---
title: "Brazil"
id: "11178"
type: "global-payroll"
slug: "brazil"
published_at: "2025-07-23T15:42:57+00:00"
modified_at: "2026-09-16T15:12:16+00:00"
url: "https://topsourceworldwide.com/global-payroll/brazil/"
markdown_url: "https://topsourceworldwide.com/global-payroll/brazil.md"
taxonomy_continent:
  - "South America"
---

# Payroll Services in Brazil

Fully managed Brazilian payroll – eSocial events filed on time and reconciled before transmission, FGTS paid through FGTS Digital by the 20th, the 13th salary and férias carried as provisions rather than year-end surprises, and the convenção coletiva that binds you identified and applied, with a named specialist a phone call away.

Run through your own Brazilian entity, with your global view consolidated in Portico.

[Get in touch](https://topsourceworldwide.com/contact-us/)

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[Read reviews](#testimonials)

## What Brazilian payroll actually involves

Brazilian payroll is not complicated because the rules are unclear. It is complicated because there is more of it. A Brazilian employee is paid thirteen and a third salaries a year, not twelve. Employer social security has no ceiling, so a senior hire costs the same percentage as a junior one. The FGTS is 8% every month and a further 40% of everything ever deposited when the employee leaves without cause. A collective agreement you never signed sets the floor salary, the annual correction and half the benefits. And every one of those facts reaches the government through a single system, eSocial, on deadlines measured in days rather than months. The headline contribution rates say 35.8%. The real loading over base salary is closer to 51%.

### Employer contributions have no ceiling

Brazil is unusual: the employee’s INSS contribution stops at a ceiling of R$8.475,55 a month, but the employer’s does not. The employer pays 20% CPP plus RAT of 1% to 3% adjusted by the FAP multiplier, plus around 5.8% of third-party contributions – typically 27.8% of total remuneration, on every real. A senior hire costs the same percentage as a junior one, which is the opposite of most countries and changes how you model Brazilian headcount.

### FGTS is 8% every month, plus 40% on the way out

The FGTS is a severance fund, not a tax: 8% of gross remuneration deposited monthly by the 20th, through FGTS Digital since March 2024. On dismissal without cause the employer pays a further 40% penalty on every deposit made across the whole contract. That penalty scales with tenure and is the reason a ten-year dismissal in Brazil costs around six months’ salary. We carry it as a provision, not a shock.

### Thirteen and a third salaries a year

A Brazilian employee is paid twelve monthly salaries, a 13th salary in two instalments due 30 November and 20 December, and 30 days of férias with a constitutional one-third bonus on top. Total remuneration is therefore about 111% of base salary before any contribution is calculated. The first 13th instalment carries FGTS but no INSS or IRRF; the second carries both, calculated on their own separate tables.

### The convenção coletiva binds you whether you signed it or not

Brazil operates one union per category per municipality, and the resulting convenção coletiva binds every employer in that category and territory regardless of membership. It sets the floor salary for the category, the annual data-base correction applied retroactively, overtime premiums above the statutory 50%, and mandatory benefits such as meal vouchers and group life insurance. Identifying the right CCT is the first task, not a detail.

### Everything goes through eSocial

eSocial is the single channel through which labour, social security and tax data reach the government, and it feeds FGTS Digital, DCTFWeb and EFD-Reinf. Admissions must be filed before the employee’s first day; terminations within ten days; periodic events by the 15th. DIRF, SEFIP, CAGED and RAIS are all gone. One consequence: an error in eSocial propagates straight into your FGTS guia, so reconciliation happens before transmission, not after.

## Our Partners Globally

## Calculate Your Employee Costs in Brazil

Enter a gross salary to see the full annual cost of a Brazilian employee – employer INSS, FGTS and the provisions for the 13th salary and férias included in your total spend per employee. Nothing is capped, so the percentage holds at every salary level.

