An Employer of Record (EOR) acts as the legal employer for workers, handling HR responsibilities like payroll, taxes, and compliance, while the company directs the employees’ day-to-day tasks. This setup allows businesses to hire globally without establishing a local entity.
Hiring workers from Brazil offers benefits due to their high level of education, technical skills, and diversity. Brazil is home to a young, diverse, and highly skilled workforce, particularly in areas like technology and innovation. The country is recognized for its strong talent pool, especially in engineering, IT, and customer service.
Employment in Brazil has shown positive trends in recent years. Brazil is the world’s 9th largest economy and the most influential country in Latin America. With 50% of the population under 20, it offers a large pool of young, talented professionals. This presents significant opportunities for businesses looking to expand into the Brazilian market or tap into its skilled workforce.
To use an EOR in Brazil, there are 6 basic steps to follow to ensure proper setup:
- Find talent to hire in Brazil
- Compare using an EOR to setting up a legal entity in Brazil
- Get the information needed from your talent
- Choose an EOR provider with expertise in Brazil
- Communicate your hiring needs to the EOR
- Have the EOR set up the contracts and hiring procedure
An EOR manages payroll, taxes, and benefits administration, ensuring compliance with local laws and regulations, thus simplifying the employment process for companies.
Different labor laws in Brazil, such as those governing work hours, termination processes, and mandatory employee benefits, must be considered when hiring remotely. The hiring process in Brazil involves identifying talent, ensuring compliance with local employment laws, and executing contracts, typically facilitated by an EOR for companies without a local presence.
1. Find talent to hire in Brazil
To find talent to hire in Brazil, businesses should explore a variety of channels, emphasizing both local and global platforms. Some popular job boards and recruitment channels in Brazil include:
- Indeed Brazil
- Buscojobs
- Catho
- Vagas
- Trabalhabrasil
LinkedIn also has a strong presence in Brazil and is crucial for networking and headhunting, particularly for professional and managerial roles.
Partnering with career centers at top Brazilian universities for entry-level positions or internships can be beneficial. Additionally, considering local professional associations and industry-specific job boards can be advantageous, especially for roles in sectors like technology and engineering.
When searching for talent, consider Brazil’s strong sectors, such as technology, manufacturing, and innovation. Many Brazilian professionals are highly skilled and adaptable, which can benefit international businesses.
2. Compare using an EOR to setting up a legal entity in Brazil
When hiring employees in Brazil, you need to weigh the options of using an Employer of Record against setting up your legal entity. An Employer of Record offers a quicker, less complex route to hiring local staff, bypassing the need for a formal company presence. This approach suits companies looking to test the Brazilian market or expand quickly without significant upfront investment.
An EOR manages all local employment laws, taxes, and compliance issues, assuming responsibility for hired employees. This setup allows companies to start operations in weeks, compared to the months required to establish a legal entity.
Setting up a legal entity in Brazil, on the other hand, is a complex and time-consuming process. It can take around 60 to 90 days to complete, excluding the time to open a bank account. This process involves navigating intricate local labor laws and regulations, which can be challenging for foreign companies.
In comparison, using an EOR is generally less expensive. It involves less risk, making it a suitable option for small to medium-sized businesses or those in the initial stages of market exploration. It eliminates the need for a local expert or dedicated legal and tax teams, as the EOR handles these aspects.
Comparison of Employer of Record (EOR) vs. Setting Up a Legal Entity in Brazil
| Factor | Employer of Record (EOR) | Setting Up Legal Entity in Brazil |
|---|---|---|
| Setup Time | Weeks | 60 to 90 days (excluding bank account setup) |
| Initial Cost | Low | High |
| Ongoing Cost | Moderate (EOR fees + employee costs) | Variable (operational costs, compliance, etc.) |
| Complexity | Low (EOR handles most administrative tasks) | High (complex registration processes) |
| Control over Operations | Limited (company directs daily work, EOR handles employment) | Full (complete control over all aspects of business) |
| Compliance Management | Handled by EOR (payroll, taxes, social security) | Company Responsibility (requires local expertise) |
| Language Barrier | Managed by EOR | Company must handle (documents in Portuguese) |
| Scalability | Highly Flexible (easy to add or remove employees) | Less Flexible (changes may require legal procedures) |
| Local Expertise Required | Minimal (EOR provides guidance) | Extensive (need for local legal and tax advisors) |
| Suitable for | Market entry, testing Brazilian market, hiring < 10 employees | Long-term presence, hiring > 10 employees, full operations |
| Risk | Lower (EOR assumes employer liabilities) | Higher (company bears all legal and financial risks) |
| Customization of Employment Terms | Limited (must adhere to EOR’s policies) | Extensive (can create company-specific policies) |
| Handling of Mandatory Benefits | Managed by EOR (13th salary, vacation bonus, etc.) | Company must navigate complex benefit system |
3. Get the information needed from your talent
You’ll need their personal information, employment contract details, and tax-related information to hire employees in Brazil. Remember, it’s important to collect this data before the employee starts working.
