Employing in Brazil

Home to bossa nova, a passionate football fanbase, carnivals and caipirinhas, the emerging economy of Brazil is becoming a popular destination for businesses seeking global expansion.

Brazil is the second-largest economy in the Americas and the ninth-largest in the world. The country is considered one of the ‘BRICS nations’ — an association of major emerging national economies including India, China and South Africa — meaning future investment is likely to pick up quickly. 

In addition to being one of the most multicultural and ethnically diverse nations on the planet, Brazil is also the only Portuguese-speaking country in the Americas and the largest Portuguese-speaking country in the world.

Each year, Brazil is becoming more and more urbanised; thus, there’s high potential for its industrial sectors. Most multinational companies with operations in Brazil are based in São Paulo — a popular choice for foreign companies — but there are also plenty of opportunities in Rio de Janeiro, Brasília (the capital) and Macaé.

Contents

Our Expertise

Managing a global workforce in Brazil

Brazil's labour market is governed by comprehensive laws that emphasise employee rights and benefits. TopSource Worldwide offers expert guidance and solutions for businesses managing their workforce in Brazil. We assist with payroll processing, legal compliance, and human resource management, ensuring that businesses can focus on their core operations while maintaining a compliant and efficient workforce in Brazil.

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Extensive expertise

Our team of experienced, knowledgeable staff collectively provide up-to-date employment information across 180 countries, so you can always get accurate advice.

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Entity-free employment

Feel free to hire employees from all over the world without being weighed down by setting up entities, running complex payroll or recruiting a hiring team.

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Payroll without hassle

Have the confidence that your staff will always be paid accurately and on time, so that you can focus on your core business activities and work towards your success. 

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Always-on support

Access helpful, relevant, personalised advice whenever you need it, along with expert-led recruitment policies and tried-and-tested HR best practices.

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Global Employee Cost Calculator

Estimate the cost of your new hire with our calculator. Simply enter their location and salary information in to this handy tool to see what will be spent in employment costs each month.

TESTIMONIALS

Hear from our clients about our EOR solutions in Brazil

"With TopSource we were able to have employees hired or maintained in Nutreco without having to establish an entity in these countries for only 1-2 employees. I think most countries are covered by TopSource, so they can help us with almost all cases. Good advice on conditions and direct contact with employees. Invoicing done directly to the company. An easy process compared to hiring employees by ourselves."

Annette van Duijnhoven

Nutreco

”We searched the market for a local payroll vendor in 2014 and we chose TopSource as our partner. We were looking for error-free and timely payroll processing and TopSource Worldwide delivers this, saving us time and money. We have worked together for 8 years now and would recommend them to anyone."

Praveen Lihinar

Sungard

”TopSource Worldwide has a detailed and methodical onboarding process that made it easy for us to get set up and running with our UK employees. They were able to take the worry out of trying to comply with all local laws and regulations. Because they have this knowledge we do not have to research on our own and hope we are in compliance. This has saved us hours of time and gives both the company and employees a sense of security."

Supervisor

Client based in Ft Worth, Texas, USA
GLOBAL EXPANSION STRATEGY

Personalised Employer of Record services in Brazil

TopSource Worldwide offers personalised Employer of Record (EOR) services tailored to meet the specific needs of your business in Brazil. This includes handling employee onboarding, payroll processing, tax compliance, employee benefits management, and HR support. Our EOR services ensure that your business meets all legal and regulatory requirements, providing a hassle-free solution to manage your Brazil-based employees.

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End-to-end Brazil payroll services

Looking to expand into Brazil? Our unparalleled expertise in global payroll services ensures that your business can seamlessly navigate the complexities of payroll on a global scale, supporting your Brazil expansion initiatives.

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Global entity management

Venturing into the Brazilian market can be both exciting and challenging. With distinct business regulations, cultural nuances, and economic landscapes, it's essential to have a clear roadmap for your business establishment journey.

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Accounting

Whether your goal is to process your purchase-to-pay transactions with minimum errors or manage your expense claim procedure, our team of experts can handle your accounting responsibilities, allowing you to focus on your core business and save time and money.

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Global EOR services

Managing a diverse global workforce can be complex. This is where TopSource steps in as an invaluable employer of record services partner for companies seeking to expand their global reach while ensuring compliance with local employment laws and regulations.

Global Expansion Simplified

How to do business in Brazil

Entering the Brazilian market presents a mix of excitement and challenges. Given unique business regulations, cultural intricacies, and economic dynamics, a well-defined roadmap is crucial for a successful business establishment.

TopSource Worldwide is with you at every stage. Whether it's navigating local regulations or facilitating seamless operational transitions, our expertise ensures a swift and efficient process for establishing your business in Brazil.

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Brazil Insights

Key insights into Brazil's landscape

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VAT rates: Brazil has a complex system with different rates. The standard Value Added Tax (VAT) rate is 16%, and there are reduced rates, exemptions, and a state-level tax known as ICMS.