##### Employment Cost Calculator

*Indicative figures only and not definitive legal advice. Local regulations change frequently. [Consult an expert](/contact-us)

##### Brazil

  Annually Monthly

|  | British Pound | Brazil |
| --- | --- | --- |
| Base Salary (per month) |  |  |
| Employer Contributions |  |  |
| Total Cost (Annual) |  |  |
| Total Cost (Monthly) |  |  |

Employer of Record services in [Learn more](#)
Payroll Outsourcing in [Learn more](#)

## Know your Brazilian employment costs before you commit

Tell us the role, the salary and the category – we’ll send back the full Brazilian employer cost, CCT floor and termination provision included, within one business day.

[Get a Custom Payroll Quote](https://topsourceworldwide.com/contact-us/)

> “Their expertise and understanding of the unique hiring, payment, and human resource practices in each country has been nothing short of outstanding. Our Client Success Manager, has done just that … ensured our success. Her availability and willingness to engage on a personal level has made all the difference.”

Director of Research Operations,

> “Excellent service, especially from our account manager who has gone above and beyond to help us use the platform effectively. Our manager, significantly simplifies my workload. It is like having your own TopSource HR representative on your team.”

Chief Human Resources Officer,

> “TopSource has been our go-to resource for international hiring. They are responsive, thorough, respectful and knowledgeable. The Client Success team has provided us with the utmost customer service, and the more we use TopSource, the more, it gives us access to more resources and knowledge.”

Senior Manager, Human Resources ,

## Employer Costs in Brazil Explained

Employer statutory costs in Brazil are about 35.8% of total remuneration, which works out at roughly 51% of base salary. The social security element is typically 27.8% – a 20% CPP, a RAT of 1% to 3% multiplied by the company’s FAP factor of 0.5 to 2.0, and around 5.8% of third-party contributions – plus 8% FGTS. The two percentages differ because total remuneration is about 111% of base salary: twelve monthly salaries, a 13th salary, and a constitutional one-third bonus on 30 days of férias. And unlike almost every other country, none of the employer’s contribution is capped – the employee stops paying INSS at R$8.475,55 a month, but the employer pays 27.8% on every real at every salary level. On top sit the FGTS termination penalty of 40% of cumulative deposits, and whatever your convenção coletiva requires. Here’s the breakdown.

#### INSS, RAT and the January 2026 income tax change

The employer’s social security contribution has three parts. The CPP is 20% of total remuneration under article 22 of Lei 8.212/1991. The RAT, for occupational risk, is 1%, 2% or 3% depending on the CNAE activity code, then multiplied by the company’s FAP – a performance factor between 0.5 and 2.0 published each September, which makes the effective RAT anything from 0.5% to 6%. The terceiros contributions fund the Sistema S and related bodies and typically total 5.8%, though the exact composition depends on the FPAS code: salário-educação 2.5%, SESI/SESC/SEST 1.5%, SENAI/SENAC/SENAT 1.0%, SEBRAE 0.6% and INCRA 0.2%. A typical employer therefore pays 27.8%, with a realistic range of 26.3% to 31.8%.

The critical structural point is that none of this is capped. Article 22 applies to the total remuneration paid, with no reference to the contribution ceiling – that ceiling, in article 28, limits only the employee’s own contribution. The employee pays on a progressive scale of 7.5%, 9%, 12% and 14% up to a ceiling of R$8.475,55, a maximum of R$988,09 a month. Above that the employee pays nothing more and the employer keeps paying 27.8% on everything.

Income tax withholding changed this January. Lei 15.270 of 26 November 2025 did not move the tax bands – the statutory exemption is still R$2.428,80 a month. What it added was a monthly reduction, a redutor, of up to R$312,89 calibrated so that anyone earning up to R$5.000 a month pays no income tax at all, tapering linearly to zero at R$7.350. Payroll systems must apply it at source, not leave it to the annual return. One open point worth knowing: how the redutor interacts with the 13th salary, which is taxed separately and exclusively at source, is not yet settled in published guidance.

