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Brazil

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  • Brazil
  • Taxes
  • Employment cost calculator
  • Benefits
  • Employee Rights
  • Employment Conditions
  • Remote Work
  • Hours of Work
  • Payment
  • Leave
  • End of Employment
  • Independent Contracting
  • Talent

    • Hiring employees in Brazil at a glance

    CURRENCY
    Brazilian Real (BRL)
    WORKING HOURS
    44 hours
    PUBLIC/BANK HOLIDAYS
    9 days 
    CAPITAL
    Brasília
    LANGUAGE
    Portuguese
    REMOTE WORKERS
    7.3M
    MINIMUM monthly SALARY
    BRL 1,212
    TAX YEAR
    1st Jan - 31st Dec
    DATE FORMAT
    DD/MM/YYYY
    MISCLASSIFICATION PENALTIES
    Fines of BRL 400,000 per employee, plus retroactive social security contribution, FGTS, and vacation with an interest of 75% to 225%.
    FUN FACT
    In Brazil, voting is mandatory; hence, the police cannot arrest or detain any voter five days before the election and two days after the election.

    Employment tax: 

    29% - 33.5%

    Social insurance: 8.5% - 12.5%

    Pension 8%

    Work accident insurance: 1%-3%

    Employee tax: 

    7.5% - 41.5%

    Social security: 7.5% - 14%

    Income tax:

    GROSS INCOME PROGRESSIVE TAX RATE
    Up to BRL 1,903.98 0%
    BRL 1,903.99 – BRL 2,826.65 7.5%
    BRL 2,826.66 – BRL 3,751.05 15%
    BRL 3,751.06 – BRL 4,664.68 22.5%
    More than BRL 4,664.69 27.5%

    Brazil employment cost calculator

    Use our handy calculator to understand what are all the employment costs you have to consider in Brazil

    Provide us with some extra details and we will send you a full breakdown of the salary costs.

    Employer of Record in Brazil

    Read more
    An Employer of Record is the legal employer of a worker in Brazil. As such, the Employer of Record has extensive knowledge and local expertise and takes care of all Brazil compliance aspects of employment, including payroll management, taxes, statutory employee benefits, employment contracts, severance pay and more.

    the employer of Record is responsible for:

    Ensuring their employment is compliant with local laws
    Processing local payroll
    Filing employment related taxes and returns
    Issuing payslips to the employee
    Distributing salary payments

    How Employer of Record works

    COMPANY

    Maintains a direct relationship with the employee, allocates them work tasks, and manages their performance.

    BOUNDLESS

    Takes care of payroll, taxes, and employee benefits, ensuring the employee and the company are compliant with all legal regulations.

    EMPLOYEE

    The third party to the employment agreement, the employee, fulfils all of their obligations as a worker for the company.

    Working Culture

    In partnership with GoGloby, LatAm & EU staffing agency
    Cultural Compatibility. Brazil has good cultural compatibility with U.S. companies, scoring “very good” on Gartner’s index. It’s also listed as one of the top 30 outsourcing locations.

    In Brazil, professional culture leans towards relationship-building, with personal interactions often preceding business discussions. This approach can be different from the US or UK, where the line between personal and professional life is more strictly defined. Unlike the US or UK, where punctuality is strictly observed, Brazilians have a more relaxed view of time.

    Brazilian businesses operate hierarchically, with decision-making centralized at the top. This contrasts with more flat organizational structures seen in some US and UK companies. Companies in Brazil frequently organize celebrations for various occasions, enhancing workplace camaraderie, like happy hours, holiday parties, celebrations/gifts for achieving goals, costume day, team travels and so on.

    Statutory Benefits in Brazil

    Read more
    13th month salary
    FGTS
    Holiday bonus
    Transportation voucher
    Daycare assistance

    Common Non-mandatory Benefits in Brazil

    Read more
    Meal voucher
    Food voucher
    Private health insurance
    Private pension
    Life insurance
    Extended maternity leave
    Extended paternity leave
    Family forming
    Flexible work
    Fuel allowance
    Support for transgender employees
    Annual bonus

    Employee Rights and Protections in Brazil

    Read more
    Written employment contract
    Payslip
    Holiday entitlement
    Health & Safety
    Protection from discrimination
    Unemployment funds
    Severance fund
    13th month salary
    Transportation voucher

    Paid annual leave: 30 days + bank holidays

    Paid paternity leave: 5 days with a possibility od additional 15 days through Empresa Cidadã

    Sick leave: determined by the doctor. Brazilian employers cover the first 15 days of paid sick leave. From the 16th day onward, Social Security (INSS) pays for the leave.

    Bereavement leave: 2 days

    Paid maternity leave: 120 days with a possibility of additional 60 days through Empresa Cidadã

    Probationary period

    Read more
    In Brazil, there is no standard length of the probation period.

