Employer of Record in Brazil

Businesses can only operate smoothly in Brazil if they comply with local labor laws including drafting compliant employment contract agreements and meeting taxation and payroll obligations. Learn more about the employment laws and regulations in Brazil below, to avoid any compliance issues.

Employment Contract Requirements

In Brazil, verbal agreements are legally valid, but it is recommended to have written employment contracts. These contracts are generally indefinite, with the option for fixed-term contracts of up to two years in certain situations. They must be in Portuguese and use the local currency, covering essential employment terms such as:

• Identification of both parties
• Workplace, working hours, and overtime
• Starting date (and duration for temporary contracts)
• Job description, duties, and responsibilities
• Basic wage (including compensation or benefits)
• Total number of holidays
• Notice periods for employment termination
• Probation period
• Company policies
• Travel and transfer options
• Reference to collective bargaining agreements

Onboarding Process

We can help you get a new employee started in Brazil quickly, with a minimum onboarding time of just 1-2 working days. The timeline starts once the employee submits all required information onto the Playroll platform and completes any necessary local authority registrations. For non-nationals, the Right to Work assessment (if applicable) may add up to three extra days. Additional time may be needed for follow-ups on this assessment. Please note, payroll cut-off dates can impact the actual start date. Playroll's payroll cut-off date is the 10th of each month unless otherwise specified.

Working Hours in Brazil

In Brazil, the typical work schedule involves 44 hours per week, distributed over 8 hours per day. However, the maximum weekly and daily hours can vary from this standard, as stipulated in the employment contract or collective bargaining agreements.

Overtime in Brazil

Overtime, exceeding the standard 8 hours a day in Brazil, is compensated at 50% of the regular hourly wage, with potential increases based on collective bargaining agreements. For Sundays or holidays, the extra payment is 100%. Exemptions from overtime apply to roles such as trust, managerial, executive positions, and remote workers.

Probation Period in Brazil

Employees with indefinite contracts in Brazil undergo a 45-day probationary period, which may be extended to 90 days.

Fiscal Year in Brazil

1 January - 31 December is the 12-month accounting period that businesses in Brazil use for financial and tax reporting purposes.

Payroll Cycle in Brazil

The payroll cycle in Brazil is usually monthly or bi-monthly, with employees being paid on the 5th and 20th of the month.

Minimum Wage in Brazil

The minimum wage for employees in Brazil is typically 6.42 BRL per hour, amounting to ~1,412 BRL per month for a typical 44 hour work week.

Bonus Payments in Brazil

Workers with a year of service are eligible for a full 13-month salary, typically disbursed at the year's conclusion. This payment occurs in two parts: in November (free from INSS deductions or withheld taxes) and in December (with INSS contributions and tax withholding applied in the second instalment).

Employer Tax Contributions

Employer payroll contributions are generally estimated at an additional 7.50% - 14.00% on top of the employee salary in Brazil.

Employee Payroll Tax Contributions

In Brazil , the typical estimation for employee payroll contributions cost is around 7.50% - 14.00%%.

Individual Income Tax Contributions

Income tax in Brazil follows a progressive rate structure, with additional factors such as marital status and income level influencing the overall tax rates.

Pension in Brazil

The pension for old-age retirement in Brazil depends on gender and age. Women are eligible at 62 years old with a minimum of 180 months of social security contributions, while men qualify at 65 years old with a minimum of 240 months of contributions. The pension amount is 70% of the employees salary, with an extra 1% for each additional 12 months of contributions, up to a maximum of 100%.

In Brazil, work permits and visas are essential for employers hiring international talent. The key visa types include the VITEM V for temporary assignments, the Permanent Work Visa, the VITEM II for business trips, and the Digital Nomad Visa. Employers must comply with Brazilian labor laws, provide the necessary documentation, and plan ahead to navigate the application process successfully.

Mandatory Leave Entitlement in Brazil

The annual leave entitlement in Brazil is 30 days for a full time worker. These can include public holidays on top of that or within those days, which would otherwise be unpaid.

Public Holidays In Brazil

In Brazil, regional and national holidays are determined by federal, state, and municipal laws. They are not part of the minimum paid leave entitlement but are taken in addition to annual leave. Some holidays are movable and not observed universally across the country. National holidays in Brazil include:

Paid Time Off in Brazil

After a year of service in Brazil, employees are entitled to at least 30 days of annual paid leave, in addition to public holidays. The leave, calculated as a month's salary plus one-third as a bonus, is paid two business days before it starts. Brazil's Labour Reform allows the leave to be split over three months, with each segment no less than 14 days and the remaining days not less than 5.

Maternity Leave In Brazil

Pregnant employees in Brazil are entitled to 120 days of paid maternity leave, covered at 100% of their average salary by the employer. The government provides reimbursement through tax deductions for the same month. Extension of leave, based on a doctor's recommendation, is also possible, with continued full salary payment by the employer.

Paternity Leave In Brazil

Fathers in Brazil are entitled to 5 days of paid paternity leave, covered at 100% of their average salary by their employer. This leave cannot be extended.

Sick Leave In Brazil

There is no specified maximum duration for sick leave in Brazil. The compensation rates and responsible payers vary based on the length of the sick leave period:

• 0-15 days: paid at 100% of the salary by the employer
• 15 days onwards: calculation is based on prior contributions (capped at BRL 7,507.49) by the Social Security Agency (INSS)

Parental Leave In Brazil

There is no additional or separate parental leave policy beyond maternity and paternity leave in Brazil.

Bereavement Leave

Employees may take up to 2 consecutive days of paid leave in the event of the death of a family member.

Care Leave

Employees receive 30 days of annual paid leave to attend to the urgent needs of a family member below 12 years old and 15 days for an older family member.

Termination Process in Brazil

In Brazil, termination at-will is permitted with exceptions for specific employees (e.g., pregnant individuals, those injured at work, or elected presidents of the internal commission for accident prevention). Acceptable termination scenarios include:

• Mutual agreement
• Voluntary resignation by the employee
• Unilateral termination by the employer with valid reasons (such as gross misconduct, substance abuse, breach of trade secrets, or disciplinary dismissal)
• Conclusion of the employment contract due to expiration.

Notice Period in Brazil

Notice periods in Brazil are typically stipulated in employment contracts or collective agreements, with a standard provision of 30 days. However, the specific duration may vary based on the grounds for termination and the employee's tenure with the company:

• Termination by mutual consent: 15 days
• 1 year of service: 30 days notice
• More than 1 year of service: 30 days notice + 3 days for each year of service (maximum of 60 days)

Severance in Brazil

Employees terminated without cause in Brazil receive entitlements such as the balance salary, payouts for unused holidays, proportional 13th salary, and 40% of their Fundo de Garantia do Tempo de Serviço (FGTS) contributions. Conversely, termination with cause grants them nearly the same benefits, excluding the additional FGTS payment.