Seventeen sectors still benefit from the desoneração transition under Lei 14.973/2024, but it is winding down: the reduced CPP share rose from 5% in 2025 to 10% in 2026, becomes 15% in 2027 and disappears entirely on 1 January 2028. The reduced rate never applied to the 13th salary, which always bears the full 20%.

#### FGTS, and what a dismissal actually costs

The FGTS is 8% of gross remuneration under Lei 8.036/1990, deposited into an account in the employee’s name. The base is wide: salary, overtime, night premium, weekly rest pay, commissions, the 13th salary, vacation pay including the one-third bonus, and indemnified notice. Vale-transporte, PAT meal benefits and profit-sharing are outside it. Since 1 March 2024 deposits run through FGTS Digital, which replaced SEFIP, GRF and Conectividade Social, calculates the amount from the remuneration already declared in eSocial, and issues a guia payable by PIX. The deadline moved from the 7th to the 20th of the following month.

On dismissal without cause the employer pays a penalty of 40% of the total deposits made over the whole contract. Termination by mutual agreement under article 484-A carries 20%. The additional 10% social contribution that used to sit alongside was abolished by Lei 13.932/2019 with effect from 1 January 2020 and has not returned.

That 40% is what makes long-service dismissals expensive, because it compounds with tenure. Aviso prévio is 30 days plus three days per year of service, capped at 90 days. Add the pro rata 13th and férias with their notice projections, and the total cash at termination runs to roughly two and a half to three months’ salary for a one-year employee, four to four and a half months at five years, and around six months at ten years. Payment is due within ten days of the contract ending; miss it and article 477 §8 costs a further month’s salary.

Two practical points. Union assistance at termination stopped being mandatory in the 2017 reform, but a good many CCTs reinstate homologação contractually and some labour courts enforce those clauses – read the CCT before assuming. And late FGTS deposits do more than attract interest: they block the CRF certificate, which in turn blocks public contracting, credit lines and various licences. Commercially that is sharper than the fine.

#### The 13th salary, férias and the one-third bonus

The 13th salary is one twelfth of December salary for each month worked, with a month counting if the employee worked fifteen days or more. It is paid in two parts under Lei 4.749/1965: an advance of 50% of the previous month’s salary, payable any time between February and 30 November, and the balance by 20 December. The tax treatment differs between them. The first instalment carries FGTS but no INSS and no IRRF. The second triggers INSS on the whole 13th, calculated separately from the month’s salary on its own progressive table with its own ceiling, and IRRF likewise calculated separately and taxed exclusively at source.

Férias is 30 calendar days after each twelve-month acquisitive period, paid at normal remuneration plus a constitutional one-third bonus that cannot be waived. The employee may convert up to one third – ten days – into cash as an abono pecuniário by requesting it at least fifteen days before the end of the acquisitive period, and the employer cannot refuse a valid request. The abono is exempt from both INSS and IRRF, which is worth knowing when an employee asks. Leave may be split into up to three periods since the 2017 reform, one of at least fourteen consecutive days and the others at least five, and cannot start in the two days before a holiday or rest day. Payment is due up to two days before the leave begins.

The trap is the concessive period. The employer must grant the leave within the twelve months following the end of the acquisitive period. Miss that and article 137 requires the vacation to be paid in double – and the doubling attaches to failing to grant it in time, not merely to paying it late. Accrued férias sitting unbooked past 24 months from the start of the reference year is a liability accumulating at 200%.

Add these together and total remuneration is about 111% of base salary: twelve monthly salaries, one 13th, and the one-third bonus. Every contribution and every FGTS deposit is calculated on that larger figure, which is why Brazilian employer loading is close to 51% rather than the 35.8% the headline rates suggest.

