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Payroll and Benefits Guide Brazil

Last updated: May 02, 2023

Currency
Brazilian Real (BRL)
Employer Taxes
36.58 – 41.08‬%
Payroll Frequency
Bi-Weekly
Employee Costs
14%
Capital
Brasilia
Date Format
dd/mm/yyyy
Fiscal Year
1 January- 31 December
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Contributions

Employer

Employer Payroll Contributions

20.00% to 26.80%

Social Security (INSS)

2.00%

Work Accident Insurance (RAT/FAT)

8.00%

Employees Severance Indemnity Fund (FGTS)

5.8%

Terceiros (3rd party institution)

2.78%

Vacation bonus

36.58 – 41.08‬%

Total Employment Cost

 

Collective Bargaining Agreement (CBA)

The majority of companies are subject to a CBA which require additional benefits to be given to workers including those listed below

20-50 BRL per working day

Meal Vouchers

130 BRL per month

Grocery Vouchers (mandatory in some CBAs and for lower income)

~ 350 BRL per month

Transportation vouchers (sum will vary according to transportation distance)

Employee

Employee Payroll Contributions

7.50%

Up to 1,320.00 BRL Social Security contribution

9.00%

1,320.01 BRL to 2,571.29 BRL Social Security contribution

12.00%

2,571.30 BRL to 3,856.94 BRL Social Security contribution

14.00%

3,856.95 to 7,507.49 BRL Social Security contribution

7.50% – 14.00%

Total Employee Cost

Employee

Employee Income Tax

0.00%

Up to 22,344 BRL annually

7.50%

22,344 – 33,924 BRL annually

15.00%

33,924 to 45,012.62 BRL annually

22.50%

45,012 to 55,980 BRL annually

27.50%

55,980 and above annually

25%

Flat rate for Non-residents, taxed exclusively at source on their Brazilian-sourced income.

Employer taxes

Highest
Lowest

Employee taxes

Highest
Lowest

Minimum Wage

General

The national minimum wage is 1,320 Brazilian reals

MINIMUM WAGE (PER MONTH)

Highest
Lowest

Payroll

Payroll Cycle

The payroll cycle in Brazil is generally either bi-weekly or monthly, the monthly cycle is more common.

13th Salary

In Brazil, a mandatory 13th-month salary payment is paid to the employees at the end of the year.

Employees who have worked for 12 months are entitled to receive the full payment, while those who have worked for part of the year will receive a payment proportional to the period worked.

The 13-month payment is made in two installments; one in November, which corresponds to the six months worked up to that date (with no INSS deduction from or withholding taxation due), and one in December (INSS contribution and withholding tax are applied to this second installment.)

Authority Payments

Authority Payment

Paid To

Due Date

Income Tax (IRRF)

IRRF

20th of the following month

Social Security  (INSS)

INSS

20th of the following month

Guarentee Fund (FGTS)

FGTS

7th of the following month

Working Hours

General

Standard working hours within Brazil are 44 hours per week, 8 hours per day.
The maximum weekly and daily working hours can differ as stipulated in employment contract/collective bargaining agreements.

Overtime

All work that exceeds the standard 44 hours a week is to be paid as overtime and is regulated by the employment contract/collective agreements, etc. In general, overtime maximum limits are set at 2 hours per day and paid at 150.00% of the standard salary rate.

Work on a holiday is paid at the rate of up to 200.00% of the regular pay.

Working Week

Monday-Friday

Leave

Paid Time Off

Paid leave in Brazil is set in the employment contract as a minimum of 30 days paid holiday per year (following completion of  one year of service) in addition to public holidays.

The leave is calculated as a monthly salary plus an additional bonus of one-third of the monthly salary and must be paid two business days before the start date of the leave.

The Labor Reform allows the split of the paid leave period, where the employee can take the leave in up to three periods, one of which cannot be less than 14 days and the others cannot be less than five days each.

Vacation Days
Public Holidays
Highest
Lowest

Public Holidays

There are 13 national holidays.  Other additional holidays may apply depending on the region.

Sick Days

All employees are entitled to paid sick leave and must provide a medical certificate within 48 hours of the first day of sickness.
The first 15 days of sick leave are paid by the employer (at a rate of 100.00% of the usual salary rate), and then the leave is paid by Social Security (INSS).

