Hiring in Brazil? A severance fund sits on every payslip.

Brazil is Latin America’s largest economy and one of the region’s most attractive places to build a team, but getting your employment model wrong still carries real cost in time, money, and compliance. We help you choose the right way to hire, place you with the right partner, and stay alongside you for the life of the relationship.

  • Independent advice
  • Vetted partners
  • On your side at renewal

A great market to hire in. A severance-fund-and-13th-salary system underneath.

Brazil is Latin America’s largest economy and the world’s ninth-largest, the leading global exporter of soy, coffee, and iron ore, with a genuine industrial and aerospace base through Embraer and a workforce of more than 100 million, but employer cost does not run through one payroll tax line: it splits across INSS social security, a mandatory 8% FGTS severance deposit paid into an individual account for every employee, and a 13th salary paid in two instalments each year, all layered under the CLT.

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Latin America’s largest economy, with a severance fund on every payslip

World’s leading exporter of soy, coffee, sugar, beef, and iron ore, with a genuine industrial and aerospace base through Embraer, but Brazil has no single combined payroll tax: employer cost runs through INSS, a mandatory 8% FGTS deposit into an individual account per employee, and a 13th salary paid in two instalments, not one flat number.

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FGTS adds a severance fund to every payslip

The CLT (Consolidacao das Leis do Trabalho, Decree-Law 5,452/1943), reinforced by Article 7 of the 1988 Constitution and the 2017 Labour Reform, plus mandatory enrolment in INSS social security with four progressive employee contribution bands and a separate FGTS severance fund on every payslip, mean your employment structure has to be chosen with care.

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Independent expert advice

Not sure whether you need EOR, payroll, or your own Ltda.? We map your headcount, timeline, and risk profile and give you a clear recommendation, not a product pitch.

Four ways to hire in Brazil. Pick once, pick right.

Most businesses arrive having already decided, and often decided too quickly. Here is the honest version of each route. When one fits, the detailed guide is one click away.

Employer of Record

An EOR partner becomes the legal employer of your Brazilian staff, handling the CLT-compliant contract, payroll, INSS withholdings, the mandatory FGTS deposit, and 13th-salary payments, while you direct the work. Operational in days, no entity needed. Best for testing the market or hiring a small team.

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Global Payroll

For when you already have a Brazilian entity, or want to consolidate payroll across several countries. You stay the legal employer; a specialist partner runs the monthly INSS, FGTS, and income-tax calculations correctly, plus the 13th-salary instalments.

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Entity Formation (Ltda.)

Your own Brazilian company, most commonly a Sociedade Limitada (Ltda.), formed by articles of association filed with the state Junta Comercial and a CNPJ from Receita Federal. Full control and a local presence, but you carry registration, tax-regime choice, and ongoing filings. Right when the headcount and permanence justify it.

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PEO Services

A co-employment model alongside your own Brazilian entity. True PEO co-employment is far less established in Brazil than in the US, so for most companies EOR or managed payroll is the better fit. We will tell you honestly which one your situation calls for.

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Brazil at a glance

Currency

Brazilian Real (BRL). Salaries are set and paid in BRL; if your budget lives in EUR or USD, exchange movement quietly changes your real cost.

Minimum wage (2026)

R$1,621 per month for 2026, set by Decreto 12.797/2025, one national floor. Some states set their own higher minimum, and collective bargaining can set higher industry minimums on top.

Employer costs

Employer INSS runs 20% of payroll plus RAT work-accident insurance (1% to 3%) and Sistema S contributions (0.2% to 5.8%), before the separate mandatory FGTS deposit of 8% on every payslip, paid into an individual account per employee, is added on top.

Leave & Notice

Brazil is not at-will: termination without cause is lawful but triggers a 40% penalty on the employee’s full FGTS balance, plus notice of 30 days rising by 3 days per year of service to a cap of 90 days (Lei 12.506/2011). Annual leave is 30 calendar days after 12 months of service (CLT Art. 130), plus a mandatory vacation bonus of one third of monthly salary, on top of around 12 to 13 national public holidays in 2026.

Hiring in Brazil: quick answers

The questions we are asked most about hiring in Brazil.

What is the fastest way to hire someone in Brazil?

An Employer of Record. Your hire can start in days, with a compliant CLT employment contract from day one and no entity to set up. It is the lowest-risk way to test the market or place a small team.

Do I need a Brazilian entity to hire?

No. With an EOR you can employ people in Brazil without your own company. You only need to incorporate when you are committing to a permanent, larger presence, and we will tell you honestly when that point arrives.

The CLT’s protective employment framework, INSS social security with four progressive contribution bands, a mandatory 8% FGTS severance deposit on every payslip, and a 13th salary paid in two annual instalments. None of it is a problem when a partner who already knows the rules is running it for you.

We are independent: we assess what you actually need, place you with the right vetted partner, secure pricing you will not get going direct, and stay on your side to escalate or renegotiate. You get advice, not a product pitch.

Let’s map your Brazil hire.

Tell us who you want to hire and where you are headed in Brazil. One conversation maps your options, flags the risks, and usually gets you to a better answer, and better pricing, than going direct. No pitch.

Tax and labour data verified July 2026 (Receita Federal, INSS/Ministerio da Previdencia, gov.br). Figures change; we confirm the current position when we scope your hire.