Brazil
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Learn about local payroll, taxes, and employment laws in Brazil
Minimum Wage Standards
The national minimum wage in Brazil is R$1,518 per month (2025). Brazilian employees receive 13 monthly salary payments per year, with the mandatory 13th month salary split into two installments paid in November and December.
The minimum wage is reviewed and adjusted annually by the federal government, typically taking effect on January 1st.
Income Tax Structure
Brazil's individual income tax (IRPF - Imposto de Renda Pessoa Física) follows a progressive rate structure ranging from 0% to 27.5%. Monthly earnings up to R$2,428.80 are exempt from income tax.
| Monthly Taxable Income | Income Tax Rate |
|---|---|
| Up to R$2,428.80 | 0% |
| R$2,428.81 - R$3,561.50 | 7.5% |
| R$3,561.51 - R$4,664.68 | 15% |
| R$4,664.69 - R$6,220.00 | 22.5% |
| Over R$6,220.00 | 27.5% |
Employer Contributions
Total employer social contributions in Brazil amount to approximately 30-40% of the employee's gross salary, depending on the industry and company size.
Mandatory Employer Contributions:
- INSS (Social Security): 20% of gross payroll
- FGTS (Severance Indemnity Fund): 8% of gross salary
- SENAC/SESC/SENAI/SESI: Additional contributions varying by sector
Employee Contributions:
- INSS (Social Security): 7.5% to 14%, progressive rates capped at R$951.63/month
Important Note: These figures are estimates for informational purposes. Actual costs vary based on employment terms, industry sector, and specific circumstances. Contact our team for accurate calculations tailored to your situation.
Overtime & Working Hours
Standard working hours in Brazil are 8 hours per day and 44 hours per week. Employees are entitled to a mandatory 13th month salary, paid in two installments in November and December.
Overtime is limited to a maximum of 2 hours per day, compensated at 150% of the regular hourly rate. Work performed on weekends and public holidays is compensated at 200% of the regular hourly rate.
Maternity Leave
Female employees are entitled to 120 days of maternity leave with full pay. Companies participating in the Empresa Cidadã program may extend maternity leave to 180 days.
Maternity leave is paid at 100% of the employee's salary by the employer, who is then reimbursed by INSS (Social Security). Pregnant employees are protected from dismissal from the confirmation of pregnancy until 5 months after childbirth.
Paternity Leave
Fathers are entitled to 5 days of paid paternity leave. Companies enrolled in the Empresa Cidadã program may extend paternity leave to 20 days.
Sick Leave
For the first 15 days of illness, the employer is responsible for paying the employee's full salary. After the 15th day, the employee transitions to INSS (Social Security) benefits.
INSS sickness benefits can be paid for up to 24 months, depending on the nature and severity of the condition. A medical certificate is required to justify the absence.
Annual Leave
Employees are entitled to 30 calendar days of paid annual leave per year, provided they have no more than 5 unexcused absences during the accrual period.
Vacation pay consists of the employee's regular salary plus a mandatory bonus of one-third (1/3) of the salary amount. Employees may split their vacation into up to 3 periods, with at least one period being a minimum of 14 consecutive days.
Termination Framework
There is no at-will termination in Brazil. Employers must have just cause to terminate without severance, or pay full severance for termination without cause.
Valid grounds for just cause termination include:
- Dishonesty or acts of bad faith
- Misconduct or inappropriate behavior
- Habitual drunkenness (on or off the job)
- Insubordination or indiscipline
- Abandonment of employment (30+ consecutive days of absence)
Legal Requirement: Termination without just cause requires the employer to pay full severance, including 40% of the FGTS balance, notice period pay, prorated 13th salary, and unused vacation with the 1/3 bonus.
Notice Period Requirements
The minimum notice period is 30 days. For each year of service with the employer, an additional 3 days of notice is added, up to a maximum total of 90 days.
If the employer opts not to have the employee work during the notice period, the full notice period pay must still be provided.