#### Working time, leave and the escala 6×1 question

Normal hours are 8 a day and 44 a week under the Constitution, with a monthly reference of 220 hours. Overtime is capped at two hours a day and carries a minimum 50% premium, though CCTs frequently set more. Work on a weekly rest day or public holiday without a substitute day off is paid double. The night premium is 20% for work between 22:00 and 05:00, with the night hour reduced to 52 minutes 30 seconds. A banco de horas allows offsetting within six months by individual written agreement, or twelve months by collective agreement.

Employers with more than twenty employees must keep a time record. Three systems are permitted: REP-C, a physical clock requiring ministerial homologation; REP-A, an alternative system that needs no approval but must be authorised by a collective agreement; and REP-P, a program-based system needing only an INPI software registration and no union authorisation. REP-P is the mainstream route for office and remote workforces. Records are kept five years, pre-filled records are invalid, and a tolerance of five minutes per marking applies.

Maternity leave is 120 days, extendable to 180 under the Empresa Cidadã programme for employers taxed on lucro real, with the extension deducted from IRPJ. Job stability runs from confirmation of pregnancy to five months after the birth. Paternity leave is currently five days, or twenty under Empresa Cidadã. That changes: Lei 15.371 of 31 March 2026 raises it to ten days from 1 January 2027, fifteen from 2028 and twenty from 2029, and creates a salário-paternidade benefit the employer pays and offsets. Nothing in it applies during 2026 – an employer today still owes five days, and should budget for ten from January.

For sickness the employer pays the first fifteen days at full salary and the INSS takes over from the sixteenth. If the employee returns and is absent again for the same condition within sixty days, the fifteen days do not restart.

#### eSocial, filing, and the pejotização risk

eSocial consolidates labour, social security and tax reporting into one channel, on version S-1.3 for periods from January 2025. Admissions are filed by the end of the business day before work starts. Terminations within ten days. Work accident reports by the next business day, immediately for a fatality. Periodic events – remuneration, payments, payroll closing – by the 15th of the following month. From that data, DCTFWeb produces the consolidated federal return, now due the last business day of the following month after IN RFB 2.248/2025, and EFD-Reinf reports withholdings on non-employees monthly by the 15th. Social contributions themselves are still paid by the 20th.

What has gone is worth stating plainly, because a good deal of published guidance is out of date. DIRF was discontinued – the last one was filed in February 2025 for reference year 2024, and the data now flows through eSocial S-1210 and the EFD-Reinf R-4000 series. SEFIP and GRF went with FGTS Digital in March 2024. CAGED was replaced from the January 2020 competency and RAIS from reference year 2019. A private-sector employer in 2026 files none of them.

A Brazilian legal entity with a CNPJ is required to employ someone under the CLT. eSocial, FGTS Digital and DCTFWeb are all keyed to a CNPJ, and there is no route for a non-resident entity to be an eSocial employer. The practical options are a subsidiary, usually a Ltda., a branch requiring federal executive authorisation, or an [Employer of Record in Brazil](https://topsourceworldwide.com/employer-of-record/brazil/)
 – which works, but note that the end client can carry subsidiary liability under TST Súmula 331 and joint liability on the social security side. It removes the entity, not the obligations.

Then there is pejotização – engaging an individual through their own company. It is lawful only where the relationship genuinely lacks subordination, personal performance, non-eventual work and onerosity. Where those exist, the labour courts recognise employment and the employer owes the full retroactive package. This is the central Brazilian labour dispute of the decade and it is unresolved: STF Tema 1389 will decide the lawfulness of PJ contracting, the Labour Court’s competence and, decisively, the burden of proof. The merits judgment opened in November 2025 and has been stalled since December awaiting a review. In June 2026 the national suspension was partially lifted, so cases may now proceed in the first instance and the regional courts but freeze again at that point; TST cases remain suspended. Until the STF rules, treat PJ engagement of individuals doing core subordinated work as carrying unquantified retroactive exposure.

