Employer of record in Brazil: costs, rules and how to hire

The collective agreement, not your template, sets the wage floor, benefits, adjustments, schedules and overtime treatment for a Brazilian role. A foreign contract cannot waive mandatory rights, and the provider's service terms do not replace the employee's applicable labour agreement. So the first question on any draft contract is which occupational category and collective agreement the hire falls under.

Agree clear employment terms

Record the employer, duties, start date, workplace, contract type, pay, hours, benefits, leave and exit process in writing, in language the employee understands, and identify the job classification and collective agreement. General CLT employment may be verbal or written, but remote and intermittent work carry specific writing requirements. The CLT permits collective negotiation on specified subjects while protecting rights that cannot be removed, so have the EOR explain the agreement, occupational category, territorial coverage and renewal dates used for the hire.

Choose the contract type

The experience contract is the Brazilian equivalent of probation and it is not free. Its total duration cannot exceed 90 days including any extension, more than one renewal normally makes it indefinite, and the employee still receives wages, registration, contributions and applicable benefits throughout, with early termination able to create compensation costs.

A standard fixed-term contract is otherwise permitted for work or business activity of a temporary nature, with a general maximum of two years and more than one renewal normally making it indefinite. Intermittent work and temporary agency work are separate arrangements rather than a universal exemption from ordinary employment rights.

Part-time work runs up to 30 hours a week without extra weekly hours, or up to 26 hours with up to six extra hours, with pay proportionate to the comparable full-time role, a statutory extra-hour premium of 50% and annual leave following the general rules. An intermittent contract alternates work and inactivity, must be written, cannot pay below the statutory minimum or the applicable same-role rate, and carries wages, proportional leave plus one-third, proportional thirteenth salary, weekly rest and legal additions on each work period, with social security and FGTS still applying.

Check contractor status

The CLT defines an employee through regular paid personal work under an employer's direction, and it recognises lawful independent services too, so assess the actual autonomy, supervision, duties and working arrangements. A company registration or invoice alone does not settle a classification dispute, and current court guidance should be checked before treating an employee role as independent contracting.

Put remote-work and intellectual-property terms in writing

Remote work must be expressly recorded in the employment contract, with written terms allocating equipment, maintenance, the home-office setup and reimbursement of employee expenses; the CLT sets no universal fixed home-office allowance. Cover working hours, communication, health instructions and the agreed location, and note that an employer-ordered return to onsite work normally needs a contractual amendment and at least a 15-day transition.

Ownership rules differ by type of work: qualifying employment software and employment inventions can belong to the employer, while unrelated employee creations and mixed-resource inventions are treated differently. An EOR arrangement should document any necessary transfer or licence to your business, including scope, territory and permitted use. Copyright assignments require writing, and the author's protected moral rights cannot be waived.

Misclassification risk, and why the label does not hold

Brazil decides this on the facts and has a provision that exists specifically to defeat paperwork. An employer is the undertaking that, bearing the risks of the economic activity, engages, pays and directs the personal provision of service, and an employee is any natural person who provides services of a non-occasional nature to an employer, under that employer's dependence and for a wage. Those two definitions, not the contract's title, decide the relationship. Source: Consolidation of Labour Laws articles 2 and 3, planalto.gov.br, checked 18 September 2026.

Then the provision that matters most for anyone planning around a structure: acts performed with the aim of distorting, preventing or defrauding the application of the Consolidation's provisions are null and void as a matter of law. Source: Consolidation of Labour Laws article 9, planalto.gov.br, checked 18 September 2026.

Our own page already says the honest thing about how the test is applied, which is that a company registration or an invoice alone does not settle a classification dispute and that current court guidance should be checked before treating an employee role as independent contracting. What a hirer does about it: assess the autonomy, supervision and duties as they will actually be, keep the direction of the work with whoever the contract says employs the person, and where you need someone working inside your team under your direction, employ them.

Five things account for most of the surprises on a Brazilian hire, and three of them are costs that never appear in a salary line. Ask the provider to identify the rule that applies to the actual employer, employee and start date rather than the national default.

Check these points before signing

Each row below is a question with a right answer for your specific hire, not a general one.

Keep survey earnings separate from a salary quote, and future changes separate from current payroll.

