Employer of Record in Brazil

An Employer of Record (EOR) in Brazil legally employs your workers in that country. They handle all the local HR tasks. This includes payroll, taxes, benefits, and compliance with Brazilian labor laws. You get to manage your team's day-to-day work without setting up a local entity. An EOR like Rivermate makes hiring in Brazil simple.

How an Employer of Record (EOR) Works in Brazil

Using an EOR in Brazil follows a straightforward process. You find the talent, and the EOR handles the rest.

• You Find the Candidate: You recruit and select the best person for the job.
• EOR Hires the Employee: The EOR legally hires the employee in Brazil under a compliant local employment contract.
• Onboarding: The EOR manages the entire onboarding process. They collect necessary documents and ensure everything is in order.
• HR and Payroll: The EOR processes payroll, withholds taxes, and manages benefits according to Brazilian law.
• Ongoing Compliance: The EOR stays up-to-date with Brazil's changing labor regulations to keep your business compliant. You can find official information on labor laws from the Brazilian Ministry of Labour and Employment (https://www.gov.br/trabalho-e-emprego/pt-br).
• You Manage Your Team: You direct your employee's daily tasks and responsibilities, while the EOR handles the HR administration.

Why use an Employer of Record in Brazil

Using an EOR in Brazil simplifies your expansion into one of Latin America's largest markets. It saves you time and money. You avoid the complex and lengthy process of establishing a legal entity in the country. This allows you to enter the market and start operations much faster.

• Avoids Entity Setup: You can hire in Brazil without the cost and complexity of creating a local company.
• Ensures Compliance: EORs are experts in Brazilian labor law. They ensure your hiring practices are fully compliant with all regulations. This includes complex rules around contracts, termination, and mandatory benefits.
• Manages Payroll and Taxes: The EOR handles all salary payments, tax withholdings, and social security contributions. Brazil's tax system is notoriously complex, and an EOR navigates it for you. You can learn more about the tax system from the official Brazilian government portal (https://www.gov.br/pt-br).
• Offers Local Benefits: An EOR provides your employees with competitive and compliant benefits packages. This includes health insurance, vacation time, and the 13th-month salary bonus.
• Reduces Risk: You minimize legal risks associated with international employment. The EOR takes on the responsibility as the legal employer.

Rivermate's transparent pricing model eliminates complexity with a single, competitive monthly fee per employee. Unlike traditional PEO providers, our pricing in Brazil includes comprehensive HR support, benefits administration, compliance management, and access to our proprietary dashboard for real-time workforce analytics. No hidden costs, no setup fees—just straightforward pricing that scales with your business needs while ensuring full legal compliance in Brazil.

Hiring in Brazil opens doors to a large and diverse talent pool. But, navigating the country's labor laws can feel complex. This guide breaks down the essentials to help you hire in Brazil with confidence.

Employment contracts & must-have clauses

While not always legally required, it is highly recommended to have a written employment contract in Brazil. Indefinite contracts are the most common type. Your contract should be in Portuguese and use the local currency, the Brazilian Real (BRL).

Here are some essential clauses to include:

• Parties' information: Full name and details of both the employer and employee.
• Job details: A clear description of the role, responsibilities, and job title.
• Compensation: The gross salary and payment frequency.
• Working hours: The standard daily and weekly work schedule.
• Probationary period: If applicable, the duration of the trial period.
• Benefits: Details of any provided benefits like health insurance or meal allowances.
• Governing law: State that the Brazilian Labor Code (CLT) governs the employment relationship.

Probation periods

In Brazil, you can include a probationary period in the employment contract to assess a new hire. This trial period can last for a maximum of 90 days.

You can structure the probation period in a couple of ways. For example, you can have an initial 45-day period and extend it for another 45 days. However, the total duration cannot go beyond the 90-day limit. If neither you nor the employee terminates the contract by the end of the probation period, it automatically becomes an indefinite contract.

Working hours & overtime

The standard workweek in Brazil is 44 hours. This is typically structured as eight hours per day, Monday to Friday, with an additional four hours on Saturday.

