If you are planning to branch out your business overseas, handling diverse compliances in countries where you wish to employ talent may be quite a difficult task to handle. Having proper knowledge of compliances and tax rules prevailing in the new territory is crucial. To gain unparalleled peace of mind while at work, using the services of a third-party platform is going to be a prudent decision. Partnering with an EOR service provider can create wonders for your business. In that way, not only will you be able to free up your resources but also keep compliance violations at bay. Keep reading this blog to know about Employer of Record Services Brazil and how an EOR partner can benefit you in cutting down costs while you embark on the journey of the expansion of your business.
Table of Contents
- Overview about Brazil
- What is an Employer of Record in Brazil
- Employer of Record vs Legal Entity
- What are the Use Cases for Availing of Services Under Employer of Record Brazil?
- Laws and Compliance Best Practices to Hire Employees in Brazil
- Best EOR Companies in Brazil
- What are EOR Services in Brazil
- EOR Brazil Services
- How to Hire Employees Through an EOR Brazil Partner
- Taxes in Brazil
- Key Considerations While Hiring Employees through EOR in Brazil
- Employee Benefits in Brazil
- Terminations in Brazil
- How to Choose the Right EOR Brazil Services?
- Benefits of Working With an Employer of Record Service Provider in Brazil
- Visa Types in Brazil
- Risks or Drawbacks of EOR Brazil
- How Does Employer of Record Brazil (EOR) Differ From Usual HR Software?
- How Much Does It Cost to Avail Services Under EOR Brazil?
- Conclusion: EOR Brazil
- FAQs – Employer of Record (EOR) Brazil
Overview about Brazil
Brazil, with its vast market, growing middle class, and skilled labor force, has emerged as a strategic destination for companies aiming to expand their global footprint. The country is known for its rich natural resources, diversified economy, and active participation in international trade. However, Brazil’s complex tax system, extensive labor regulations, and bureaucratic processes can pose significant challenges for foreign businesses. This makes Employer of Record (EOR) services a practical and efficient solution for companies looking to hire in Brazil without setting up a local entity.
What is an Employer of Record in Brazil
An Employer of Record (EOR) in Brazil is a third-party organization that serves as the official employer for a company’s workforce in the country. The EOR is responsible for hiring, onboarding, managing payroll, and ensuring compliance with Brazilian labor and tax laws. By working with an EOR, companies can hire employees in Brazil swiftly and in compliance with legal requirements, eliminating the need to establish a local subsidiary.
Employer of Record vs Legal Entity
| Criteria | Legal Entity | Employer of Record (EOR) |
| Definition | A legal entity is a business or organization that is legally registered to operate in a specific jurisdiction and can hire employees directly. | An Employer of Record (EOR) is a third-party service provider that legally employs workers on behalf of another company. The EOR handles compliance, payroll, and legal responsibilities. |
| Ownership | Owned by the company setting it up or its shareholders. | EOR is the legal employer, but the client company maintains operational control. |
| Employment Contracts | Employees are directly employed by the legal entity, which sets their terms and conditions. | The EOR signs employment contracts with workers and ensures compliance with local laws. |
| Compliance Responsibility | The legal entity is fully responsible for local labor laws, tax compliance, benefits, and other regulatory requirements. | The EOR handles all compliance-related aspects, such as labor laws, taxes, and employee benefits. |
| Payroll & Benefits Management | Managed directly by the legal entity, which handles all payroll, taxes, and benefits. | The EOR manages payroll, taxes, and employee benefits, relieving the client company from these responsibilities. |
| Tax Liabilities | The legal entity assumes all tax liabilities, including local taxes, social security, etc. | The EOR assumes tax liabilities for employees, ensuring proper tax filing and payments in compliance with local laws. |
| Time to Set Up | Setting up a legal entity can take weeks or months due to registration, compliance, and operational setup. | The EOR can be set up quickly (typically in a few days or weeks), as the infrastructure is already in place. |
| Employee Onboarding | Managed by the legal entity, requiring HR processes, paperwork, and systems setup. | The EOR handles all aspects of employee onboarding, from contract creation to compliance checks. |
| Employment Law Expertise | The company needs internal expertise or external legal consultants to navigate local labor laws and tax compliance. | The EOR provides expert knowledge of local employment laws, reducing legal risks for the client company. |
| Risk & Liability | The company assumes all risks and liabilities related to employment and legal matters. | The EOR assumes the legal risks and liabilities associated with employment, protecting the client company. |
| Control Over Workforce | The legal entity has full control over recruitment, hiring, firing, and day-to-day employee management. | The client company retains operational control, but the EOR is the official employer and handles HR compliance. |
| Flexibility | Less flexible, as employees are directly hired by the legal entity, which might involve more complexity when scaling or expanding internationally. | Highly flexible, enabling the client company to quickly hire employees globally without establishing local entities. |
| Cost & Investment | Significant initial investment required for company registration, legal fees, HR setup, and ongoing operational costs. | Generally lower cost, as the client company does not have to set up local entities or hire an in-house HR team. |
| Global Expansion | Requires establishing a local entity in each country where the business intends to hire, which can be time-consuming and costly. | The EOR makes global expansion easy by managing local employment and compliance requirements, without setting up legal entities in each country. |
Suggested Read: EOR- A Detailed Guide on Employer of Record 2024
Choose Between an EOR Brazil Partner and a Legal Entity
Legal Entity in Brazil
Setting up a legal entity in Brazil involves registering with federal, state, and municipal authorities, obtaining a CNPJ (company tax ID), and navigating the country’s intricate labor and tax laws. While this option offers full operational control, it demands substantial investment in legal setup, payroll systems, and expertise in Brazilian compliance regulations.