## Brazilian employer contribution rates, 2026

| Contribution | Employer | Employee | Applies to |
| --- | --- | --- | --- |
| INSS – CPP patronal | 20% | — | Total remuneration, with NO ceiling. Lei 8.212/1991 art. 22 |
| INSS – RAT/SAT | 1%, 2% or 3% × FAP (0.5–2.0) | — | By CNAE risk grade; effective range 0.5% to 6%. FAP published each September |
| INSS – terceiros | typically 5.8% | — | Salário-educação 2.5%, Sistema S 2.5%, SEBRAE 0.6%, INCRA 0.2%. Varies by FPAS code |
| INSS – employee | — | 7.5% / 9% / 12% / 14% progressive | Ceiling R$8.475,55 a month; maximum R$988,09. Portaria Interministerial MPS/MF 13/2026 |
| Total employer INSS, typical | ≈ 27.8% | — | Range 26.3% to 31.8% depending on RAT and FAP |
| FGTS | 8% | — | Monthly, by the 20th, through FGTS Digital. Lei 8.036/1990 |
| FGTS termination penalty | 40% of all deposits made | — | Dismissal without cause. 20% for termination by mutual agreement (CLT art. 484-A) |
| 13th salary | 1 month per year | — | Two instalments: by 30 November and by 20 December. Lei 4.090/1962 and 4.749/1965 |
| Férias + adicional de 1/3 | 30 days + one third | — | Per 12-month acquisitive period. Double pay if not granted within the concessive period |
| IRRF | — | 0% / 7.5% / 15% / 22.5% / 27.5% | Statutory exemption R$2.428,80; effective zero-tax point R$5.000 via the Lei 15.270/2025 redutor, tapering to R$7.350 |
| Salário mínimo | R$1.621,00 a month | — | R$54,04 daily, R$7,37 hourly. Decreto 12.797/2025, from 1 January 2026 |
| Vale-transporte | Cost above 6% of base salary | up to 6% of base salary | On employee request. Not salary – no INSS, FGTS or IRRF. Lei 7.418/1985 |

### How the Brazilian cost structure actually adds up, 2026

| Component | 2026 figure | What it means |
| --- | --- | --- |
| Total remuneration base | ≈ 111% of base salary | 12 monthly salaries + 13th salary + the one-third férias bonus. Every contribution is calculated on this, not on 12 months |
| Employer INSS + FGTS | ≈ 35.8% of total remuneration | 27.8% INSS (no ceiling) + 8% FGTS, in the typical RAT 2% / FAP 1.0 case |
| Employer loading over base salary | ≈ 51% | Flat at every salary level, because employer contributions have no ceiling |
| Termination provision | 40% of cumulative FGTS | ≈ 0.42 months’ salary per year of service, payable on dismissal without cause |
| Aviso prévio | 30 days + 3 per year, max 90 | Lei 12.506/2011. Worked or indemnified; indemnified notice carries FGTS |
| CCT-driven costs | Varies by category and territory | Floor salary, data-base correction applied retroactively, meal voucher, group life insurance, overtime above 50%. Not optional |
| Desoneração (17 sectors) | CPP at 10% of payroll in 2026 | Lei 14.973/2024 transition: 5% in 2025, 10% in 2026, 15% in 2027, full 20% from 2028. Never applied to the 13th salary |

### What an employee on R$10.000 a month actually costs, 2026

| Component | Annual amount | % of base salary | Note |
| --- | --- | --- | --- |
| Base salary, 12 months | R$ 120,000 | 100.0% | The figure most foreign parents budget from |
| 13th salary | R$ 10,000 | 8.3% | Lei 4.090/1962 – one month per year |
| Férias one-third bonus | R$ 3,333 | 2.8% | Constitutional; the 30 days themselves are already in the 12 months |
| Total remuneration | R$ 133,333 | 111.1% | The base on which every contribution is calculated |
| Employer INSS at 27.8% | R$ 37,067 | 30.9% | CPP 20% + RAT 2% + terceiros 5.8%, no ceiling |
| FGTS at 8% | R$ 10,667 | 8.9% | Monthly through FGTS Digital |
| Total annual employer cost | R$ 181,067 | 150.9% | A loading of about 51% over base salary |

