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Brazil – Employer of Record

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Introduction – Brazil

Capital –  Brasilia
Currency –  Brazilian Real (BRL)
Population –  212.6 million
GDP –  $1.445 Trillion USD
Language –  Portuguese
Major Religions –  Christianity (Catholic)

Brazil, officially Federative Republic of Brazil, is located in South America. It occupies half the continent’s landmass. It is the fifth largest country in the world, exceeded in size only by Russia, Canada, China and the US, though its area is greater than that of the 48 conterminous U.S. states. Brazil faces the Atlantic Ocean along 4,600 miles (7,400 km) of coastline and shares more than 9,750 miles (15,700 km) of inland borders with every South American country except Chile and Ecuador.

Brazil contains most of the Amazon River basin, which has the world’s largest river system and the world’s most-extensive virgin rainforest. Brazil has been the world’s largest exporter of coffee for more than 150 years. It supplied around 80 per cent of the world’s coffee in the 1920s; that figure has fallen to around a third.

Brazil is home to 7 natural and 14 cultural UNESCO World heritage Sites.

Contract of Employment

Employment contracts in Brazil can be written or orally agreed. It is best practice to put all employment agreements in writing in local language (Portuguese) outlining all the terms of employment, the salary, benefits, bonuses, notice periods and termination criteria. The salary should be stated in Brazilian Reals (BRL) as opposed to foreign currencies.

Probation Period

Up to a maximum of 3 months.


Notice period in Brazil is governed by the employment agreement. In general it is 30 days either side, increasing by 3 days for each additional year of service, up to a maximum of 60 days.

Working Hours

Monday to Friday, 44 hours per week.


Overtime must be stipulated in the employment agreement and is generally limited to 2 hours per day. Overtime is paid at 1.5x the salary rate. Working on a holiday is paid at 2x the salary rate.

Annual Leave

Annual leave in Brazil is 30 days per year once an employee has completed 12 months of service.

Sick leave

Employees are entitled to paid sick leave, the first 15 days are paid by the employer at 100% of the salary rate. Thereafter the employee is paid for sick leave by the social security (INSS). An employee must provide a sick leave certificate within 48 hours of the sickness.

Maternity Leave

Female employees in Brazil are entitled to 120 days of maternity leave. The maternity leave is paid by the social security (INSS). Maternity leave can be extended to 180 days if the employer is enrolled in the Empresea Cidada government scheme.

Paternity leave is 5 days, paid in full by the employer.


VAT in Brazil is between 17% and 19% depending on the region.

17% – Acre, Alagoas, Ceará, Espírito Santo, Goiás, Mato Grosso, Mato Grosso do Sul, Pará, Piauí, Rondônia, Roraima and Santa Catarina.

18% – Amazonas, Amapá, Bahia, Distrito Federal, Maranhão, Minas Gerais, Paraíba, Paraná, Pernambuco, Rio Grande do Norte, Rio Grande do Sul, São Paulo, Sergipe and Tocantins.

19% – Rio de Janeiro

Income Tax

Income tax in Brazil is tiered as follows:

0 to 1,903.98 BRL – 0%
1,903.99 to 2,826.65 BRL – 7.50%
2,826.66 to 3,751.05 BRL – 15%
3,751.06 to 4,664.68 BRL – 22.50%
4,664.69 BRL and above – 27.50%

Employer/Employee Contributions 

Employer contributions are between 28% and 32.50%.

–  FGTS (severance indemnity fund) – 8%
–  INSS (social security contribution) – 20% – 24.50%

Employee contributions are between 7.50% and 14%.

–  Social security – up to 1,100.00 BRL – 7.50%
–  Social security – from 1,100.01 BRL to 2,203.48 BRL – 9.00%
–  Social security – from 2,203.49 BRL to 3,305.22 BRL – 12.00%
–  Social security – from 3,305.23 BRL to 6,433.67 BRL – 14.00%

13th Month Salary

A 13th month salary is mandatory in Brazil and is paid at the end of the year. Employees who have worked 12 months receive a full months salary paid to them in two equal instalments over November and December. For employees who have worked less than 12 months a pro-rated 13th month salary is paid out in November and December.

Public Holidays

There are 13 paid public holidays in Brazil.

Severance Pay

Severance pay is mandatory in Brazil and is normally 1 month of pay for every year of service, the employee will also be compensated by the FGTS (severance fund). The payment for severance must be made within 10 days of the employees last working day.

Work and Residence Permits (Expatriates)

All foreigners in Brazil need to apply for a work permit and a residence permit. The work permit applied for by the local employer in Brazil through the Ministry of Labour by submitting the employment agreement and the personal documentation of the employee. The residence permit also applied for by the local employer in Brazil by applying through the National immigration Council. A residence permit is usually granted for a period of 2 years and can then be extended subject to the holder meeting the requirements of the Brazilian authorities.

Article 142 and decree 9,199/2017 of the resolutions set out by the National Immigration Council deal with the requirements of the residence permit.

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