On the other hand, partnering with an EOR Brazil provider ensures a seamless entry into the Brazilian market with reduced risks and administrative complexities. Businesses can leverage EOR services in Brazil to streamline hiring, payroll, and compliance processes.
What are the Use Cases for Availing of Services Under Employer of Record Brazil?
1. Business Expansion Without a Legal Entity
For foreign businesses, entering the Brazilian market can be daunting due to the complexity of legal and regulatory requirements. An Employer of Record (EOR) allows companies to start operations in Brazil without setting up a formal legal entity. The EOR becomes the local employer for hired employees, managing payroll, taxes, and compliance while the company focuses on core business activities.
This is especially beneficial for:
- Startups testing new markets.
- Enterprises running short-term projects in Brazil.
- Organizations seeking cost-effective market entry strategies.
2. Offering Full-time Employment to Contractors or Freelancers
Many businesses initially hire Brazilian talent as independent contractors or freelancers to reduce operational complexities. However, as work relationships solidify, transitioning these individuals into full-time roles can be complex. An EOR simplifies this process by providing structured employment contracts, employee benefits in Brazil, and ensuring compliance with labor laws.
3. Recruiting Talent Globally
Brazil is renowned for its diverse and skilled workforce, particularly in IT, manufacturing, and energy sectors. For companies hiring from abroad, an EOR acts as a vital partner, managing recruitment and ensuring compliance with regional hiring norms. Businesses can build globally distributed teams without the administrative burden of establishing offices in multiple locations.
Laws and Compliance Best Practices to Hire Employees in Brazil
Brazil has a complex legal landscape with strict labor and employment regulations. Non-compliance can result in penalties and legal challenges. Below are the essential laws and best practices businesses should follow:
- Understanding Brazilian Labor Laws: Familiarize yourself with laws like the Consolidation of Labor Laws (CLT), FGTS (Severance Indemnity Fund), and the 13th salary provision. These laws govern employee rights and benefits.
- Taxation in Brazil: Employers must ensure proper deductions for INSS (social security), IRRF (withholding tax), and other payroll obligations. An EOR simplifies this by managing filings and payments.
- Employee Benefits in Brazil: Employees are entitled to statutory benefits, including FGTS, paid vacation, 13th salary, and transportation and meal allowances.
- Contract Structuring: Employment agreements should be clear, compliant, and aligned with labor regulations to avoid disputes.
Best practices for compliance include conducting regular audits, staying updated on legal changes, and engaging a professional EOR partner for ongoing support.
Best EOR Companies in Brazil
Choosing the right EOR provider can make or break your business’s success in Brazil. Trusted EOR providers handle everything from compliance to payroll management efficiently. Explore the Top EOR Companies in Brazil to find partners that align with your goals and budget.
What are EOR Services in Brazil
Payroll Management
Payroll Management is a fundamental aspect of EOR services. Employers in Brazil must navigate complex payroll regulations, managing salaries, 13th month pay, statutory deductions, and taxes. EOR providers handle salary calculations, ensure accurate deductions for INSS and FGTS, and file necessary payroll-related tax returns. This ensures accurate and timely employee payments while maintaining compliance with Brazilian laws, protecting businesses from costly errors or penalties.