The loading does not fall with salary. In most countries the effective employer rate declines as salary rises, because contributions are capped; Brazil is the exception. The employee’s INSS stops at R$8.475,55 a month but the employer’s does not, so the loading is 50.9% on a base salary of R$2.000 a month and still 50.9% at R$60.000. A blended percentage actually works here, where it does not elsewhere. The worked example assumes RAT 2% with a FAP of 1.0 and terceiros at 5.8% – the typical case – and excludes vale-transporte, meal benefits and any convenção coletiva cost, which for many categories adds several points more. Your own RAT depends on your CNAE activity code, your terceiros percentage on your FPAS code, and the FAP multiplier is company-specific and republished each September: a payroll quoted at 27.8% employer INSS is quoting the typical case, not yours.

Rates, ceilings and thresholds shown are for the 2026 calendar year and were verified on 28 August 2026. Brazilian payroll figures reset on 1 January, the FAP multiplier is republished each September, and collective agreement tables change on each category’s own data-base. This page is general information, not tax or legal advice.

[Get a Custom Payroll Quote](https://topsourceworldwide.com/contact-us/)

## How our Brazilian payroll service works

1. Map your setup

We confirm your CNPJ and eSocial employer registration, your CNAE code and the RAT it produces, your current FAP multiplier and whether it is worth contesting in the November window, your FPAS code and the actual terceiros percentage it generates rather than the assumed 5.8%, whether you sit in one of the seventeen desonerados sectors, and – most importantly – which convenção coletiva binds you by category and municipality. Those inputs decide your real Brazilian employment cost, and the CNAE-to-RAT mapping is the one most often wrong on a payroll we inherit.

2. Migrate or onboard

Employees are filed in eSocial before their first day, because the S-2200 admission event is due by the end of the preceding business day. We carry over FGTS deposit history – which drives the 40% termination penalty – férias acquisitive and concessive dates, 13th salary accruals, and the CCT classification and floor. Anyone whose concessive period is close to expiring gets flagged immediately, because unbooked férias becomes payable at double.

3. Run and review

Each month you receive a payroll report for approval before anything is paid – gross to net per employee, employer INSS split into CPP, RAT and terceiros, FGTS shown separately, 13th salary and férias provisions carried as liabilities rather than surprises, CCT floors and premiums applied, and variances flagged. Nothing is paid or filed until you approve it.

4. File, pay and remit

Salaries are paid in reais. eSocial periodic events go by the 15th, and we reconcile before transmission because an eSocial error propagates straight into the FGTS guia. FGTS is paid through FGTS Digital by the 20th, social contributions by the 20th, DCTFWeb by the last business day of the following month, and EFD-Reinf by the 15th. Terminations are filed within ten days and paid within ten days. The 13th salary instalments are scheduled for 30 November and 20 December, with the INSS and IRRF treatment applied correctly to each.

5. Stay current

Brazilian payroll changes at several points in the year and 2026 has been busy: the income tax redutor arrived on 1 January, the desoneração step-up with it, NR-1 psychosocial risk fines became enforceable on 26 May, and the CCT data-base falls in a different month for every category. We apply the changes, reload your CCT tables when it is renegotiated and pay the retroactive catch-up, re-verify the figures on this page, and brief you on what is coming. We run the rest of Latin America the same way – see [payroll services in Mexico](https://topsourceworldwide.com/global-payroll/mexico/)
 and [payroll services in Colombia](https://topsourceworldwide.com/global-payroll/colombia/)
.

## Why TopSource for Brazilian Payroll

TopSource for payroll, Employer of Record or any other of our services represents a simpler, more reliable and transparent option.