Severance Compensation
Termination Without Cause:
- 40% penalty on the total FGTS balance
- Notice period pay (30 days + 3 days per year of service, max 90 days)
- Prorated 13th month salary
- Unused vacation days plus the 1/3 vacation bonus
Termination With Just Cause:
- Prorated 13th month salary only
- Unused vacation days plus the 1/3 vacation bonus
Mutual Agreement Termination:
- Half of the notice period pay
- 20% penalty on the FGTS balance (instead of 40%)
Risk Management: To minimize unforeseen financial exposure from terminations, our employer of record service includes a Severance Reserve for all employment agreements. Unused reserve amounts are returned to you if employees resign or are not entitled to severance.
Paid Annual Leave
Employees are entitled to 30 calendar days of paid annual leave per year, provided they have no more than 5 unexcused absences during the accrual period.
Vacation can be split into up to 3 periods, with at least one period being a minimum of 14 consecutive days. The remaining periods must each be at least 5 consecutive days.
Public Holidays
Brazil observes 12 national public holidays annually.
National public holidays include:
- New Year's Day (January 1)
- Carnival (2 days, varies annually)
- Good Friday (varies annually)
- Tiradentes Day (April 21)
- Labor Day (May 1)
- Corpus Christi (varies annually)
- Independence Day (September 7)
- Our Lady of Aparecida (October 12)
- All Souls' Day (November 2)
- Republic Day (November 15)
- Black Consciousness Day (November 20)
- Christmas Day (December 25)
Onboarding Timeline
The onboarding process is typically completed within 2-5 business days following client execution of the Statement of Work.
Compensation Structure
Salaries in Brazil are paid on a monthly basis. The mandatory 13th month salary is split into two payments: the first installment is paid in November, and the second installment is paid in December.
Employees also receive a vacation bonus equivalent to one-third (1/3) of their monthly salary, paid when they take their annual leave.
Employment Contract Specifications
A written employment contract is mandatory in Brazil and must be drafted in Portuguese. All employment relationships are governed by the CLT (Consolidação das Leis do Trabalho - Brazilian Labour Code).
Essential contract elements include:
- Employee and employer identification
- Commencement date
- Job title and description
- Compensation and benefits
- Working hours and schedule
- Duration (for fixed-term contracts)
- Termination provisions
Fixed-term contracts have a maximum duration of 2 years. Beyond this period, the contract automatically converts to an indefinite-term agreement.
Probationary Period
The maximum probation period in Brazil is 90 days. This can be structured as an initial period of 45 days, renewable once for an additional 45 days.
During the probation period, either party may terminate the employment relationship without providing a specific reason or paying severance, though proper notice must be given.
How it works
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You choose the talent
You select the candidate you want to hire, anywhere in the world.
We employ them for you
MB Remote becomes the legal employer and handles contracts, payroll, and local labor laws.
Your team starts working
Your employee works directly with you, just like an in-house team member.
We manage compliance
We ensure ongoing payroll, taxes, and legal compliance in the employee’s country.
Frequently Asked Questions
These are the most commonly asked questions about the Employer of Record
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Is it free to contact MB Remote?
Yes. Contacting us is completely free and without obligation. We’ll discuss your needs and explain how our EOR solution works before anything else.
How long does it take to hire an employee?
Hiring can usually be completed within a few days, depending on the country and local requirements.
What is an Employer of Record (EOR)?
An Employer of Record is a legal entity that employs workers on your behalf. MB Remote handles contracts, payroll, taxes, and local labor law compliance, while you manage the day-to-day work.
Who is the legal employer of the employee?
MB Remote is the legal employer, but the employee works exclusively for you as part of your team.
In which countries can you hire employees?
We support hiring in multiple countries. Contact us to check availability for a specific location.
How does payroll work?
We manage payroll, taxes, and social contributions in compliance with local regulations. You receive one simple monthly invoice.
Is my company still in control of the employee?
Yes. You manage tasks, schedules, and performance. We handle the legal and administrative side.