    Tech Ecosystem

    In partnership with GoGloby, LatAm & EU staffing agency

    International Companies with offices in Brazil:

    Google, Amazon, Microsoft, Facebook, Netflix, Uber, Airbnb, Apple, Oracle, IBM, LinkedIn, Twitter, Adobe, Intel, Samsung, Cisco Systems, Dell, HP, Spotify, Salesforce, Slack, TikTok (ByteDance), Zoom, eBay, PayPal, Mastercard, Visa, Stripe, Nvidia, SAP, Siemens, Autodesk, VMware, Zoom, Accenture, Infosys, Cognizant, Workday, ServiceNow, NTT Data.

    Local Unicorns:

    Finteche-CommerceHealthtechEdtechReal Estate:

    Nubank

    PagSeguro

    StoneCo

    Ebanx

    iFood

    Loggi

    MercadoLibre

    		Dr. ConsultaArco EducaçãoQuintoAndar

     

    Incubators and Accelerators:

    1. Cubo Itaú: A leading entrepreneurial hub in Latin America located in São Paulo, Cubo Itaú aims to foster innovation and technological entrepreneurship.
    2. Startup Farm: Known as one of Brazil's most active accelerators, Startup Farm has a strong track record of supporting successful startups.
    3. Sebrae: This agency provides a range of services including business acceleration, support, and training to SMEs and startups.
    4. Porto Digital: Based in Recife, Porto Digital is a major tech park and innovation hub that includes an incubation program.
    5. InovAtiva Brasil: A nationwide acceleration program that offers training, mentoring, and connections to startups.

    Venture Capital Firms:

    1. Monashees: One of the leading venture capital firms in Brazil, Monashees has invested in several successful Brazilian startups like Nubank and Rappi.
    2. Kaszek Ventures: Kaszek is a leading Latin American VC firm that has made numerous successful investments in Brazilian startups.
    3. Redpoint eVentures: The Brazilian arm of Redpoint Ventures, this VC firm invests in early-stage tech companies in Brazil.
    4. Valor Capital Group: This cross-border venture firm focuses on US-Brazil opportunities and has backed numerous Brazilian startups.
    5. Canary: Canary is a São Paulo-based VC firm that invests in early-stage startups across Brazil.

    Payment Frequency

    There are two different pay frequencies, monthly or bimonthly, that companies adopt in Brazil, depending solely on the company and the applicable collective bargaining agreement. Employee termination must be written, signed, and dated.

    End of Employment

    Read more
    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.

    Employees who lost employment with or without cause must receive their salary and any outstanding payments on their last day of employment.

    Employees terminated without cause are entitled to severance pay, which consists of the funds employers put aside monthly for employees on their Time of Service Guaranteed Fund (FGTS). Additionally, employers must pay 40% of the balance of the employees’ FGTS as compensation.

    The Brazilian labor law recognizes some reasons that lead to termination with cause. However, employers must have a legitimate and recognized reason and must prove the misconduct.

    Infrastructure

    In partnership with GoGloby, LatAm & EU staffing agency
    Internet Connectivity: Brazil has one of the highest internet penetration rates in Latin America. Around 71% of the Brazilian population were internet users, a number that is projected to grow.

    Mobile Penetration: Brazil has a high level of mobile phone penetration, with more active mobile connections than inhabitants. As of 2021, there were more than 234 million mobile connections in Brazil, equivalent to a penetration rate of approximately 110%.

    Payment systems: Brazil's international payment systems include PayPal, Apple Pay, Google Pay, and major credit and debit cards. For international transfers, Brazilians often prefer PayPal, Wise (formerly TransferWise), or local fintech Remessa Online. As of 2021, Bitcoin led the crypto scene, followed by Ethereum, with exchanges such as Mercado Bitcoin, BitcoinTrade, and Foxbit in operation.

    Frequently Asked Questions

    What are my options if I want to hire a worker in Brazil?

    While there are generally four ways of employing people across borders, not all are legal or sensible. Here is an overview of each way to employ a worker in Brazil, outlining the potential cons.

     

    HQ country employment & payroll

    While the person is in Brazil, they are employed and payrolled directly by the company’s HQ entity.
    Cons: This may appear attractive, but it generally isn't legal in the long term. HQ payroll won't be possible if the person is not a tax resident in the HQ country.

     

    Independent contractor agreements

    People are locally registered as sole traders or limited liability company owners in Brazil and invoice for their work. There is no direct employment relationship.
    Cons: In Brazil, this is not a compliant or legal way to engage full-time workers who work solely for your company. There will be challenges in attracting and retaining talent.

     

    Direct local employer setup

    The company sets up as a fully-compliant local employer. This often involves setting up a local entity and local tax registration.
    Cons: Expensive, time-consuming, high-level of complexity. Unknowns around how obligations and costs will evolve over time. There will be a need to stay on top of changes in regulations.

     

    Partnering with an Employer of Record Brazil /full-service Professional Employer Organization

    Employment is handled by a platform that specialises in employing people on behalf of customer companies. The Employer of Record helps to hire and pay employees.
    Cons: For some countries, the ongoing costs may be higher than direct employment. Some education is needed to inform employees about how the employment relationship will work.

