What do you need to know to hire in Brazil?
Brazil is the only major Latin American market where every employee earns a mandatory 13th salary, FGTS severance accrues from day one at 8% of gross pay, and dismissal without cause triggers a 40% penalty on the total FGTS balance. Each guide below takes one layer.
· Brazil guide
How does Teamed handle Brazil hiring for you?
Teamed becomes your legal employer of record in Brazil for from $599 per employee per month, with zero FX mark-up in any currency.
Payroll, contracts, and the full Brazilian CLT employment law stack run on one platform.
Real HR and legal experts manage every Brazil hire, from the first offer letter to the final termination documents. An actual person, not a chatbot or a pooled queue, handles your Brazilian team alongside EOR, contractor onboarding, and entity payroll on one platform. There is no setup fee and no exit fee. Employer cost passes through at cost, itemised on every invoice.
A Brazilian contractor who converts to CLT keeps their record, and that same employee can graduate from EOR to your own Brazilian entity without re-onboarding. Run the Crossover Calculator to see the month the model flips. EOR is the right model for a first Brazil hire, until it isn't.
- Brazil pays a mandatory 13th salary, and a vacation bonus on top. Every employee earns one full extra month of pay per year (Decimo Terceiro) plus a one-third vacation bonus (Terco Constitucional) when they take leave. No other EOR guide for Brazil leads with the cash-flow timing: the 13th salary splits across June and December. The cost breakdown guide runs those numbers.
- FGTS severance accrues from day one, not after a qualifying period. The employer deposits 8% of gross salary every month into a government-held fund. Dismiss without cause and a 40% penalty on the total FGTS balance is due on top. This is not notice pay. It is a separate, compulsory termination cost that most US buyers under-budget.
- Paternity leave expands in stages to 2029 under Law 15,371/2026. The current 2026 entitlement is 5 days. The law phases this up to 20 days by 2029. If you are building a multi-year Brazil headcount plan, the 2026 number is the floor, not the ceiling. The hiring guide covers the transition schedule.
Hiring in Brazil adds roughly 28 to 35 percent of gross salary in mandatory employer costs. Employer INSS social security is 20%, FGTS is 8% monthly, plus the 13th salary and vacation bonus paid across the year.
Brazil's employment law sits in the CLT, the Consolidacao das Leis do Trabalho. It is detailed, worker-protective, and strictly enforced. Most payroll and HR obligations are non-negotiable by contract.
Teamed runs Brazilian payroll, contracts, and compliance through an EOR entity holding the required local registrations.
This page is the map. Each guide below is the detail.
Zero FX. No setup fees. 48-hour onboarding. The price your finance team can forecast against without an asterisk.
How much does it cost to hire an employee in Brazil in 2026?
A Brazil hire costs roughly 128 to 135 percent of gross annual salary once all mandatory employer costs are added.
Employer INSS is 20%, FGTS is 8% monthly, and the 13th salary adds one more month of base pay per year.
The headline costs stack up fast. Employer INSS social security runs at 20% of gross salary. FGTS adds 8% every month into a government-held fund. The Decimo Terceiro (13th salary) is one full month of base pay split across June and December. The Terco Constitucional is a one-third vacation bonus on top of the 30-day leave entitlement. Additional employer contributions for RAT (accident insurance) and third-party contributions vary by sector.
Teamed's Brazil price is a starting rate, with zero FX in any currency pairing. No setup fees. No exit fees. Salaries, taxes, and benefits passed through at cost on every invoice.
The full breakdown, with worked examples at current rates, is in the cost guide.
Do you need a Brazilian entity to hire employees in Brazil?
No. An Employer of Record runs Brazilian payroll and CLT contracts from day one.
Your own Brazilian entity (LTDA or SA) becomes cheaper than EOR somewhere around 5 to 8 employees, depending on salary.
Forming a Brazilian LTDA requires registration with the JUCEB (Board of Trade), CNPJ tax enrolment, state and municipal inscriptions, and social insurance registration. Setup takes eight to twelve weeks and comes with ongoing payroll, accounting, eSocial filings, and annual obligations once live. An Employer of Record is faster and cheaper at low headcount. Teamed runs Brazilian payroll, contracts, and CLT compliance from day one.
The crossover point depends on Brazilian salary levels and your local accounting costs. For most tech roles it lands around 5 to 8 employees. The EOR vs entity guide runs those numbers.
Most EOR providers will not tell you when you have crossed it. We do, and we help you move. You progress from contractor to EOR to your own Brazilian entity on one platform under Teamed's Graduation Model, with tenure preserved.
What changed in Brazilian employment law recently?
Paternity leave begins a phased expansion under Law 15,371/2026, rising from 5 days today to 20 days by 2029.
The monthly minimum wage rose to R$ 1,621/month from 1 January 2026.
Law 15,371/2026, signed by Brazilian law firms Trench Rossi Watanabe and confirmed by BVA Advogados, phases in expanded paternity leave starting 2027. The current 2026 statutory entitlement is 5 days. The phase-in runs over three steps to 20 days by January 2029. If your Brazil headcount plan extends beyond 2026, build the higher entitlement into your cost model now.
The Salario Minimo (national minimum wage) is set by presidential decree each January. It rose to R$ 1,621/month from 1 January 2026. All minimum-wage-linked benefits and contributions floor update with it. The hiring guide covers day-one CLT obligations in full.
What benefits must you provide Brazilian employees in 2026?
The statutory floor is 30 days of paid annual leave, a one-third vacation bonus, a 13th salary, and 15 days of employer-paid sick leave before INSS takes over.
Brazil counts annual leave and public holidays separately. That surprises most US buyers who expect a bundled count.