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Ease of Doing Business rank: Brazil ranks 124th in the World Bank's Ease of Doing Business Index, indicating some challenges in the business environment.

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Consumer Confidence Index: Economic Optimism Index in Brazil decreased to 90.80 points in January 2024 from 93.20 points in 2023.

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Employee maternity/paternity leave: Maternity leave is 120 days with full salary coverage, and paternity leave is typically 5 days.

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Employee termination period: Standard notice for termination varies, but it is typically 30 days, and additional severance pay may apply under certain conditions.

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Employee salary pay date: Compensation is typically paid monthly, on the last day of the month (no later than the fifth working day of the following month) or bi-weekly (on the 15th and last working day of the month).

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Bank holidays: Holidays in Brazil include New Year's Day, Carnival, Good Friday, Labour Day, Independence Day, Proclamation of the Republic, Christmas, and other regional holidays.

Country guidelines

Key considerations for hiring in Brazil

Salary pay date

The salary pay date should be determined in the contract of employment or union agreement. Compensation is typically paid monthly, on the last day of the month (no later than the fifth working day of the following month) or bi-weekly (on the 15th and last working day of the month).

At TopSource Worldwide, our employees are paid on the 30th of each month (or the last working day of the month, should this fall on a holiday or weekend).

Salary increases

Wages are generally increased annually. However, the law doesn’t provide for mandatory salary increases.

Salary month 13/14

There’s a mandatory ‘Christmas Bonus’ (known as the 13th Salary — 13° Salario), equal to one month’s salary and paid out in two instalments in November and December.

Social security system

INSS (Instituto Nacional do Seguro Social)

Both employers and employees pay social security contributions which are used to fund government pensions paid to retired citizens.
Employer contributions usually range from 26.8% to 28.8% (20% is allocated to the National Social Security Institute, or INSS, and up to 8.8% to other social security taxes).

There’s no cap to the employer’s contribution.

Healthcare

Brazil’s public healthcare system is the Sistema Único de Saúde (SUS). The system is open to Brazilians and foreign residents of the country.

Scheme
Description
Employer %
FGTS*
Severance Indemnity Fund
8.00%
SESI or SESC
Social Assistance
1.50%
SENAI or SENAC
Social Assistance
1.00%
INCRA
Social Assistance
0.20%
Education
Education
2.50%
SAT/RAT
Labor Accident Risk
3.00%

*Federal Severance Pay Fund (FGTS)

Employers are required to make contributions to the FGTS corresponding to 8% of an employee’s monthly compensation. This must be deposited into an account registered in the employee’s name at the Brazilian Bank Caixa Econômica Federal.

Mandatory payments: employer to employee

Vacation allowance and 13° Salario: payable in months 13 and 14.

Payment
Description
Employer %
Aviso Prévio
Vacation allowance
8.33%
Ferias
1/3 Vacation Premium
2.77%
Décimo Terceiro
13th Salary
8.33%

An overview of the main statutory Benefits

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Pension

Private pensions are optional. Employees can subscribe to a private pension via an employer-sponsored plan or a separate authorised financial institution.

Employees via TopSource Worldwide will be given the option to subscribe to an employer-sponsored plan with AMIL as part of their employment offer.

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Sickness

Employees are granted full sick pay for the first 15 days of a documented illness to be paid by the employer. After the 15th day of absence due to sickness, social security (INSS) will pay sick leave benefit to the employee.

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Maternity & paternity

Female employees are entitled to four months of mandatory maternity leave paid by the social security agency. Employers may optionally offer an additional two months of maternity leave. This amount can then be deducted from the company’s corporate income tax.

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Transport subsidy & Food vouchers

A transport subsidy for workers is a mandatory entitlement for all employees who live further than 1km from their place of work. Employers must provide their employees with transport to and from work or subsidise their public transport expenses by paying all such costs exceeding 6% of an employee’s gross salary.

Employees are entitled to food vouchers for every working day of the month (up to 22 per month).

Contractual provisions

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Medical

A medical must be carried out within 48 hours of the start date. This’ll be organised as part of the onboarding process.

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Rules of registration

All employees must be registered 48 hours before their start date.

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Probationary period

The probation period of any employee may be established for a period up to 90 days. This can be renewed once, providing the 90 days is observed (e.g., 45 days renewable for 45 days or 30 days renewable for 60 days).

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Rest breaks

One-hour break for rest and meal is mandatory for employees that work more than six hours per day. Employees are also entitled to a paid weekly rest period (24 hours), preferably on Sundays.

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Working hours & Vacation allowance

The working day in Brazil typically run from 8 am to 6 pm, Monday to Friday, with an hour’s unpaid break. Employees average 40 hours per week; by law they must not exceed 44 hours.

By law, vacations in Brazil are remunerated: employees must receive the wage corresponding to that period. Employees are also given an additional one-third of their monthly salary as a vacation bonus. This is payable no later than two working days before the employee’s annual leave begins.

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Overtime

Any hours that exceed the contracted workday must be paid with an additional 50% (100% on Sundays or public holidays). This rate can be increased under the collective labour agreements. Brazilian law prohibits any shifts longer than 10 hours per day, so only two overtime hours are permitted on a regular working day.