    How long does it take to set up a company in Brazil?

    Setting up a local company in New Zealand is very complicated. It gets even more complicated when you add all the monthly activities such as running and managing payroll for employees, filing taxes, extending and managing employee benefits, and following changes in local labour law rules and regulations. Here is an overview of everything you will find yourself needing to do.

    Can I employ people as independent contractors in Brazil?

    While many employers practice employing remote workers as independent contractors, it's a bad practice. If an individual is giving their full and undivided attention to your company in Brazil, treating them as an independent contractor is a likely breach of Brazilian employment laws and of those in your country.
     
    Your company could be liable for fines on owed holiday pay, sick leave pay, social welfare payments, paternity benefit, maternity benefit, or other legal measures. Since the individuals you are working with do not receive the benefit of local employment laws and protections that are often afforded to people working full-time hours.
     

    What does HR compliance mean in Brazil, and why does it matter?

    When you hire employees in Brazil, you have certain obligations as an employer. HR compliance is about ensuring your policies and procedures respect all applicable laws and regulations regarding employment and work practices. Complying with local employment law in Brazil is fundamental for the correct running of your business - not only because these laws are in place to protect employees and guarantee their rights are safeguarded, but to minimise your risk of liabilities as an employer. Being compliant means respecting and following all local labour laws, sick leave and illness benefits, annual leave, minimum wage, tax credits, working hours regulations.

    How much does it cost to employ someone in Brazil?

    As with every other country, there are certain costs associated with employing a worker in Brazil that come on top of the gross salary you are offering. A Brazilian employer must contribute to social insurance, pension, and work accident insurance, as well as a 13th-month salary, holiday bonus and FGTS penalties. To view the exact percentages and amounts given the salary you are planning to offer, you can use our handy calculator tool.

    What does Employer of Record mean in Brazil?

    It means that Boundless is the legal employer of the individual, as far as the Brazilian government, tax, and employment authorities are concerned. We are responsible for:
    • informing you about any pre-employment requirements
    • ensuring their employment is compliant with Brazilian employment law
    • informing you about the length of the maternity leave, paternity leave, public holidays, illness benefits, medical benefits
    • providing a locally compliant employment contract
    • processing local payroll
    • filing employment-related tax returns
    • issuing payslips to the employee
    • distributing salary payments
    • payments to the local tax authorities
    Customers that work with an Employer of Record in Brazil are responsible for:
    • sourcing and recruiting their own workers
    • managing the employee’s day-to-day work load
    • contributing to the personal / professional development of the employee through their work
    • following any guidance we give on employment and HR best practices or legal obligations in Brazil, such as the employment contract, public holidays, annual leave, sick leave, maternity and paternity benefits, probationary periods, overtime pay, statutory redundancy payments, liability insurance and many others
    • ensuring that payroll bills relating to their team are paid to Boundless before the cut-off point in each pay cycle

    Who is responsible for filing and paying employees' taxes and social insurance contributions in Brazil if employing through an Employer of Record?

    Boundless as the Employer of Record Brazil files all pertinent taxes and social security contributions as they relate to the compliant employment of an individual in Brazil.

    How does Boundless as an Employer of Record Brazil ensure HR compliance in Brazil?

    We carefully choose employment lawyers or advisories to partner with in each country we operate in, including Brazil. They ensure the Brazil employment contracts, and any other relevant documents required for new employees comply with the local jurisdiction. We thoroughly discuss specific local laws and key employment aspects such as payroll services, social protection, data protection, notice period, work-from-home employment regulations and clarify how collective bargaining agreements affect them. Whenever a potentially sensitive issue arises in Brazil, our internal team contacts the relevant firm to ensure all steps are taken to resolve it promptly.

    What are the legal responsibilities of a company when they use an Employer of Record service like Boundless in Brazil?

    The company remains responsible and informs employees of the day-to-day management of the people and teams that are employed through Boundless, including any disciplinary or performance issues.
     
    Boundless ensures compliance with Brazil-specific procedures, practices local labour laws and collective bargaining agreements while employing people and teams on behalf of the company.

    Do employees get all their rights and benefits when employed through an Employer of Record in Brazil?

    Any new employee that is locally employed through an Employer of record gets full employment rights and benefits as specified in Brazilian labor law. They get a locally compliant employment contract, statutory maternity leave, annual leave, illness benefits, any relevant tax credit, and many more. 

    What taxes do I need to pay in Brazil?

    In Brazil, both employers and employees have to pay taxes. For employers, these include social insurance, pension, and work accident insurance, as well as a 13th-month salary, holiday bonus and FGTS penalties. Employees pay social security tax as well as income tax. To get a clear overview of both employee and employer taxes, use our salary breakdown calculator, submitting any additional data needed and get a downloadable pdf like this one.

    Choose Boundless as your employment partner in Brazil
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