We don’t hide fees or sneak price increases. We run Brazilian payroll in-house, not brokered to a local escritório – the same team that transmits your eSocial events answers your calls, in English and Portuguese. You get a named account manager, one consolidated monthly invoice covering salaries, contributions and fees, and one live Portico view of Brazil beside every other country we run for you. Portico syncs with your time-tracking, leave and HR systems via API – set up by our onboarding team, not left to yours. GDPR, SOC 2 and ISO 27001 certified.

[Global Payroll](https://topsourceworldwide.com/global-payroll/)
[Get Started](https://topsourceworldwide.com/contact-us/)

## Other services Accelerating your growth in Brazil and beyond

#### TopSource goes far beyond payroll, acting as your end-to-end partner in global workforce management. From Employer of Record (EOR) services and seamless entity setup to localized accountancy and fractional HR support, we cover every aspect of international employment.

### Global Employer of Record (EOR) services

With our Global EOR services, you can hire talent in any country without establishing a legal entity. We handle employment contracts, payroll, benefits, and compliance on your behalf, enabling fast, risk-free global expansion.

### Actionable HR Advisory

On demand access to our fractional and regional HR professionals who understand local laws, cultures, and best practices. Bespoke talent intelligence including salary, business and talent market benchmarking.

### Global entity management

Our global entity management team helps you establish and maintain your corporate entities worldwide. We ensure full compliance with local laws and regulations, streamline administrative processes, and minimize risk — so you can focus on growing your business.

### Accounting

We offer comprehensive accounting solutions tailored to meet your international needs. From bookkeeping and financial reporting to tax filings and audits, our services help you maintain transparency, accuracy, and compliance in every jurisdiction.

## Meet our experts for Brazil

Whether you’re entering the market or scaling operations, our specialists provide the insight and guidance you need to succeed in one of the world’s most dynamic and regulated employment landscapes. With TopSource, you’re backed by real experts, every step of the way.

[Our People](https://topsourceworldwide.com/our-people/)

## Beyond a payroll service **A globalization accelerator**

A payroll platform for your employees is just the beginning. We are constantly evaluating your entire organisation to identify compliance issues and ways to accelerate your global growth.

- [Payroll platform](#)
- [Audit](#)
- [Intelligence](#)
- [Advisory](#)

##### Payroll platform

###### Global payroll simplified

Your intuitive hub for paying global teams. Simple, powerful, and designed to scale with you — no complexity, just clarity.

##### Audit

###### Eliminate barriers to growth

Avoid compliance issues across your global workforce and uncover opportunities to improve profitability. On a quarterly basis we’ll help you audit your global talent strategy to ensure it aligns with your business goals.

##### Intelligence

###### Build a data-driven talent strategy

Grow confidently and profitably with access to the latest TopSource insights & data on hiring markets, salary benchmarking & benefits.

##### Advisory

###### Expert guidance that turns complexity into clarity.

Whether you’re managing a global acquisition or entering a new market, you get clear guidance to navigate complex decisions, avoid delays, and accelerate your global expansion.

## Brazilian payroll FAQs

### What are employer payroll costs in Brazil?

Employer statutory costs in Brazil are about 35.8% of total remuneration and roughly 51% of base salary. The social security element is typically 27.8% – a 20% CPP, a RAT of 1% to 3% multiplied by the company’s FAP factor, and around 5.8% of third-party contributions – plus 8% FGTS. The reason the two percentages differ is that total remuneration is about 111% of base salary, because Brazil pays a 13th salary and a one-third holiday bonus on top of twelve monthly salaries.

### Is there a ceiling on employer social security contributions in Brazil?

No. The employer’s INSS contribution under article 22 of Lei 8.212/1991 applies to total remuneration with no ceiling. The ceiling of R$8.475,55 a month, giving a maximum contribution of R$988,09, limits only the employee’s own contribution. This means employer cost in Brazil stays at the same percentage at every salary level – unlike most countries, where the effective rate falls as salary rises.

