil because it helps prevent disputes related to overtime and ensures that employees receive fair compensation.
However, certain roles, such as external employees, remote workers, and those in positions of trust, are exempt from these tracking requirements.
Leave in Brazil
Annual leave & Public holidays
Full-time employees are entitled to 30 days of paid leave each year after completing their first year. They are also entitled to a vacation bonus of one-third of their regular monthly salary. Brazil has 8 national holidays, and about 50 state holidays. First thing to remember is that state holidays differ from a state to another.
When you hire in Brazil, remember that your remote workers are going to have different public holidays in they do not work in the same state.
- 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.
Sickness and disability leave
Employees in Brazil are entitled to maximum compensation from their employer for the first 15 days of illness (upon presentation of a medical note). Thereafter, they may receive payments from a social program called INSS.
Paternity and maternity leave
Parental leave in Brazil is a critical aspect of employment laws in Brazil, particularly for businesses planning to hire in Brazil. Mothers are legally entitled to four months of maternity leave, during which they receive their full salary and benefits. Importantly, they cannot be terminated during their pregnancy or within one year of their child’s birth. This protection ensures job security and financial stability during this crucial period. Under specific circumstances, employers may extend the maternity leave by an additional 60 days and write off the payment as a tax deduction.
Fathers in Brazil are also entitled to parental leave, though their leave is shorter. They may take up to five days of paid leave following the birth of their child.
For more detailed information, you can visit our comprehensive guide on parental leave in Brazil.
End of employment in Brazil
In Brazil, employment can be terminated without cause at any time, provided the notice period is respected (or paid in lieu) and the employee receives their severance pay.
Termination notice period
The minimum required notice period is set at 30 days by the CLT (Brazilian labor law). Some CBA and employment agreement may include longer notice period, capped at 90 days.
An additional 3 days’ notice is added to the 30 days for every year of employment, also capped at 90 days. In Brazil, the employers can choose to pay the notice in lieu.
Termination with cause does not require a notice and termination by mutual agreement allows the notice to be cut in half.
Employees who work through their notice period are entitled to a work schedule shortened by two hours daily or seven days in total while receiving their full remuneration to look for work. The employee must have been employed for at least 12 months to be entitled to this right.
Severance
The employer pays the FGTS fine in case of termination without cause or indirect termination (employer’s just cause). The fine is equivalent to 40% of the FGTS fund. It is calculated considering all the deposits of the FGTS fund that were made during the employment relationship.
In case of termination by mutual agreement, which is when the parties decide together to terminate the contract, this amount will be 20%.
How to hire in Brazil
Entity setup
Establish a legal entity in a specific country will allow your business to operate legally in the country, hire, pay and manage your talents there.
Independent contractor
This solution might seem a good fit to reduce the cost of setting up an entity or hiring a full-time employee. Engaging a contractor can be a winning strategy in some cases and will depend of your business strategy and goals. For instance, it is a great solution when you need a talent for a short-term project.
Use an Brazil Employer of record (EOR)