A BRL 10,000 salary plus 20% employer social security and 8% FGTS reaches BRL 12,800 before anything else is added. That is the fastest way to see why a Brazilian budget cannot be built from salary alone. What decides your actual rate is the employing entity's regime and risk classification, so ask for its calculation rather than applying a universal payroll percentage.

Build the budget above gross salary

The general employer social security contribution is 20% of covered payroll under Law 8,212, and the employee contribution ceiling does not cap it. Add the applicable occupational-risk contribution, third-party charges, FGTS, benefits and service fees; special tax regimes, sector rules and payroll-relief arrangements can change the result.

Example: BRL 10,000 monthly salary

In the standard employer regime, BRL 10,000 plus 20% employer social security and 8% FGTS gives a subtotal of BRL 12,800, excluding RAT/FAP, third-party charges, the thirteenth salary and its charges, the vacation supplement, benefits, exit costs and EOR fees. It is a partial budget example, not an all-in quote or a take-home calculation.

Understand social security and FGTS

From January 2026, employee INSS rates are 7.5% up to BRL 1,621, 9% on the next band through BRL 2,902.84, 12% through BRL 4,354.27 and 14% through BRL 8,475.55, applied band by band rather than at the top rate on the whole salary. Concurrent jobs count together up to the contribution ceiling, and thirteenth-salary contributions are calculated separately from ordinary monthly pay.

The ordinary RAT rate is 1%, 2% or 3% by risk classification, and the establishment's annual FAP multiplier of 0.5 to 2 changes it, with additional rules for work qualifying for special retirement. Do not assume a flat 3% accident charge; ask for the entity's classification and current FAP.

FGTS is usually 8% of covered remuneration including the thirteenth salary, paid by the employer into the employee's linked account rather than deducted from wages, with a separate 2% rate for apprentices. Ordinary monthly FGTS Digital payment is due by the 20th of the following month, brought forward for relevant non-banking days, and termination deposits have their own deadline.

Calculate income tax using the 2026 rules

The 2026 monthly IRRF table runs from 0% up to BRL 2,428.80 through 7.5%, 15%, 22.5% and 27.5% across successive bands, applied after the appropriate payroll deductions.

From January 2026 an additional reduction can eliminate monthly income tax on taxable monthly income up to BRL 5,000, tapering between BRL 5,000.01 and BRL 7,350 and disappearing above that. It operates after the ordinary table rather than replacing the first band, and the relief thresholds use taxable income before the payroll deductions used to calculate the tax base. Multiple income sources may require an annual adjustment, so ask for a calculation on the employee's actual circumstances.

Keep payroll records clear

The employer must register employees and record employment, pay, leave and other relevant events, keeping itemised payslips, bank-payment evidence, eSocial submissions and FGTS records. Deductions require a lawful basis, and a service fee charged to the client is not deductible from the employee's salary.

Check immigration before work begins

For a foreign national, first check whether existing status permits the proposed work. Employer-based residence under Resolution 02/2017 requires the appropriate employment contract and evidence matching qualifications and experience to the role, can grant up to two years subject to its conditions, and is applied for through MigranteWeb; approval, consular steps and registration are case-specific, so an EOR cannot guarantee an immediate start.

Resolution 45/2021 provides a route for remote work for an overseas employer and expressly excludes work for an employer in Brazil, with initial residence up to a year, renewable, and evidence including the foreign work relationship and qualifying income of at least USD 1,500 monthly or funds of at least USD 18,000. It should not be assumed to authorise employment by a Brazilian EOR.

The national minimum from 1 January 2026 is BRL 1,621 a month, with Decree 12,797 setting equivalent daily and hourly amounts of BRL 54.04 and BRL 7.37. It is a floor and rarely the answer, because a higher state, occupational or collective-agreement minimum may apply. What decides the offer is that applicable floor first, then the market for the role.

Set pay using the applicable minimum

These are Brazilian-real amounts, not US-dollar salary figures, which matters when a global salary band is being converted.

Use earnings statistics as context

The Ministry of Finance's July 2026 PNAD Contínua bulletin, using IBGE data, reports average usual real earnings from all jobs of BRL 3,762 for the May to July rolling quarter. That is a broad survey measure across employed people, including arrangements beyond salaried employment, so it is not a gross salary quote, an employee-only average or a median.

A software engineer, a sales representative and an operations assistant need different offers, so compare occupation, experience, location and working hours rather than anchoring on the national survey.

