What does a $60,000 hire cost in Brazil?
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Statutory contributions and typical benefits for an employee in Brazil at $60,000 base salary.
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Key Takeaways for Hiring in Brazil
- Employment contracts must be bilingual (Portuguese and English) with detailed terms on probation, notice, and compensation
- Employees receive a mandatory 13th-month salary (Christmas bonus) paid in two installments, typically in November and December
- FGTS (severance fund) requires 8% employer contribution monthly, with a 40% penalty paid upon termination without cause
- Vacation pay must be at least one-third higher than regular earnings, and unused vacation after 12 months triggers double pay
Continent
South America
Capital
Brasília
Currency
Brazilian Real (BRL)
Language
Portuguese
Payroll Cycle
Monthly
Pay Date
5th of the following month
VAT
17%
What Should You Know Before Hiring in Brazil?
Employment in Brazil is governed by the CLT (Consolidação das Leis do Trabalho), the federal labor code that sets mandatory minimums for contracts, working hours, paid leave, the 13th-month salary, and severance (FGTS). Understanding these rules is the first step to hiring compliantly.
Brazil Employment Contract Overview
Brazilian employment contracts follow structured rules under the CLT. Here’s what a standard contract covers and the conditions that apply.
| Element | Details |
|---|---|
| Contract type | Fixed-term (renewable once) or open-ended |
| Local language required? | Yes — contracts must be in Portuguese |
| Bilingual? | Portuguese and English |
| Probation period | 90 days (renewable once) |
| Minimum paid time off | Up to 30 days, scaled by unexcused absences (5 or fewer: 30 days; 6–14: 24; 15–23: 18; 24–32: 12; over 32: none) |
| Public holidays | Eight public holidays |
| Notice period | 30 days minimum, rising 3 days per year of service after the first year, up to a maximum of 90 days |
What Do You Need to Include in a Brazilian Employment Contract?
To stay compliant, every Brazilian employment contract should set out these essentials:
- Full name
- ID number
- Role / job title
- Start date
- Contract duration
- Working hours
- Probation and notice conditions
- Termination provisions
- Compensation details
How Does Payroll Work in Brazil?
Payroll in Brazil runs monthly under the CLT, with strict rules on timing, the mandatory 13th-month salary, and employer social contributions.
| Category | Details |
|---|---|
| Salaried employees | Paid monthly, typically by the 5th business day of the following month |
| 13th salary | Mandatory annual bonus equal to one month’s salary, paid in two installments (November and December) |
| Average employer tax | 28.00%–30.50% of gross salary |
Tax Breakdown
| Category | Rate / Details |
|---|---|
| VAT | Standard rate of 17% |
What Employee Benefits Are Mandatory in Brazil?
Brazil mandates a robust set of statutory benefits, funded through payroll contributions and general taxation. Employers must comply for local and expatriate staff alike, unless exempt under a bilateral agreement.
| Benefit | Provider | Funded through | Notes |
|---|---|---|---|
| Health insurance | Government | General tax revenues | Brazil’s public healthcare system (SUS) provides free, universal access to healthcare for everyone in the country — Brazilians and foreigners alike, regardless of income. |
| Pension / social security | Government | Payroll contributions | Mandatory for all employees. INSS contributions fund retirement, disability, maternity leave and other social benefits; both employer and employee contributions are compulsory. |
| Other statutory benefits | Government / employer | Payroll contributions / additional cost | FGTS acts as a severance fund (accessible on dismissal without cause, retirement or serious illness), and the 13th-month salary is mandatory. |
Employment of expats is supported: individuals from abroad must first secure a temporary visa and submit a residence application within 90 days of arriving. Residence visas are typically issued for up to two years and can be extended.
What Leave Are Employees Entitled to in Brazil?
Brazil provides comprehensive leave entitlements — annual vacation, public holidays, sick leave, parental leave and other special categories — all set by the CLT.
Annual Leave
Employees can receive up to 30 days of paid vacation per year, scaled by unexcused absences. Eligibility begins after 12 months of service, and vacation pay must be at least one-third higher than regular earnings.
| Unexcused absences | Vacation days |
|---|---|
| Five or fewer | 30 days |
| Six to 14 | 24 days |
| 15 to 23 | 18 days |
| 24 to 32 | 12 days |
| Over 32 | No vacation granted |
If vacation isn’t granted within 12 months of being earned, the employee is owed double pay when taken. Leave can be split into up to three parts (one of at least 14 consecutive days), cannot be carried over, and up to one-third may be converted to cash.
Public Holidays
Employees are granted eight nationwide public holidays:
- January 1 — New Year’s Day
- April 21 — Tiradentes Day
- May 1 — Labor Day
- September 7 — Independence Day
- October 12 — Our Lady of Aparecida Day
- November 2 — All Souls’ Day
- November 15 — Proclamation of the Republic Day
- December 25 — Christmas Day
Employees may also be entitled to local or regional holidays based on their place of work.