However, the INSS rate does not correspond to the actual salary; it is a specific INSS-based calculation based on contributions made and capped at approximately 6,100.00 BRL. During the employee’s sick leave, the employer is still required to pay social security contribution.

Maternity Leave

All female employees are eligible for maternity benefits, including when adopting a child. The maternity benefit will be paid to the employee for 120 days and is paid by INSS, the Brazilian social security agency, generally, it will go to the employer who will then pay this benefit directly to the employee. During the maternity leave, the employer will continue to pay social contributions on behalf of the employee. Additionally, during maternity leave, the employee continue to accrue annual leave and is entitled to 13 salary.

The employer can extend the maternity period to 180 days if enrolled in the government scheme (Empresea Cidada).

PAID MATERNITY LEAVE (DAYS)

Highest
Lowest

Paternity Leave

The father is entitled to mandatory paid paternity leave of 5 days, which the employer can extend to 20 days if enrolled in the government program (Empresea Cidada) which provides some requirements established by the government program.

Parental Leave

There is no additional parental leave in Brazil.

Bereavement Leave

Employees are entitled to up to 5 consecutive days of paid leave for the bereavement of a family member.

Care Leave

Employees are also entitled to 30 days of paid leave per year to provide urgent and essential care to a family member younger than 12 years of age and 15 days for an older family member.

Marriage Leave

Employees are entitled to up to three consecutive days of paid leave after getting married.

Termination

Termination Process

The termination process is standard in Brazil, with notice periods required unless an employer can provide sufficient cause for dismissal without notice (due to misconduct, disobedience, etc.). Lack of notice of termination must be in writing and sent to the relevant governmental authorities.

Notice Period

In general, notice periods in Brazil are stipulated within the employment contract/collective agreement and are linked to the reason for termination and the employee’s length of service. For employees with one year of service, the employer must provide 30 days’ notice. For employees with over one year of service, the employer must provide 30 days’ notice plus three additional days for each year of service (maximum of 60 additional days).

Employee termination must require the employee to give 30 days’ notice.
Should the termination be with mutual consent, the required notice period may be halved.

Severance Pay

In case of termination without cause, the employee is entitled to severance, amounting to the equivalent of 40 percent of the balance in the employee’s Unemployment Guarantee Fund (Fundo de Garantia por Tempo de Serviço or FGTS), accrued during the employment relationship.

Additional payments will be due, such as one month’s salary if the termination takes place in the 30 days before the expected date of the collective bargaining agreement for the following period; payout of accrued vacation plus 1/3 vacation bonus; pro-rated 13 months’ pay; and other payments required by the applicable collective bargaining agreement or contract.

In case of termination with cause, accrued unused vacation plus vacation bonus and other payments required by the applicable collective bargaining agreement or contract are still required, but there will be no FGTS payout or an additional one month’s salary. In case of termination by mutual agreement, the company must pay half of the notice and 20 percent of the FGTS balance, as opposed to 40 percent when the termination is on the company’s initiative.

The employee will be allowed to withdraw 80 percent of the balance of the FGTS fund, as opposed to 100 percent when the termination is on the company’s initiative, but they are not entitled to unemployment benefits in this type of termination.

Probation Period

The probation period in Brazil for indefinite employees is set to 45 days with the ability to extend to 90 days.

Common Benefits

General

  • Phone allowance – 50 to 100 USD per month
  • Home office allowance – 70 to 120 USD per month
  • Gas/auto allowance – typically 7% of the monthly salary depending on Collective Agreement terms.
  • Gym & Wellness allowance – 100-200 USD per month

VISA

VISA

Any foreigners coming to work in Brazil will need a residence permit (either temporary or permanent) and a work visa (Autorizaçao de Trabalho). The prospective employer in Brazil must apply for a work permit at the Brazilian Ministry of Labor and Employment (Ministério do Trabalho e Emprego) by submitting the work contract and a set of other required documentation.

Once the approval of the application is received, the application for a work permit must be made to the Brazilian embassy or consulate in the future employee’s home country.

