# Hire in Brazil

Source: https://overseashire.com/hire/brazil · verified 2026-10-05 · confidence medium

Large pool of software engineers, designers and customer-support staff, with strong English among senior tech talent. Time zone is 1-5 hours ahead of US Eastern (UTC-3 for most of the country), making it a popular nearshore choice for US teams.

## Employer cost
Employer on-costs 47–70% of gross salary. Recomputed 5 Oct 2026 as % of base salary over a year of 12 months' pay. Annual pay = 12 months + 13th salary (1 month) + 1/3 vacation bonus (0.33 month) = 13.33/12 = 1.111 x base. Charges on that pay: INSS employer 20% (PwC: 20% or 22.5% by sector) + RAT 1-3% (assume 2%) + third-party/Sistema S up to 5.8% (industry/commerce; some service FPAS codes lower, about 2.7-3.3%, unverified) + FGTS 8%. Upper case: 20 + 2 + 5.8 + 8 = 35.8% -> 1.111 x 1.358 = 1.509 = about 51% over base. Lower case (services, RAT 2%, third-party 2.7%): 20 + 2 + 2.7 + 8 = 32.7% -> 1.111 x 1.327 = 1.474 = about 47%. High end of 70% adds FGTS 40% dismissal-fine provision (8% x 1.111 x 0.4 = 3.6%), employer vale-transporte/meal vouchers and health plans commonly set by collective agreements (roughly 10-15%). Earlier note double-counted the 13th salary and vacation (8.33% + 11.1%) and gave 62% for what is about 51% under its own assumptions. Provider quotes of 70-100% include benefits and provisions. Simples Nacional entities pay differently.

| Contribution | Rate | Notes |
|---|---|---|
| INSS (employer social security) | 20% of payroll (22.5% for some sectors such as financial institutions) | Employer contribution on total remuneration with no ceiling. PwC: 'flat rate of 20% or 22.5%, depending on the industry's sector'. |
| RAT / SAT (work accident insurance) | 1%-3% (often 2% for tech) | Set by activity risk grade; adjusted by FAP multiplier. |
| Sistema S / third-party levies (Salario-Educacao, SENAI/SESI/SENAC/SESC, SEBRAE, INCRA) | up to ~5.8% in total (varies by sector) | Exact total depends on FPAS code / sector. |
| FGTS (severance guarantee fund) | 8% of gross monthly pay | Deposited into employee's account monthly, including on 13th salary and vacation pay; 40% fine on balance if dismissed without cause. |

Mandatory benefits: 13th salary (paid in two instalments, by 30 Nov and 20 Dec); Vacation pay plus 1/3 constitutional bonus; FGTS deposits (8%); Vale-transporte (commuting allowance) for employees who commute; Maternity leave 120 days (180 if Empresa Cidada); paternity leave 5 days in 2026 (Law 15.371 of 31 Mar 2026 raises it to 10 days from 2027, 15 from 2028 and 20 from 2029 with a paid 'salario-paternidade', per secondary sources); Meal vouchers, health plans, etc. are usually required by collective bargaining agreements (CCT) rather than statute

## Rules
- Payroll: monthly (salary due by the 5th business day of the following month); 13th salary paid in two instalments
- Probation: Experience contract (contrato de experiencia) up to 90 days total (one extension allowed within that cap).
- Notice and severance: Dismissal without cause: notice (aviso previo) of 30 days plus 3 days per completed year of service beyond the first, capped at 90 days (Law 12.506/2011) (worked or paid in lieu); FGTS balance released plus 40% fine paid by employer; proportional 13th salary and vacation pay. Resignation: employee gives 30 days' notice. Mutual agreement termination: 20% FGTS fine and 80% FGTS withdrawal.
- Termination: Just-cause dismissal (art. 482 CLT) forfeits notice and the fine but is closely scrutinised by labour courts and often reversed if poorly documented. Pregnant employees, workers on work-accident leave and CIPA representatives have job stability. Collective agreements may add protections. Labour litigation is common and employer-unfavourable; document everything.
- Working time: 8 hours/day, 44 hours/week. Overtime at least +50% (collective agreements often higher); 100% on rest days/holidays. Time-bank (banco de horas) permitted by agreement. Remote workers may be excluded from hour control only in defined cases.
- Paid leave: 30 calendar days of paid vacation after each 12-month accrual period (may be split into up to 3 periods), paid with an extra 1/3. About 9-12 national/state/municipal public holidays depending on location.
- Minimum wage: R$1,621 per month from 1 January 2026 (Decree 12.797/2025, published in the Diario Oficial on 24 Dec 2025 per news reports; PwC's 2026 INSS table also tops its first bracket at R$1,621). Some states and unions set higher floors.