### What is the 13th salary in Brazil, and when is it paid?

The 13th salary is an additional month’s pay, equal to one twelfth of December salary for each month in which the employee worked fifteen days or more. It is paid in two instalments: an advance of 50% of the previous month’s salary, due at any point between February and 30 November, and the balance by 20 December. The first instalment carries FGTS but no INSS or income tax; the second carries both, each calculated on its own separate table.

### How much annual leave do Brazilian employees get?

Brazilian employees receive 30 calendar days of férias after each twelve-month acquisitive period, paid at normal remuneration plus a constitutional one-third bonus. The employee may convert up to ten days into cash as an abono pecuniário, which is exempt from both INSS and income tax. The employer must grant the leave within the twelve months following the acquisitive period; if it does not, article 137 of the CLT requires the vacation to be paid in double.

### What changed in Brazilian income tax in January 2026?

Lei 15.270 of 26 November 2025 introduced a monthly income tax reduction, effective 1 January 2026, that makes anyone earning up to R$5.000 a month effectively exempt. It did not change the tax bands – the statutory exemption is still R$2.428,80 – but adds a redutor of up to R$312,89 calibrated to bring the tax to zero at R$5.000, then tapering linearly to nothing at R$7.350. Payroll systems must apply it at source rather than leaving it to the annual return.

### How much does it cost to dismiss an employee in Brazil?

Dismissal without cause in Brazil typically costs two and a half to three months’ salary for a one-year employee, four to four and a half months at five years, and around six months at ten years. The components are the notice period of 30 days plus three days per year of service capped at 90, the pro rata 13th salary and férias with their notice projections, and a penalty of 40% of every FGTS deposit made across the whole contract. That penalty is what makes long-service dismissals expensive. Payment is due within ten days.

### What is a convenção coletiva, and does it apply to us?

A convenção coletiva de trabalho is a collective agreement between the union for an economic category and the corresponding employers’ union, and it binds every employer and employee in that category and territory regardless of union membership. There is no opt-out. It sets the floor salary for the category, the annual data-base salary correction that is applied retroactively once signed, overtime premiums often above the statutory 50%, and mandatory benefits such as meal vouchers and group life insurance. Identifying the applicable CCT is the first step in setting up Brazilian payroll.

### What is eSocial, and what are the deadlines?

eSocial is the single digital channel through which Brazilian employers report labour, social security and tax data, and it feeds FGTS Digital, DCTFWeb and EFD-Reinf. Admissions must be filed by the end of the business day before the employee starts, terminations within ten days, work accident reports by the next business day, and periodic events such as remuneration and payroll closing by the 15th of the following month. DIRF, SEFIP, CAGED and RAIS have all been discontinued for private-sector employers.

### Has Brazil abolished the 6×1 working pattern and cut the week to 40 hours?

No. The statutory working week in Brazil remains 44 hours, with a maximum 8-hour day. PEC 221/2019, which would cut the week to 40 hours over a 14-month transition, with two paid rest days and no reduction in pay, was approved by the Câmara dos Deputados in two rounds on 27 May 2026 and sits in the Senate’s Constitution and Justice Committee, where the rapporteur has recommended approval in full. It still needs that committee, two rounds in the Senate plenary and promulgation before it binds anyone. It is not law today. If enacted it would raise the effective hourly cost of Brazilian labour by roughly 10%, so it is worth budgeting for rather than ignoring.

### Do we need a Brazilian entity to hire in Brazil?

Yes. Employing someone under the CLT requires a Brazilian legal entity with a CNPJ, because eSocial, FGTS Digital and DCTFWeb are all keyed to one and there is no mechanism for a non-resident entity to be an eSocial employer. The usual route is a subsidiary, typically a Ltda.; a branch requires federal executive authorisation and is slower. An [Employer of Record](https://topsourceworldwide.com/employer-of-record/brazil/)
 removes the need to hold the entity, though the end client can still carry subsidiary liability under TST Súmula 331.

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