Termination

Termination without cause

The employer isn’t obliged to disclose the reason of termination.
This triggers payment of salary balance, prior notice, accrued vacation (plus one-third bonus), proportional vacation (plus one-third bonus), proportional 13th salary, 50% severance fund (FGTS) fine over the balance of the employee’s individual account.
 The employee is also entitled to withdraw the FGTS balance and receive unemployment insurance.

Resignation by the employee

This triggers the payment of salary balance, proportional 13th salary, accrued vacation (plus one-third bonus) and proportional vacation (plus one-third bonus).

Indirect termination

Characterised by a serious misconduct that the employer commits with the employee.

 

  • Triggers payment of salary balance, prior notice, accrued vacation (plus one-third bonus), proportional vacation (plus one-third bonus), proportional 13th salary, 50% severance fund (FGTS) fine over the balance of the employee’s individual account.

Termination by mutual consent

Whereby both parties agree to terminate employment.

 

  • Triggers the payment, by half, of the prior notice and the FGTS fine (employee’s part) and, in full, other labour allowances due in a termination without cause.

  • In this type of termination, the employee will be able to withdraw up to 80% of the FGTS balance and won’t be entitled to receive the unemployment insurance.

Holiday entitlement

An employee is entitled to 30 days of paid annual leave once they have completed 12 months of work for the employer. This waiting time cannot be waived; an employee must complete a full year of work in accordance with Brazilian Labor Law.

Holiday accrual begins from the first day of employment. Annual leave must be taken within 10 months after it accrues. Holiday entitlement must, therefore, not be carried forward to the following year. Pro-rata holiday can be calculated as proportional to 30 days per 12 months.

In addition to nationally observed public holidays, there are some regional holidays and ‘pontos facultativos’ which are observed by the public sector. Private sector employers may choose to observe these holidays, if they wish. Should a public holiday fall on a non-working day, the date is fixed and the employee won’t be entitled to any additional days of leave.

Employ and pay anywhere

Specialising in multi-country payroll solutions

TopSource Worldwide offers comprehensive payroll outsourcing services, ensuring seamless and accurate management of your organisation's payroll functions. With cutting-edge technology and a team of experienced professionals, we handle payroll processing, tax compliance, and regulatory requirements with precision.

Calculate Your Employer of Record Taxes in Seconds

Employment Cost Calculator in Brazil

Our Employment Cost Calculator simplifies complex tax calculations for global businesses. Accurately assess tax obligations, ensuring compliance with local regulations. Streamline payroll management effortlessly with our user-friendly tool, providing transparency and efficiency in international workforce taxation.

In addition to calculating your EOR taxes, our calculator can also help you:

  • Understand the different types of EOR taxes
  • Stay up-to-date on the latest changes to EOR tax regulations
  • Avoid penalties for non-compliance
Our author

Mark Robbins

Global Sales Director

Mark is the Sales Director at Topsource Worldwide. He has been a pioneering figure in the global expansion space since 2013. He is the first salesperson to sell EOR services in Europe, a feat he accomplished in 2013. 

Published 2023-11-14 00:00:00

Updated 2023-11-15 00:00:00

Adrian Cooney

Reviewed by:

Adrian Cooney

Adrian Cooney

Fact checked by:

Adrian Cooney

Employer of Record FAQ

Frequently Asked Questions about Brazilian employment solutions

What is an Employer of Record in Brazil?

An Employer of Record (EOR) is a professional services provider that assumes the responsibility of being the legal employer for a company's workforce in Brazil. This entails managing tasks such as payroll processing, tax withholding, benefits administration, and ensuring compliance with local labour laws and regulations.

How do global employment services work?

Global employment services operate as a comprehensive solution for businesses seeking to expand their workforce across borders. These services, often provided by Employer of Record (EOR) companies like TopSource Worldwide, streamline the complexities of international employment.

What are the benefits of working with an Employer of Record in Brazil?

Employer of Record companies assume the legal responsibilities associated with employment, alleviating the burden of compliance, payroll, and HR management in Brazil. This allows companies to expand globally without the complexities of establishing legal entities in each location.

What is the difference between EOR & PEO?

An EOR acts as the legal employer, handling tasks like payroll, tax compliance, and benefits administration. This allows companies to expand internationally without establishing legal entities. On the other hand, a PEO shares employer responsibilities with the client company, often co-employing workers.

How are employer payroll taxes calculated in Brazil?

Calculating employer payroll taxes involves understanding the various taxes associated with employing workers and complying with tax regulations in Brazil. Key components include federal and state income taxes, Social Security, Medicare, and unemployment taxes.

What global employment solutions does TopSource offer?

TopSource Worldwide facilitates hassle-free global expansion by acting as the legal employer, handling payroll, tax obligations, and HR responsibilities. With expertise in global entity management, TopSource assists businesses in navigating the intricacies of legal structures across borders.

Let's get started

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