• Overtime: Any work beyond the standard 44 hours is considered overtime. Employees can work a maximum of two extra hours per day.
• Overtime Pay: Overtime work on weekdays is paid at 150% of the employee's regular hourly rate. For work on holidays and weekends, the rate increases to 200%.

Certain positions, like managers and executives, may be exempt from overtime pay.

Public & regional holidays

Brazil has a number of national public holidays. In addition to these, there are also state and city-specific holidays. If an employee needs to work on a public holiday, they are entitled to double pay for that day.

Here are the national public holidays in Brazil:

Hiring contractors in Brazil

Hiring independent contractors in Brazil can be a flexible option for your business. However, it's crucial to classify workers correctly to avoid legal risks.

An independent contractor in Brazil should:

• Have the freedom to set their own work schedule.
• Use their own tools and resources.
• Be able to work for other companies simultaneously.

Misclassifying an employee as a contractor can lead to significant fines and penalties. An Employer of Record (EOR) can help you mitigate this risk. An EOR allows you to hire employees in Brazil without setting up a local legal entity. The EOR becomes the legal employer, handling all HR tasks, including payroll, taxes, benefits, and compliance with Brazilian labor laws. This ensures your workers are classified correctly and you remain compliant with local regulations.

Navigating compensation and payroll in Brazil requires a clear understanding of its unique legal and financial landscape. Brazil's system has many layers, with specific rules for pay cycles, wages, and a variety of taxes for both employers and employees. You will find that things like a 13th-month salary are a standard, legal requirement. Staying compliant is key to successfully managing a team in Brazil.

Payroll cycles & wage structure

In Brazil, you can pay your employees either monthly or bi-weekly. The most common choice is a monthly payment cycle, with payments due by the fifth business day of the following month. A key feature of Brazilian wage structure is the mandatory 13th-month salary, often called the Christmas bonus. You pay this in two parts: the first by November 30th and the second by December 20th. For employees who haven't worked a full year, this bonus is proportional to the months they have worked.

Overtime & minimums

The standard work week in Brazil is 44 hours. Any work beyond this is overtime and you must pay it at a higher rate. The law requires you to pay at least 50% more than the regular hourly wage for overtime. If an employee works on a holiday, the rate can be as high as 200% of their regular pay. Work performed at night, between 10:00 PM and 5:00 AM, also requires extra compensation, typically at least 20% more than the daytime rate.

As of January 2025, the national minimum wage is R$1,518 per month. However, it's important to remember that labor unions are common in Brazil and collective bargaining agreements can set different, often higher, minimum wages for specific industries.

Employer taxes and contributions

As an employer in Brazil, you are responsible for several payroll contributions on top of an employee's gross salary. These taxes fund social security, severance pay, and other benefits. The total contribution can be a significant addition to your payroll costs.

Employee taxes and deductions

You must withhold certain taxes and contributions directly from your employees' paychecks. These deductions are primarily for social security and income tax, and the rates are progressive, meaning they increase with the employee's salary.

In Brazil, your employee benefits package is a big deal. It’s more than just a paycheck. It includes paid time off, bonuses, and contributions to social security. Brazilian labor laws set minimums for what you must offer. Many companies provide extra benefits to attract and keep the best talent. Understanding these benefits is key to hiring in Brazil.

Statutory Leave

Brazilian laws provide several types of paid leave for employees.

• Annual Leave: After one year of work, employees get 30 days of paid vacation. They also receive a vacation bonus, which is an extra one-third of their monthly salary.
• Sick Leave: You must pay for the first 15 days of an employee's sick leave. After that, the National Institute of Social Security (INSS) takes over the payments.
• Maternity and Paternity Leave: Mothers get 120 days of paid maternity leave. Fathers are entitled to 5 days of paternity leave.
• Other Leave: Employees can also take paid time off for events like a marriage or the death of a close family member.

Public Holidays & Regional Holidays

Brazil has a number of national public holidays. States and cities can also have their own official holidays.

Note: Carnival is a multi-day event, and the exact dates can vary. Some holidays are optional "ponto facultativo" days where the day off is common but not legally required.

Typical Supplemental Benefits

You must provide statutory benefits. To compete for top talent, most companies offer more.

How an EOR Can Help with Setting Up Benefits

Setting up a competitive and compliant benefits package in Brazil is complex. Labor laws are detailed and can change. An Employer of Record (EOR) simplifies this for you.

