Brazil
Before hiring
Before hiring employees in Brazil, there are some key things you’ll need to know. Firstly, the notice period in Brazil is typically 30 days. It’s longer for employees who have been employed for over a year, but it can be halved if the termination is under mutual consent.
It’s also important for employers to understand Brazil’s complex paid holiday structure, and the 13th month salary bonus that is paid in two halves during the year.
We know keeping track of all this might sound overwhelming—but it doesn’t have to be. A solution like Oyster eliminates the barriers for you. With Oyster, you can automate compliance across 180+ countries, easily managing HR and payroll—all in one, easy-to-use platform.
Get an overview of what you need to know when hiring in Brazil below.
At a Glance
CURRENCY
BRL
OFFICIAL LANGUAGE
PORTUGUESE
PAYROLL FREQUENCY
MONTHLY, BI-WEEKLY
EMPLOYER TAXES
35-40%
13th / 14th SALARY
Brazilian employees receive a 13th month bonus (half paid in July and half paid in December) and a holiday bonus (a third of a month’s salary) when holiday is taken).
Good to know
- Ending employment in Brazil takes time and is expensive. Notice periods start at 30 days, and termination costs include severance payment and a stiff penalty for any dismissal not for cause.
- A holiday of 30 days is granted to employees after 12 months of working. This holiday must be taken in the following 12 months. Employees in Brazil also receive a holiday bonus (aka vacation premium) that is equal to one-third of a month's salary. Additionally, there is a mandatory 13th month salary bonus that’s equal to one month of pay and is paid in two equal parts: one half in July and the other half in December.
- The notice period in Brazil is typically 30 days. But it’s longer for employees employed for over a year. It can be halved if the termination is under mutual consent.
Employment in
Brazil
A workweek in Brazil is eight hours per day or 44 hours per week.
Any hours worked in excess of eight per day is considered overtime and is paid at the rate of 150% of the regular pay. Work on a holiday is paid at the rate of 200% of the regular pay.
Overtime is limited to up to two hours per day.
The positions that are exempt from the overtime requirement are those who occupy a position of trust (e.g. management, supervisors, anyone who has a high-level position in a company) and those who work outside of an office (e.g. field sales reps, employees working from home).
In Brazil, the probation period is 45 days, but can be extended to 90 days.
In Brazil, the notice period for dismissals is 30 days for employees in their first year, plus three additional days for each additional year worked (up to a maximum of 60 additional days).
For resignations, the notice period is 30 days.
The notice period is halved if the termination is under mutual consent.
Non-compete agreements in Brazil can be no longer than two years, and must spell out the scope and terms clearly in writing. Such agreements can be enforced by an employer in return for the payment of a fair indemnification to the employee, which can vary between cases.
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Paid time off
In Brazil, employees who have been employed for at least one year (the "accrual period") are entitled to 30 days of paid annual leave in the following year.
If paid leave is not taken within the year, employers must pay double salary for the vacation period, as well as allow the employee to carry over the right to take the vacation to the next year.
This leave can be split into a maximum of three periods, where one of the periods must be at least 14 days and the other two must be for at least five days. Employees in Brazil have the option of cashing in up to 10 days of leave each year.
Additionally, employees receive a holiday bonus when they take their holiday in an amount equal to one-third of their monthly salary.
There’s also a mandatory 13th month salary that’s equal to one month of pay and is paid in two equal parts, one half in July and the other half in December.
Employees are entitled to fully paid sick leave. For the first 15 days of leave, the employer pays 100% of the employee’s salary. Any further days off are paid by social security (INSS; up to 6,101 BRL).
Employees in Brazil are entitled to 120 days of fully paid maternity leave. This leave is paid by the employer, who can claim payment back through deductions on social security payments.
If the employer is enrolled in the government scheme (Empresa Cidadã), maternity leave can be extended to 180 days.
Employees are also entitled to five days of fully paid paternity leave, paid for by the employer. If the employer is enrolled in Empresa Cidadã, paternity leave can be extended to 20 days.
After this, parents can take another 32 weeks of leave (shared between both parents), which is paid at a lower monthly rate.
Employer tax
The total social contributions for employers in Brazil are between 35% and 40%. This includes social security, severance indemnity, and other common contributions like life Insurance, labour accident insurance, meal allowance, medical and dental, and social assistance.
Individual tax
Employees in Brazil are taxed between 0% and 27.5% depending on their income bracket. Employees also pay 14% in social security contributions.
Termination of employment
There is no mandatory severance pay in Brazil, however an employee must receive pro rata amounts of holiday pay, 13th month pay, and vacation pay. An employer can also provide pay in lieu of notice.
Each month, employers must contribute 8% of an employee's salary to the Severance Fund (FGTS), which employees may access upon dismissal. However, when terminating an employee without just cause, an employer must also pay a penalty into the fund in the amount of 40% of the balance in the employee's FTGS account. When the separation is mutually agreed, the employer still must pay a 20% penalty.
Start hiring employees in
Brazil
Setting up a business entity everywhere you want to hire a new employee isn’t scalable—it takes too long and the legal fees are high. At the same time, understanding and adhering to the local labor laws and employee expectations can be complex and time consuming. And it’s hard to find reliable information on up-to-date employment information for all the countries where you’re considering hiring. Not to mention tracking down invoices and managing employee contracts over email and spreadsheets—that gets messy fast.
We can’t afford to take risks when it comes to compliance—we need to make sure we follow the local guidelines, especially when it comes to taxes and legalities.
With Oyster, you can manage HR and payroll, and automate compliance across 180+ countries—all in one, easy-to-use platform.
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