Hire employees in Brazil

Quick answers

The questions leadership teams ask first, answered directly. Detail follows further down the page.

Hiring routes compared

Foreign companies have to weigh corporate presence, labor court exposure, speed to market and permanent establishment risk. Here is how the routes compare.

What an employee costs in Brazil

Brazil layers payroll taxes, a monthly severance fund deposit and constitutional accruals on top of every salary. The percentages below apply to total gross pay, with no ceiling on the employer side.

For an employee on BRL 240,000 gross, budget roughly BRL 385,000 to 420,000 all-in. Ask us for a cost model with your sector's accident rate and CCT applied.

Payroll and tax

Brazilian payroll runs monthly. Under CLT Article 459 wages must be paid by the 5th business day of the following month, with Saturdays counting as business days. Most collective agreements also require a 40% advance mid-month. Every workforce event is transmitted in real time through eSocial; the pre-admission event is due at least 1 business day before the start date and syncs with the digital work card (CTPS Digital). Payroll events feed DCTFWeb for the unified federal tax payment, and FGTS Digital generates the monthly deposit slip, payable via PIX by the 20th. Employees receive an itemised payslip (holerite).

Income tax withholding (IRRF) and employee INSS

The employer withholds both. Employee INSS is progressive from 7.5% to 14% up to a monthly ceiling. Income tax is calculated monthly on gross pay less INSS and dependant deductions, on brackets from 0% to 27.5%, exempt below about BRL 2,259 a month. DIRF reporting sits inside eSocial and EFD-Reinf.

Statutory minimum wage

Brazil sets a national minimum wage each year by federal decree, indexed to inflation plus GDP growth. Several states publish higher regional floors for specific occupations. In practice the binding floor for professional roles is the union wage (piso salarial) in the applicable CCT. Nominal wages can never be reduced except by collective agreement, and employers with 100 or more staff must publish equal pay reports twice a year.

Leave and mandatory benefits

• Paid vacation. 30 calendar days for every 12 months worked, plus a constitutional bonus of one third, paid at least 2 days before leave starts. It must be granted within the following 12 months or it is owed double. By agreement it can be split into three periods, none shorter than 5 days, and employees may sell up to 10 days.
• 13th salary. One twelfth of December pay per month worked, paid in two instalments: 50% by November 30 and the balance by December 20, with INSS, income tax and FGTS settled on the second.
• Sick pay. The employer pays the first 15 consecutive days; from day 16 INSS pays a temporary incapacity benefit after a medical assessment.
• Maternity. 120 calendar days, extendable to 180 under Empresa Cidadã. Paid by INSS, advanced by the employer and offset against its monthly remittance. Dismissal is prohibited from conception to 5 months after birth.
• Paternity. 5 consecutive days, or 20 under Empresa Cidadã, paid by the employer.
• Other leave. 3 days for marriage, 2 days for bereavement, 1 day a year for blood donation.
• Transport voucher. Mandatory where commuting costs exceed 6% of base salary; the employer may deduct up to 6%. Remote employees can opt out in writing.
• Meal vouchers. Required by almost every CCT and regulated by the PAT programme, with a tax incentive.
• Working time. 8 hours a day and 44 a week by constitution; multinational tech employers usually contract 40. Overtime is capped at 2 hours a day at 150%, or 200% on rest days and holidays. Night work between 22:00 and 05:00 carries a 20% premium. Employers above 20 staff must run certified electronic time tracking, and telework must be written into the contract.

Termination and notice periods

There is no at-will employment, but dismissal without cause (demissão sem justa causa) is permitted at the employer's discretion against fixed statutory payments. Probation (contrato de experiência) is capped at 90 days in at most two segments and converts to an indefinite contract on day 91. Ending it early without cause costs half the remaining days. Notice is proportional to service under Law 12,506/2011.

• Notice can be worked or paid. If worked, the employee may shorten each day by 2 hours or take 7 consecutive days off. Most employers pay it in lieu.
• The 40% FGTS fine. On dismissal without cause you pay 40% of every FGTS deposit ever made into the employee's account, including interest. It is the single largest exit cost.
• 10-day payment deadline. All severance is due within 10 calendar days of termination under CLT Article 477. Miss it and you owe an extra month's salary.
• Mutual agreement exit (Article 484-A). Both sides agree: notice indemnity halves, the FGTS fine drops to 20%, and the employee can withdraw 80% of their FGTS balance but loses unemployment insurance.
• For-cause dismissal is narrow. Article 482 covers theft, insubordination, abandonment and similar grave misconduct, with immediate documented proof. Overturned in court, it becomes a dismissal without cause with all penalties.
• Protected categories. Pregnant employees to 5 months post-birth, CIPA safety committee members to 1 year after their term, union leaders to 1 year after their mandate, and work accident victims for 12 months after INSS leave ends.
• Dismissal medical exam. The demissional health exam (ASO) is mandatory before the employee leaves.

Can I use independent contractors?

Only for genuinely independent businesses, and the labor courts look at reality, not paperwork. Under CLT Article 3 an employment relationship exists whenever four elements are present: personal performance (pessoalidade), regularity (habitualidade), payment (onerosidade) and subordination (subordinação). If a PJ contractor works set hours, follows your managers, cannot send a substitute and works for you continuously, the court voids the contract and orders retroactive payment of every CLT entitlement: 13th salaries, vacation plus one third, 8% FGTS for every month plus the 40% fine, overtime and union floor adjustments. The Federal Revenue Service then assesses unpaid employer INSS, Sistema S and income tax withholding with interest and fraud penalties of 75% to 150%. Anyone who works like an employee should be employed, and an EOR is the compliant way to do that without an entity.

The legal framework in brief

Brazilian employment law is civil law, heavily codified and built around protection of the worker, with collective agreements sitting above statute on many topics. The instruments you will hear referenced most:

• Federal Constitution of 1988, Article 7. The 44-hour week, 13th salary, 30 days of vacation plus one third, FGTS, prior notice, maternity and paternity leave and union representation.
• Consolidation of Labor Laws (CLT). Decree-Law 5,452/1943, modernised by the 2017 Labor Reform (Law 13,467). Contracts, hours, overtime, telework, unions and dismissal procedure.
• Collective agreements (CCT and ACT). Under CLT Article 611-A, negotiated terms prevail over statute on hours banks, remote work allowances and meal vouchers. Every employer is bound by the CCT for its primary activity, union member or not.
• FGTS Law (Law 8,036/1990). The 8% monthly deposit, withdrawal triggers and the termination fine.
• Law 12,506/2011. Proportional prior notice from 30 to 90 days.
• General Data Protection Law (LGPD, Law 13,709/2018). Enforced by the ANPD. HR processing rests on legal obligation or contract, not consent, covert monitoring is prohibited, and fines reach 2% of turnover up to BRL 50 million per violation.
• Regulatory Standards NR-01 and NR-07. The PGR risk programme, the PCMSO medical programme and mandatory admission, periodic and dismissal exams.
• Labor Justice (Justiça do Trabalho). 24 Regional Labor Courts and the Superior Labor Court (TST), whose precedents (súmulas) shape daily practice.

Where the talent is

Brazil is Latin America's largest economy and the eighth largest in the world, with the region's largest developer community of more than 500,000 software engineers. Brasília time (UTC-3) overlaps 1 to 3 hours with US Eastern and Central. English is common in tech hubs, but contracts, filings and court proceedings are in Portuguese.

This guide is general information, not legal, tax or immigration advice. Brazilian labor, tax and social security rules change regularly through legislation, collective bargaining and court precedent. Confirm current figures with a qualified adviser or with Dryft before acting. Last reviewed September 2026.