## Contractors
High risk. Courts apply the CLT employment test (personal service, subordination, habitual service, pay). Misclassified 'PJ' contractors can claim retroactive INSS, FGTS, 13th salary, vacation and overtime, plus the 40% FGTS fine. The Supreme Court (STF) has been reviewing the legality of 'pejotizacao'; status of that ruling should be checked with local counsel.

## EOR
A foreign company cannot directly employ staff in Brazil without a local entity (Ltda/CNPJ registration, eSocial, bank account). EOR is commonly used to avoid the multi-month entity setup and to handle eSocial, FGTS, INSS and Sistema S filings. Deel states most EOR hires complete in 5-10 business days; own-entity setup is cited as roughly 4-6 months for CNPJ registration.
Onboarding: EOR 5-10 business days (Deel claim); own entity About 4-6 months for CNPJ registration (Deel claim), plus ramp-up for payroll/eSocial.

## FAQ
**Do I need a local entity to hire in Brazil?** To employ staff directly, yes: you need a registered Brazilian company (CNPJ). An employer of record lets you hire without your own entity.

**What is the total cost of an employee in Brazil?** Roughly 62%-100% on top of base salary once 13th salary, vacation bonus, FGTS, INSS and sector levies are annualised, with the upper end including voluntary and collective-agreement benefits.

**How much notice must be given for dismissal?** 30 days plus 3 days per full year of service, up to 90 days, plus a 40% fine on the FGTS balance for dismissal without cause.

**Can I hire Brazilians as contractors instead?** Possible for genuinely independent PJ providers, but misclassification risk is high and the consequences include back-pay of social charges and benefits.

Unverified: Exact Sistema S total (5.8% is a provider figure; varies by FPAS code, lower for many service activities); Decree 12.797/2025 text not fetched (R$1,621 consistent across news reports and PwC's bracket table); Current STF position on pejotizacao (Tema 1389); Public holiday count varies by municipality; Maternity leave and probation statutory text not fetched directly (aviso previo 30+3 days/year cap 90 and 90-day experience contract confirmed via secondary legal summaries); PEC 221/2019 (end of 6x1 schedule, 40 hours/week): approved by the Chamber on 27 May 2026 and pending in the Senate per press; not law yet - recheck; Employer benefit costs (vale-transporte, meal vouchers, health plan) in the 70% upper bound are estimates

Sources:
- https://www.deel.com/blog/employer-of-record-brazil/
- https://www.deel.com/blog/employer-costs-for-an-employee-in-brazil/
- https://costbench.com/guides/hiring-employees-brazil
- https://dupple.com/learn/how-to-hire-employees-in-brazil
- https://www.hivedesk.com/compliance/brazil
- https://taxsummaries.pwc.com/brazil/individual/other-taxes
- https://jovempan.com.br/economia/macroeconomia/lula-publica-decreto-que-aumenta-salario-minimo-para-r-1-621-em-2026/
- https://portal.trt3.jus.br/internet/conheca-o-trt/comunicacao/noticias-juridicas/importadas-2017/aviso-previo-proporcional-e-de-30-dias-e-mais-3-dias-para-cada-ano-trabalhado-incluindo-o-primeiro-ano-de-servico-21-03-2017-06-00-acs

Not legal or tax advice.