Typically, you’ll need the following essential information:
- Employee’s full name
- Address
- Date of birth
- CPF (Cadastro de Pessoas Físicas) – Brazilian individual taxpayer registry identification
- Bank account details for salary payments
- Educational qualifications and work history
Additionally, you’ll need to provide a comprehensive job description, including title, duties, and place of work. In Brazil, written employment contracts are mandatory for all work arrangements. These contracts must be in Portuguese and include details such as compensation, benefits, responsibilities, and rules around termination.
4. Choose an EOR provider with expertise in Brazil
When choosing an EOR provider to work with in Brazil, selecting one with deep expertise in the Brazilian market and a strong understanding of local labor laws is crucial to ensure compliance and smooth business operations. Consider the following factors:
- Experience managing employee onboarding, payroll, and legal compliance in Brazil
- Proven track record of working successfully with companies similar to yours
- Range of services offered, including visa and work permit support, benefits management, and payroll processing
- Technology platform and data security measures
- Pricing structure and transparency
- Commitment to staying up-to-date with Brazilian employment laws
Choose an EOR provider demonstrating a strong understanding of Brazilian employment practices, including the 13th salary, vacation bonuses, and termination procedures. Ensure they can provide comprehensive support for all aspects of employment in Brazil.
What are the best EOR providers to use in Brazil?
| EOR Provider | Why It’s a Good Fit for Brazil |
|---|---|
| Deel | – Extensive global coverage including Brazil – Quick onboarding process, typically within three business days – Comprehensive compliance management including adherence to Brazilian labor laws and collective bargaining agreements |
| Remote | – Strong focus on compliance with Brazilian employment laws – Offers a wide range of benefits management, crucial for meeting Brazil’s statutory employee benefits requirements – Provides robust data security and IP protection |
| Remofirst | – Cost-effective pricing, starting from $199 per employee/month – Provides efficient payroll and tax compliance services tailored to Brazilian regulations – Offers 24/7 customer support to address time zone differences and urgent needs |
| Multiplier | – Covers 150+ countries, including Brazil – Offers comprehensive benefits management, essential for Brazil’s complex employee benefits system – Facilitates quick market entry and scalability in Brazil |
| Oyster HR | – Supports hiring in 180+ countries, including Brazil – Provides IP rights protection, crucial for businesses in sectors like manufacturing and pharmaceuticals – Offers a cost-effective solution for hiring contractors and employees in Brazil |
5. Communicate your hiring needs to the EOR
Communicating your hiring needs to the EOR to ensure the process aligns with company goals and legal requirements is important. Providing a detailed job description, including title, responsibilities, required qualifications, and skills, is key.
Specify the job’s expected start date, location, and whether it’s remote or onsite. Outline the proposed salary, bonuses or commissions, and other compensation benefits. Clarify the contract type (full-time, part-time, or fixed-term) and detail the working hours, including any flexibility or shift requirements.
Discuss the company culture, growth plans, and how the position fits into future expansion. By accurately representing these aspects, the EOR can find the right talent and ensure legal and administrative compliance.
6. Have the EOR set up the contracts and hiring procedure
Once you have chosen which provider to work with and communicated your hiring needs, the EOR will set up the contracts and hiring procedure, ensuring compliance with local labor laws and employment practices.
The EOR drafts employment contracts that adhere to Brazilian labor laws, including specific terms regarding job details, working hours, and termination procedures. They’ll manage the necessary documentation for tax, social security, and payroll setup, adhering to mandatory withholdings and reporting requirements.
In Brazil, employers are required to provide written employment contracts in Portuguese. The EOR will ensure this requirement is met, including all necessary details such as compensation, benefits, responsibilities, and termination rules.
The EOR will also register employment with relevant Brazilian authorities, assist in obtaining necessary work visas for foreign employees, and manage the onboarding process in accordance with Brazilian employment laws.
What help does an EOR provide in Brazilian payroll, taxes, and benefits administration?
An EOR in Brazil provides comprehensive support in managing payroll, taxes, and benefits administration, ensuring compliance with complex local laws. This includes:
- Calculating and processing employee salaries
- Withholding and paying income tax (capped at 27.5%)
- Managing social security contributions (capped at 11% for employees)
- Handling employer payroll taxes (capped at 36.8%)
- Administering the mandatory 13th-month salary
- Managing vacation pay and bonuses
- Ensuring compliance with FGTS (Severance Indemnity Fund) contributions
- Providing pay slips and annual payment summaries
The EOR will manage the monthly or bi-weekly payroll cycle, ensuring timely and accurate payments. They will also handle the 13th salary, a mandatory bonus in Brazil that provides employees with an extra month’s pay annually.
Regarding benefits, the EOR will handle mandatory benefits such as 30 calendar days of paid annual leave with a third of their monthly salary as a vacation allowance. They will also manage any additional benefits you offer, which can be important in Brazil for attracting and retaining top talent.