Statutory annual leave is 30 days under CLT Art. 129, granted after 12 months of service. When the employee takes leave, you also pay the Terco Constitucional: a one-third bonus on top of the leave salary. Brazil has a number of national public holidays plus optional and regional observances. These are counted separately from the 30-day leave entitlement.
Sick leave: you pay the employee's full salary for the first 15 days. After that, INSS (Auxilio-Doenca) takes over at 91 percent of the benefit salary. Maternity leave is 120 days under CLT Art. 392, funded by INSS and reimbursable by the employer. Paternity leave is 5 days in 2026, rising under Law 15,371/2026 by 2029. The benefits guide covers each entitlement and the employer obligations.
What are payroll taxes in Brazil in 2026?
Employer INSS social security is 20% on gross salary.
Employee INSS contributions are progressive, starting at 7.5% and rising to 14% on the top band.
Brazil's main employer payroll levy is INSS at 20% of gross salary (Lei 8.212/1991 Art. 22). On top of that, employers pay RAT (occupational accident insurance) at 1 to 3 percent depending on sector risk, plus third-party contributions (Sistema S) that add roughly 5 to 5.8 percent for most industries. The total employer burden beyond INSS often lands at 6 to 9 percent additional.
On the employee side, INSS contributions are progressive from 7.5% to 14%. IRPF income tax is also progressive: earnings up to R$ 28,467.20/year are exempt (faixa de isencao). The rate then rises from 7.5% through to 27.5% at the top band. Teamed handles all employee deductions, eSocial filings, and DARF tax payment. The tax and payroll guide sets out every band and threshold.
How do you terminate an employee in Brazil?
Brazilian statutory notice starts at 30 days and rises by 3 days for each full year of service beyond the first.
Notice caps at 90 days regardless of tenure (Lei 12.506/2011).
Dismissal without cause triggers three compulsory payments beyond notice. First, the balance of accrued leave plus the Terco bonus. Second, the proportional 13th salary for the year. Third, the 40% multa (penalty) on the total FGTS fund balance accumulated for that employee. All final pay (verbas rescisorias) must be settled within 10 days of the termination date (CLT Art. 477).
Mutual agreement termination (distrato, under CLT Art. 484-A) reduces the FGTS penalty to 20% and limits the employee's FGTS withdrawal to 80 percent of the balance. For mass terminations, a union negotiation attempt is required following STF case law. The termination guide covers each route in full.
What should you know before hiring in Brazil?
Two things catch US buyers out. The first is the true cost of termination.
The second is that the 13th salary and vacation bonus create predictable cash spikes that need to be in the annual budget from day one.
Termination is more expensive than US buyers model. Beyond notice, a dismissal without cause triggers the 40% FGTS penalty on the total fund balance, accrued leave, and the proportional 13th salary. Final pay must clear within 10 days. An employee with three years of service can represent two to three months of fully-loaded cost to exit cleanly. The EOR vs entity and termination guides both show worked examples.
The 13th salary and vacation bonus have fixed payment windows. The Decimo Terceiro first instalment is due by 30 November, the second by 20 December. The Terco vacation bonus is due when the employee takes leave. Miss a deadline and the employee can sue for double the amount. Brief your finance team on these dates before the first Brazilian hire.
Frequently asked questions
How much does it cost to hire an employee in Brazil?
Plan on roughly 128 to 135 percent of gross annual salary once employer INSS at 20%, FGTS at 8% monthly, the 13th salary, and the vacation bonus are all included. Teamed's Brazil fee is one flat number per employee per month, with zero FX mark-up in any currency pairing. The cost breakdown guide has worked examples.
Can a US company hire in Brazil without an entity?
Yes. An Employer of Record like Teamed runs Brazilian CLT payroll, contracts, and compliance through its own registered entity. You direct the work. Teamed becomes the legal employer of record. Setup takes 48 hours once terms are confirmed. Forming your own LTDA takes eight to twelve weeks and requires CNPJ registration, JUCEB filing, and social insurance enrolment.
What is the Brazil mandatory 13th salary?
The Decimo Terceiro (Lei 4.090/1962) is one full month of base pay per year, paid in two instalments: the first by 30 November, the second by 20 December. Employees who have not completed a full year receive a proportional amount. It is mandatory for all CLT employees and is not negotiable by contract.
What are Brazil statutory notice periods?
The minimum statutory notice is 30 days for the first year of service. Notice then grows by 3 days for each additional full year of service, capped at 90 days regardless of tenure (Lei 12.506/2011). During the probation period (periodo de experiencia, up to 3 months), no notice period applies if the contract term ends.
What is FGTS and how does it work?
FGTS (Fundo de Garantia do Tempo de Servico) is a government-held severance fund. Employers deposit 8% of gross salary every month from day one of employment. There is no qualifying service period. If you dismiss the employee without cause, a 40% penalty on the total accumulated FGTS balance is due in addition to notice and final pay.
What is the minimum annual leave for a Brazilian employee?
Statutory paid annual leave is 30 days under CLT Art. 129, after 12 months of service. When the employee takes leave, the employer must also pay the Terco Constitucional: a one-third bonus on top of the normal leave salary. Brazil counts annual leave and public holidays separately.
Brazil has a detailed labour code and it is all enforced. The CLT has been in place since 1943 and the rules are codified, not discretionary. The mistake most US buyers make is treating the 13th salary and FGTS penalty as optional or negotiable. They are not. Teamed builds every Brazil contract on the statutory floor so the first hire never becomes a compliance catch-up.
Brazil has mandatory rules that do not bend. A 13th salary, a vacation bonus, FGTS from day one, and a 40 percent penalty when you dismiss without cause.
Most of the cost surprises in Brazil come from not reading those rules before the first hire.
Read the right Brazil guide before that hire, not after the first CLT claim.