Agree payday and the thirteenth salary

The CLT normally limits the salary period to one month, with exceptions for items such as commissions and bonuses, and monthly-paid employees must be paid by the fifth working day of the following month. Agree the payday and payroll cutoff, confirm the applicable working-day calendar and any earlier collective deadline, and use local payroll in Brazilian reais with a proper payment record.

The thirteenth salary accrues at one-twelfth of the relevant December remuneration for each qualifying month, with at least 15 days of service counting as a month. The advance is paid between February and November and the balance by 20 December, and an employee who asks in January can take the advance with vacation pay. Variable pay and part-year service need the correct calculation, and there is no standard third instalment in January.

Thirty calendar days of leave, paid at normal remuneration plus a one-third supplement, is the Brazilian benefit that reshapes a budget built elsewhere. It has its own timing rules too: written notice at least 30 days ahead, payment by two days before leave starts, and no start in the two days before a public holiday or weekly rest day. Those deadlines are where foreign employers trip, not the entitlement itself.

Plan annual leave and vacation pay

After each 12-month accrual period the ordinary CLT entitlement is 30 calendar days where unjustified absences do not exceed five, with a statutory scale reducing leave for higher numbers and separate protection for justified absences. Leave should be taken within the following 12 months and, with employee agreement, can be split into up to three periods: one of at least 14 days and the others at least five days each. The employee may request conversion of one-third of the entitlement into cash under the statutory timing rules, but the employer cannot replace all leave with money.

Use the local holiday calendar

Nine fixed national holidays are set by federal law: 1 January, 21 April, 1 May, 7 September, 12 October, 2 November, 15 November, 20 November and 25 December, with state and municipal laws adding dates and religious holidays, including Good Friday, needing the local-law check under Law 9,093. Federal public-service optional days do not automatically give private employees paid time off for Carnival or Corpus Christi.

Where lawful work on a civil or religious public holiday cannot be suspended, Law 605 generally requires double remuneration unless another day off is provided, and permission to operate, collective agreements, special schedules and local rules all still need checking.

Follow the sick-leave and maternity process

For an employee in the general system the employer pays full salary for the first 15 consecutive days of qualifying sickness absence, with INSS temporary-incapacity benefit available from day 16 subject to medical assessment, insurance status and the applicable conditions. That is a social security benefit rather than indefinite employer-paid salary, and recurring absence, occupational injury and any collective top-up need separate checks.

The general maternity entitlement is 120 days without loss of protected employment and pay rights, starting within the 28 days before birth or at birth with the required medical notice, and adoption and judicial custody for adoption carry statutory protection. For an ordinary company employee the employer normally pays the benefit and offsets it through social security.

Under the 2025 amendment, hospitalisation of mother or newborn for more than two weeks and linked to childbirth can extend maternity leave up to 120 days after discharge, deducting leave taken before birth, and Empresa Cidadã can add 60 days where the employer participates; specific protections apply for children with congenital Zika-related disabilities. Not every employee is automatically entitled to 180 days.

Separate current and future paternity leave

Paternity leave changes three times over the next few years, so the entitlement depends on the birth date rather than on policy.

At the September 2026 review date, CLT article 473 provides five consecutive days for birth, adoption or shared custody, qualifying Empresa Cidadã employees can receive an additional 15 days under the programme's conditions, and the CLT provides 20 days for the specified congenital Zika-related disability case. Law 15,371/2026 takes effect on 1 January 2027 and also introduces a paternity benefit and additional protections; the planned 20-day entitlement from 2029 depends on the law's fiscal condition, so it is not unconditional.

Agree family leave and the benefits package

CLT article 473 also includes up to two consecutive days for specified bereavement, three for marriage, time to accompany a pregnant spouse or partner to up to six medical consultations or supplementary examinations, and one day a year for a medical appointment with a child aged up to six, with blood donation, qualifying exams, court attendance and preventive cancer checks following separate rules. There is no general 30-day paid family-care allowance in this provision.

The minimum package is statutory leave, the thirteenth salary, social security and FGTS duties. Vale-transporte covers qualifying public-transport commuting, with the employer bearing the eligible cost above 6% of basic salary, while meal benefits, private health cover and life insurance may follow a collective agreement or the offer. Ask which items are required for the role and which are additional.