For both the Brazilian residence and work permits, the type of work visa required depends on the type of work activity involved in the role in Brazil. Different jobs and qualifications will require different work visas, both temporary and permanent visas.
The most applied-for visas are:

  • Temporary work visa (Visto Temporario V) initially issued for two years (although a second two-year extension may be possible). After completing four years with the same company, should the employer wish, they may support the employee with applying for a permanent work visa.
  • Permanent work visa (Visto Permanente) issued to foreigners who are entitled to permanent residence in Brazil. Usually, this applies to professional researchers or scientists (for activities exceeding two years), investors (provided the investment sum exceeds the reported required amount by the Brazilian Ministry of Labor and Employment).

Remote Working

General

The Brazilian Government passed the working hours legislation applicable to remote workers including those remote workers on a hybrid set up, regular, permanent, or casual basis. This requires employers to implement an electronic timekeeping system (after approval by their relevant union) for employees working remotely.

Legislation and Collective Bargaining Agreements must also apply be applied to remote employees working outside of their employer’s jurisdiction (except if otherwise agreed by the parties).

The working hours legislation includes the following provisions

  •  Employers are not responsible for reimbursing expenses that a remote employee may incur to return to in-person work, when such teleworker chose to work in a location other than the one provided in their written teleworking agreement.
  • Employers are required to give priority to employees with disabilities and those with small children when allocating positions that can be performed remotely.
  • The teleworking regime should be expressly stipulated in the individual employment contracts. The teleworking regime applies to interns and apprentices on the same basis as regular employees, when expressly stipulated in their internship contract, and expressly agreed upon by the intern and the grantor and the educational institution.
  • Food allowances and vouchers paid by the employer to the remote employees must be only used for food purchases in restaurants or other commercial establishments.

VAT

General

The commonly used standard rate of VAT Imposto Sobre Circulação de Mercadorias e Serviços (ICMS) in Brazil is 17.00%; however, these differ slightly regionally.

  • The ICMS rate of 17.00% applies to the following states: Acre, Alagoas, Ceará, Espírito Santo, Goiás, Mato Grosso, Mato Grosso do Sul, Pará, Piauí, Rondônia, Roraima and Santa Catarina.
  • The ICMS rate of 18.00% applies to the following states: Amazonas, Amapá, Bahia, Distrito Federal, Maranhão, Minas Gerais, Paraíba, Paraná, Pernambuco, Rio Grande do Norte, Rio Grande do Sul, São Paulo, Sergipe and Tocantins.
  • The ICMS rate of 19.00% applies in Rio de Janeiro.

Companies looking to hire in Brazil without a foreign subsidiary can check out our full PEO service in Brazil.

Stay up to date on payroll & employment law changes

Version History

March 14, 2022
The National Minimum wage is now 1,212 Brazilian reals.
January 13, 2022
Employer payroll contributions updated
October 11, 2021
Bereavement leave changed to 5 days, was 2 days
January 1, 2021
Minimum wage increase from R $ 1,045 to R $ 1,100
More

Questions & Answers

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Larissa C.
Larissa C.
3 years ago

What is an employee entitled to if he/she resigns?

Erez Greenberg
Erez Greenberg
3 years ago
Reply to  Larissa C.

Employees who resign with the proper notice period are entitled to receive the balance of their wages, a proportional payment for untaken holidays plus one-third of the holiday remuneration, access to their FGTS, and a proportional 13th-month salary (Christmas bonus).

CJ Alves
CJ Alves
2 years ago

When can employees start using their annual leave? Thanks.

Emily Kuhnert
Emily Kuhnert
2 years ago
Reply to  CJ Alves

Hi CJ, Good question. By law, an employee must be employed for 12 continuous months of employment before they are able to begin enjoying their paid vacation.

Leslie Banduch
Leslie Banduch
2 years ago

Are salary increase mandatory in Brazil? If so, what was the increase for 2021?

Emily Kuhnert
Emily Kuhnert
2 years ago
Reply to  Leslie Banduch

Hi Leslie, great question. Annual salary increases are not mandatory by law. However, it is common practice to negotiate for annual salary adjustments under collective bargaining agreements.

Joe
Joe
2 years ago

Is it true that due to COVID-19 the Brazil government has made it where employers can suspend paying their employees? I friend of mine told me that is the case but it seams hard to believe.