What labor laws do you need to consider when hiring in Brazil?
| Law / Regulation | Key Points |
|---|---|
| Employment Contracts | Both verbal and written contracts are legally valid. Written contracts in Portuguese are strongly recommended. Must include compensation, benefits, responsibilities, and termination rules. |
| Working Hours | Standard work week is 44 hours, typically over six days. Regular workday is 8 hours with a one-hour lunch break. Overtime paid at 150% of regular rate. Night work (10 PM – 5 AM) paid at premium rate. |
| Minimum Wage | National minimum wage adjusted annually. Some states and professions may have higher minimum wages. |
| Paid Time Off | 30 calendar days of paid annual leave after one year of employment. Vacation bonus equal to one-third of monthly salary. |
| 13th Salary | Mandatory 13th-month salary. Typically paid in two installments (November and December). |
| Maternity and Paternity Leave | 120 days paid maternity leave (can be extended to 180 days in some cases). 5 days paid paternity leave. |
| Termination | At-will employment, but with strict rules. 30 days’ notice required for employees with over one year of service. Severance pay typically one month’s salary per year of service. |
| FGTS (Severance Indemnity Fund) | Employers contribute 8% of each employee’s salary to FGTS. 40% fine of total FGTS deposits if termination without just cause. |
| Social Security | Both employers and employees contribute. Employer’s contribution significantly higher than employee’s. |
When hiring in Brazil, several key labor laws must be considered:
Employment Contracts
In Brazil, both verbal and written contracts are legally valid. However, it’s strongly recommended that written contracts be provided in Portuguese. These contracts must include compensation, benefits, responsibilities, and termination rules.
Working Hours
The standard work week in Brazil is 44 hours, typically six days. Each day is generally 8 hours long, with a one-hour lunch break. There are strict regulations regarding overtime:
- Overtime is paid at 150% of the regular rate
- Night work (between 10 PM and 5 AM) is paid at a premium rate
Minimum Wage
Brazil has a national minimum wage that is adjusted annually. However, some states and professional categories may have higher minimum wages.
Paid Time Off
After one year of employment, employees are entitled to 30 calendar days of paid annual leave. They also receive a vacation bonus equal to one-third of their monthly salary.
13th Salary
Brazilian employees are entitled to a 13th-month salary, which is typically paid in two installments (November and December).
Maternity and Paternity Leave
Female employees are entitled to 120 days of paid maternity leave. This can be extended to 180 days in some cases. Fathers are entitled to 5 days of paid paternity leave.
Termination
Brazil practices at-will employment, but there are strict rules around termination. Employers must provide 30 days’ notice for employees who have been with the company for over a year. Severance pay is typically equal to one month’s salary for each year of service.
FGTS (Severance Indemnity Fund)
Employers must contribute 8% of each employee’s salary to the FGTS. In case of termination without just cause, the employer must pay a fine of 40% of the total amount deposited in the employee’s FGTS account.
Social Security
Both employers and employees contribute to social security, but the employer’s contribution is significantly higher than the employee’s.
Understanding and complying with these laws is crucial for any company hiring in Brazil. The complexity of these regulations can make compliance challenging for foreign companies. This is where an Employer of Record (EOR) can provide significant value, offering expertise in navigating these laws and ensuring full compliance with Brazilian employment regulations.
How does the hiring process work in Brazil?
The hiring process in Brazil typically involves the following steps:
- Job Posting and Recruitment: Companies advertise positions through various channels, including online job boards, social media, and recruitment agencies.
- Application Review: HR teams or recruiters review applications and resumes to shortlist candidates.
- Initial Screening: Often involves a phone or video interview to assess basic qualifications and cultural fit.
- In-depth Interviews: Qualified candidates are invited for more comprehensive interviews, which may include multiple rounds with different team members.
- Skills Assessment: Candidates might be asked to complete tests or practical assignments depending on the role.
- Reference Checks: Employers often contact previous employers or provide references.
- Job Offer: A formal job offer is extended, usually in writing.
- Contract Negotiation: The terms of employment are discussed and finalized.
- Contract Signing: Both parties sign the employment contract.
- Registration and Onboarding: The new employee is registered with relevant authorities and begins onboarding.
When hiring through an EOR in Brazil, many of these steps are managed or facilitated by the EOR provider, ensuring compliance with local regulations throughout the process.
Is Brazil a relatively easy country to hire employees remotely through an EOR?
Brazil is considered a moderately complex country for hiring employees remotely through an Employer of Record. While it’s not the most challenging market, several factors contribute to its complexity:
Pros
Cons
While Brazil is not the easiest country for remote hiring, with the right EOR partner, companies can successfully navigate the complexities of employing workers there. The key is working with an EOR with deep local expertise and a strong track record of compliance with Brazilian labor laws.
In conclusion, using an Employer of Record service in Brazil can significantly simplify hiring and managing employees in this dynamic market. By handling complex compliance issues, payroll, and benefits administration, an EOR allows you to focus on growing your business while minimizing risks associated with international expansion. With the right partner and a clear understanding of the local landscape, companies can effectively tap into Brazil’s talented workforce and expand their global footprint.