An EOR acts as the legal employer for your team in Brazil. We handle all the administrative work.

• Compliance: We make sure your benefits package meets all of Brazil's legal requirements. This includes everything from calculating the vacation bonus to making the correct social security contributions.
• Administration: We manage the entire benefits process. This includes enrolling employees, processing claims, and answering questions.
• Market Knowledge: We understand what benefits are common in your industry. This helps you create an attractive package to hire and retain the best people.
• Simplicity: You get one simple invoice for all employment costs, including salary and benefits. We take care of the rest.

Using an EOR lets you focus on growing your business, not on navigating complex local laws.

Terminating an employee in Brazil requires a structured process. You can end a contract at any time, as long as you follow the rules for notice and severance pay. The termination must be in writing, dated, and signed. Brazilian labor laws allow for termination with or without cause.

Notice periods

You must provide employees with a notice period before their contract ends. The standard notice period is 30 days. For every year an employee has worked for your company, you add an extra three days of notice. This can go up to a maximum of 90 days.

In some cases, you can terminate an employee for just cause without giving notice. This usually involves serious misconduct, such as a deliberate breach of confidential information.

If you decide to terminate a contract without notice, you must pay the employee 50% of the salary they would have earned for the remainder of the contract term.

Severance pay

When you terminate an employee without cause, they are entitled to several payments. These payments include:

• Their final salary for time worked.
• Unused vacation time, plus a vacation bonus.
• A proportional part of their 13th-month salary.
• Their balance from the Government Severance Indemnity Fund (FGTS).
• An additional 40% of the total amount deposited into their FGTS fund during their employment.

Employees who resign are entitled to their accrued benefits, but not the FGTS payout or unemployment funds. If an employee resigns and does not work their notice period, you can deduct one month's salary from their final pay.

How Rivermate handles compliant exits

Navigating employee terminations in a different country can be complex. We handle the entire process to make sure everything is compliant with Brazilian law.

Here’s what we do:

• Documentation: We prepare and manage all necessary termination documents. This includes the termination letter and forms for unemployment benefits.
• Calculations: We calculate all final payments, including severance, accrued vacation, and bonuses.
• Compliance: We ensure every step of the offboarding process follows the latest labor regulations.

We take care of the details so you can focus on your business.

Getting the right visas and work permits in Brazil is essential for any company hiring foreign talent. The process is managed by the Ministry of Labor and Employment. Employers are responsible for starting the application process for their employees. Foreign nationals need both a residence permit and a work visa to be legally employed in Brazil.

Employment visas & sponsorship realities

An Employer of Record (EOR) can help you hire employees in Brazil without setting up a local legal entity. They handle visa sponsorship, ensuring your employees have the correct work authorization. This simplifies the process and helps you stay compliant with Brazilian labor laws.

The most common work visa is the Temporary Work Visa (VITEM V). It is typically valid for up to two years and is for foreign nationals with a Brazilian employment contract. An EOR can sponsor this visa on your behalf.

Keep in mind that Brazil has rules about how many foreign employees a company can have. At least two-thirds of the workforce must be Brazilian nationals. This means you will need to justify hiring a foreign worker over a local candidate.

Here are some of the visa types an EOR can help you with:

• Temporary Work Visas: For employees with a local contract.
• Intra-Company Transfer Visas: For transferring employees from another country.
• Permanent Work Visas: For long-term or key strategic roles.

Business travel compliance

For short-term business trips, you might need a Visitor Visa (VIVIS). This visa is for activities like attending meetings, signing contracts, or attending corporate events. You cannot receive payment from a Brazilian company while on this visa. The stay is usually limited to 90 days.

As of April 10, 2025, citizens from the United States, Australia, and Canada will need a visitor visa to enter Brazil for business or tourism. You can apply for an e-Visa online. The process is designed to be quick and straightforward.

Here’s what you generally need for a business visa application:

• A valid passport
• A roundtrip ticket or itinerary
• A business letter from your company explaining the purpose of your trip
• An invitation letter from the company in Brazil

Always check the latest requirements with the nearest Brazilian Embassy or Consulate before you travel.