Emily Kuhnert
Emily Kuhnert
2 years ago
Reply to  Joe

Hi Joe, thank you for your question. We are not familiar with this, however, last July the government announced measures that would allow an employer to suspend an employment agreement. Thie measure also allowed an employer to reduce working hours and proportionally reduce pay. This could be what your friend was referring to.

Joe
Joe
2 years ago
Reply to  Emily Kuhnert

Thank you for answering, I do have a follow up. My friend that live in Brazil she works for a customer service company. She told me she hasn’t been paid in two and a half months. Her employer keeps telling her hang in their it will be a matter of time before we can pay you.

She feels if she quits she will never get paid so keeps hanging in their. In the last few weeks they upped her hours and she works every day.

She doesn’t know who to complain to. Is there a government service she can call? Is there any legal firms in the city Natal Brazil that can help her? She has no money but in the US they’re law firms that help the poor. These law firms get paid from wealth philanthropist.

Leilane
Leilane
2 years ago
Reply to  Joe

I am brazilian. It is true. Employers can suspend the contract, this means to suspend the payment AND the work. This NOT means that people will work for free.

Joe
Joe
2 years ago

Thank you for answering, I do have a follow up. My friend that live in Brazil she works for a customer service company. She told me she hasn’t been paid in two and a half months. Her employer keeps telling her hang in their it will be a matter of time before we can pay you. 
She feels if she quits she will never get paid so keeps hanging in their. In the last few weeks they upped her hours and she works every day. 
She doesn’t know who to complain to. Is there a government service she can call? Is there any legal firms in the city Natal Brazil that can help her? She has no money but in the US they’re law firms that help the poor. These law firms get paid from wealth philanthropist.

Emily Kuhnert
Emily Kuhnert
2 years ago
Reply to  Joe

Hey Joe, it is best for your friend to seek out legal counsel, this is not something that we are able to advise on.

Joe
Joe
2 years ago
Reply to  Emily Kuhnert

Thanks for answering me. She says she can not afford Legal counsel do you know of a law firm in the Natal area that helps the poor?

Joe
Joe
2 years ago
Reply to  Emily Kuhnert

what about going to the Police?

Emily Kuhnert
Emily Kuhnert
2 years ago
Reply to  Joe

She can try making a formal complaint here https://www.gov.br/pt-br/servicos/realizar-denuncia-trabalhista. I would also suggest that she do some research in finding organizations that would be able to help her.

Paul
Paul
2 years ago

Are employers obligated to cover employee transportation costs?

Alex Margolin
Alex Margolin
2 years ago
Reply to  Paul

Hi Paul. Employers must either provide transportation to and from work each day or pay any employees’ transportation costs above 6% of the employee’s gross salary.

Sarah Smogoleski
Sarah Smogoleski
1 year ago

How common is it for employers in Brazil to offer supplemental medical coverage on top of SUS? Does it depend on the industry, employer size, etc?

Emily Kuhnert
Emily Kuhnert
1 year ago

Hi Sarah, thank you for your question. Private health insurance is one of the most common non-mandatory benefits that are offered to employees in Brazil and the amount usually will vary based on the employee’s role and responsibilities.

Joao
Joao
1 year ago

What/Who pays the government?

Erez Greenberg
Erez Greenberg
1 year ago
Reply to  Joao

Can you please elaborate on what specific payment to the government you are referring to?

Joao
Joao
1 year ago
Reply to  Erez Greenberg

Who pays the salaries of the people working for the government?
I thought the 1st question was clear enough

Erez Greenberg
Erez Greenberg
1 year ago
Reply to  Joao

The government pays the salaries of government workers.

Gustavo
Gustavo
1 year ago

How exactly is the payment done to employees in Brazil? For example, if an employer from outside is hiring an employee in Brazil, what are the options for this employee? Does he needs to start a company (have his own CNPJ) or does he get a choice to be hired as CLT?
I understand that if the employee have it’s own CNPJ, then all the taxes related to “Employer” category are not applicable, is that correct?
I’m asking this because I live in Brazil and I have a proposal from a US company that uses your platform.
Thank you!

