Employment Law

Brazilian Employment Contract

When recruiting in Brazil, both verbal and written arrangements are available, but we always recommend that you provide a formal written employment contract. The contract should be in Portuguese (the official language of Brazil) and contain all details of the agreement, such as salary/wages (expressed in real currency), rights and benefits.

Working with our Brazilian PEO, Remoly's team of local experts can provide assistance in drafting strong employment contracts that comply with local regulations.

Fixed Term

Indefinite

Working Hours in Brazil

The legal working week for Brazilian employees is 44 hours. Typically, four hours on Saturday are included in addition to the standard eight hours Monday through Friday, but the schedule may vary during the week.

Employment Benefits in Brazil

It is always important to understand what benefits your employees in Brazil are legally entitled to or expect to receive. Our Brazilian Employer of Record and PEO provide support in managing the following areas:

Brazil Vacation

Employees in Brazil can enjoy 30 days of vacation per year after one year of service. They are also entitled to a holiday bonus of one-third of their normal monthly salary.

Brazilian Sick Leave

Employees in Brazil are entitled to regular wages from their employer during the first 15 days of illness (a medical certificate is required). They can then receive payments from a social program called INSS.

Maternity and Paternity Leave in Brazil

Mothers in Brazil are legally entitled to four months of maternity leave and cannot be fired during the entire pregnancy or within a year after the birth of the child, with full pay and benefits paid throughout. In certain circumstances, employers can extend the four-month period by 60 days and write off the payment as a tax deduction.

Fathers can take up to five days of paid leave.

Employee Severance Pay and Termination of Contracts in Brazil

The employer or employee must give 30 days' written notice of termination, or pay equivalent. Employees are entitled to an additional three days' notice after one year of service and three additional days' notice for each year of service, up to a maximum of 60 days (90 days in total).

Severance pay must include 13th month salary, unused vacation payment and any other related benefits, all of which are calculated on a pro-rata basis. Employees also receive payments from the State Unemployment Fund (FGTS) when they are laid off by their employer. Employers contribute 8% of wages to this fund, which employees receive upon dismissal. If the contract is terminated without just cause, the employer must pay an additional 40% of the total funds to the employee and 10% to the government.

For companies expanding overseas for the first time, dealing with employee layoffs and dealing with severance packages can be complicated. Remoly's Brazilian PEOs can reduce risk for foreign companies and provide guidance along the way.

Brazilian Taxes

Employers can expect to pay additional contributions of approximately 80% on top of each employee's salary.

Brazil’s corporate tax rate is 15%, but a 10% surcharge is imposed on annual taxable income exceeding R$240,000.

Health Insurance in Brazil

as part of its employment benefits package.

In some cases, employees are actually entitled to private health insurance. This will depend on the collective bargaining agreement (union) of the industry in which the hiring company operates. In Brazil, health insurance is provided by the government, so employees have access to most medical services as standard. However, many companies do choose to offer private insurance

Additional Benefits of Brazil

Employees in Brazil are entitled to "transportation vouchers" for transportation to and from the office, worth 6% of the employee's salary. This is a mandatory allowance.

Some employees are also entitled to "meal vouchers" that can be used to purchase food. Whether an employee is entitled to meal vouchers and how much they are worth is usually determined by the collective agreement (union) of the employee's industry. Every situation will be different.

Salary and Benefits

Brazilian Compensation Law

The minimum wage in Brazil is 937 Brazilian Reals (approximately US$165) per month. Pay details should always be clearly included in your employment contract. As an employer in Brazil, you may also be pressured by your unions to demand regular pay increases.

Employers in Brazil usually also pay the 13th month's salary, whereby workers receive an extra month's salary in two parts, November and December.

Benefits Administration in Brazil

As a foreign employer, setting up the Brazilian benefits system can be difficult. The law is complex, there are potential language barriers to all negotiations, and legislation can change regularly. These factors can make it a very time-consuming process.

A great solution is to outsource your Brazilian benefits administration to Remoly's Brazilian PEO. We'll help you get everything organized, compliant, and running as quickly as possible so you can focus on scaling.