Sick Leave
For non-work-related illness, the employer pays full salary for the first 15 days; beyond that, Social Security takes over. Employees are protected from termination for up to one year after returning from Social Security sick leave.
Maternity Leave
Female workers are entitled to 120 days of paid maternity leave, which may begin up to one month before delivery. The employer pays initially and is reimbursed by social security. Mothers are protected from dismissal without just cause until five months after birth, with two daily half-hour breastfeeding breaks until the child is six months old.
Paternity Leave
Fathers are entitled to five days of paid paternity leave.
Other Types of Leave
Marriage leave: three days of paid leave. Bereavement leave: two days of paid leave on the death of a spouse, parent, child, sibling or other dependent.
How Do Terminations and Resignations Work in Brazil?
Terminating employment in Brazil involves detailed rules on notice, severance, FGTS penalties and documentation. The route — resignation, dismissal with or without cause, or mutual agreement — determines what’s owed.
| Termination type | Possible under EOR? |
|---|---|
| Termination for cause (misconduct, etc.) | Yes |
| Termination without cause | Yes |
| Mutual termination agreement (MTA) | Yes |
| Redundancy | Not possible under the EOR setup |
Employee Resignation
The employee submits a signed, dated resignation letter and gives at least 30 days’ notice (CLT Art. 487). On resignation, the worker forfeits the full severance that applies to dismissal without cause, and the 40% FGTS penalty and unemployment insurance are not paid.
Dismissal With Cause
Just-cause dismissal requires no prior notice and pays no severance — employees are not eligible for prorated vacation pay or the year-end bonus. Acceptable grounds under CLT Article 482 include dishonesty or misconduct, criminal conviction leading to imprisonment, gross negligence, habitual intoxication at work, breach of confidentiality, insubordination, and unauthorised absence of 30 days or more.
Dismissal Without Cause
The employer gives written, dated notice stating the termination is without cause. A fine equal to 40% of the FGTS balance is due, and the employee may withdraw the full FGTS balance — alongside the salary balance, proportional 13th salary, and accrued/proportional vacation plus the one-third bonus.
Mutual Termination Agreement
Under CLT Article 484-A, both parties may end the contract by agreement with reduced obligations: half the notice value and a reduced 20% FGTS fine, with the employee able to withdraw up to 80% of the FGTS balance.
Final Payment Deadline
With notice worked, final dues are paid by the first business day after the notice period ends. With indemnified notice, payment is due within 10 calendar days of the termination date.
Termination Documentation
Brazilian terminations require formal paperwork — typically the TRCT (Termo de Rescisão do Contrato de Trabalho), the final payslip (holerite de rescisão), an updated CTPS, and FGTS statements. Dismissals without cause also require an unemployment-insurance form.
Supporting Guides
Frequently Asked Questions
How does the FGTS system work?
FGTS (Fundo de Garantia do Tempo de Serviço) is a mandatory severance fund. You contribute 8% of the employee’s monthly salary to their FGTS account. When you terminate without cause, you pay an additional 40% penalty on the total accumulated balance, and the employee can withdraw their full FGTS balance. In resignations, the employee can’t access the funds and you don’t pay the penalty.
The 13th-month salary has two payment dates?
Yes. The first installment must be paid between February 1 and November 30 (usually paid in November). The second installment must be paid by December 20. It’s equivalent to one month’s wages split into two payments.
Vacation pay is one-third higher than regular pay?
Correct. Vacation pay must include a constitutional bonus of one-third (⅓) above the employee’s regular earnings. So if someone earns BRL 3,000/month, their vacation pay is BRL 4,000 (3,000 + 1,000).
What happens if I don’t grant vacation within 12 months?
You must pay double the usual vacation pay when the employee finally takes it. This is a penalty for not granting earned vacation within the required timeframe. Vacation cannot be carried over to the next year.
Can employees really sell back vacation days?
Yes. Employees can choose to receive cash payment instead of using up to one-third of their vacation days. So for 30 days of earned vacation, they can sell back 10 days and take 20 days off.
Notice periods increase with tenure. How does that work?
For terminations without cause: start at 30 days minimum, then add three days for each year of service beyond the first year, capping at 90 days. So someone with five years tenure gets 42 days’ notice (30 + 12). For resignations, it’s flat 30 days regardless of tenure.
Sick leave protection for a full year after returning?
Yes. If an employee receives Social Security sick leave benefits (which kick in after 15 days), they’re protected from termination for up to one year after resuming work. This prevents employers from firing people immediately after they return from extended illness.
Why are there so many termination documents?
Brazilian labor law is documentation-heavy to protect employee rights. The TRCT, CTPS update, FGTS statements, and various receipts all serve as official proof of proper termination and payment. Missing any of these can result in labor disputes or fines.