Erez Greenberg
Erez Greenberg
1 year ago
Reply to  Gustavo

It really depends on the company and the goal of the setup. You could choose to create your own local entity and hire workers directly, or you could hire independent contractors (where compliant), or you can use the EOR model. I recommend reviewing the Papaya Website https://www.papayaglobal.com/pricing/ to obtain more details regarding these options.

Janet
Janet
1 year ago

When discussing salary in Brazil is it usually inclusive or exclusive of the 13th month bonus?

Erez Greenberg
Erez Greenberg
1 year ago
Reply to  Janet

The 13-month bonus is made in two installments and appears separately on a payslip. The first installment will appear on a payslip in November (with no INSS deduction from or withholding taxation due), and the second installment will show on the December payslip (INSS contribution and withholding tax are applied to this second installment). You can see an example of a Brazil payslip here.

Janet
Janet
1 year ago
Reply to  Erez Greenberg

Thank you, Erez. Sorry my question wasn’t very clear. I was wondering more so whether we should consider it as part of the salary or as a bonus. We have employees globally and only those in countries with statutory bonuses receive such bonuses. When comparing all global employees’ salaries to build an equitable compensation structure across countries, we’re not sure whether statutory bonuses should just be counted as salaries?

Francisco James
Francisco James
1 year ago

are all restaurants registered with ftgs in Brazil with basic benefits??

Erez Greenberg
Erez Greenberg
1 year ago

Could you please share more context, FTGS usually refers to severance fund allocation in Brazil.

Niki
Niki
1 year ago

Can you give someone a promotion in brazil without increasing their salary immediately?

Erez Greenberg
Erez Greenberg
1 year ago
Reply to  Niki

Yes, since it depends on the effective date of the promotion and the cut-off dates to administer the promotion increase in payroll.

John
John
1 year ago

If someone is dismissed after 3-6 months are they still entitled to 30 days notice, severance pay and 13th salary?

Erez Greenberg
Erez Greenberg
1 year ago
Reply to  John

Brazil generally stipulates notice periods within the employment contract/collective agreement based on the reason for termination and the employee’s length of service. The minimum notice period for both employers and employees is 30 days, and the amount of notice increases with the length of employment. Severance pay is mandatory, but the amount differs based on the type of termination, i.e., termination by the employee, termination by mutual agreement, without cause, and with a cause in an indefinite term agreement and fixed-term agreement.

Those who have worked for part of the year will receive a 13th payment proportional to the period worked.

Liat
Liat
7 months ago

Hi, if an employee as resigned, and the 10 day after his last day was Saturday, and I missed to pay him on Friday, is it possible to pay in Monday or I need to pay the extra salary?

Lilian Pardo
Lilian Pardo
3 months ago

is the Advance payroll mandatory or can employee opt out?

Janneke
Janneke
3 months ago

Is it complex to move payroll providers in Brazil during the year?

Samantha
Samantha
2 months ago

If an employer provides employees gift cards as an award, is this taxable to the employee through payroll?

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Payroll and Benefits Guide
in Brazil

What’s covered in this guide:

  • Employer/employee contributions
  • Minimum wage
  • Working hours
  • Visa requirements

And more...

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All questions are answered by our in-house compliance department working in conjunction with our local in-country partner for this specific country

Public Holidays Calendar

Brazil 2023
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CSV
PDF
ICS
Day Date Holiday Notes
Sunday Jan-1 Ano Novo
Wednesday Jan-25 Aniversario de Cidade
Monday Feb-20 Carnival Non Mandatory but common practice to give as a day off.
Tuesday Feb-21 Carnival Non Mandatory but common practice to give as a day off.
Wednesday Feb-22 Carnival Non Mandatory but common practice to give as a half day off in the morning.
Friday Apr-7 Sexta-Feria Santa
Friday Apr-21 Dia de Tiradentes
Monday May-1 Dia do Trabalho
Thursday Jun-8 Corpues Christi Optional holiday (ponto facultativos)
Sunday Jul-9 Revolução Constitucionalista
Thursday Sep-7 Independência do Brasil
Thursday Oct-12 Nossa Senhora Aparecida
Thursday Nov-2 Dia de Finados
Wednesday Nov-15 Proclamação da República
Monday Nov-20 Dia da Consciência Negra observed in Rio de Janeiro only
Monday Dec-25 Natal