Employee Onboarding
Employee Onboarding is another critical service provided by EORs in Brazil. The onboarding process involves issuing legally compliant employment contracts, collecting and verifying necessary documents, and integrating new hires into the organization. EORs simplify the process for foreign businesses unfamiliar with Brazilian employment norms by ensuring compliance with all regulatory requirements. This helps businesses start operations quickly while creating a positive experience for new employees.
HR Administration
HR Administration offered by EORs ensures that routine HR tasks are managed efficiently. This includes maintaining employee records, monitoring attendance, and addressing workforce-related queries. By taking over these administrative tasks, EOR providers free up businesses to focus on strategic initiatives. Moreover, many EORs offer Self-Serve Employee Portals that allow employees to access payslips, update personal information, and apply for leave, making HR processes more transparent and user-friendly.
Equipment Procurement and Management
Equipment Procurement and Management is particularly important for companies employing remote teams or specialized roles. EORs assist in sourcing, delivering, and managing necessary work tools and equipment, ensuring employees have the resources needed to perform their roles effectively.
EOR Brazil Services
Compliance and Legal Support
Compliance and Legal Support is a vital component of EOR services, especially in a country like Brazil with stringent labor laws. EOR providers ensure businesses adhere to regulations like CLT, work hour limits, and mandatory paid holidays. They also handle statutory filings, reducing the risk of non-compliance and associated penalties. This support is particularly valuable for international companies that may lack in-depth knowledge of local laws.
Taxation and Statutory Compliance
Taxation and Statutory Compliance is another area where EORs provide significant value. They manage mandatory deductions like INSS, FGTS, and IRRF contributions, ensuring accurate calculations and timely submissions. This service ensures businesses comply with Brazilian tax regulations while maintaining transparency with employees regarding their contributions and benefits.
Employee Insurance and Benefits Administration
Employee Insurance and Benefits Administration is a critical service for companies aiming to attract and retain top talent. EORs manage statutory benefits like life insurance, transportation vouchers, and optional perks such as health insurance. They also ensure that benefits align with Brazilian labor laws and cultural expectations, enhancing employee satisfaction and loyalty.
Risk Management and Insurance
Risk Management and Insurance services provided by EORs help businesses mitigate employment-related risks. This includes covering liabilities such as wrongful termination claims, workplace accidents, or compliance audits. EORs act as a buffer, ensuring that companies operate within the legal framework and are protected from potential disputes.
Self-Serve Employee Portal
A Self-Serve Employee Portal is an advanced feature offered by many EOR providers to enhance employee engagement and streamline HR processes. This digital platform allows employees to independently access critical information such as their payslips, tax details, benefits, and leave balances. Employees can update personal information, track attendance, and apply for leaves without needing constant HR intervention, making the system more efficient for both employees and employers.
Employee Tax Optimization
Employee Tax Optimization is another specialized service offered by EOR providers. They assist employees in structuring their salaries to maximize tax savings while ensuring compliance with Brazilian tax laws. This not only benefits employees but also enhances overall satisfaction and retention.
Employee Retirement
EOR services in Brazil also extend to managing employee retirement benefits, ensuring compliance with statutory requirements and providing support for long-term employee welfare. This involves managing contributions to retirement schemes like the INSS and employer obligations toward FGTS, as mandated by Brazilian labor laws. EOR providers handle accurate and timely deductions and deposits, ensuring employee rights are protected and employers remain compliant.
Offboarding & Recovery
Offboarding and Recovery services ensure that employee exits are handled professionally and compliantly. EORs manage final settlements, conduct exit interviews, and recover company assets. This ensures a smooth transition and helps maintain a positive relationship with departing employees while protecting the company’s interests.
How to Hire Employees Through an EOR Brazil Partner
Hiring employees through an EOR Brazil Partner offers businesses a streamlined, compliant way to establish a presence in Brazil without the need for a legal entity. By partnering with an EOR provider, companies can bypass the complexities of labor laws, tax regulations, and administrative tasks.
EOR Brazil Partner
An EOR Brazil Partner is a third-party service provider that acts as the official employer of record for your employees in Brazil. The EOR partner handles all employment-related obligations, including compliance with Brazilian labor laws, payroll, tax filings, benefits administration, and more. By working with an EOR, you can focus on business operations, recruitment, and talent management while ensuring that your employees in Brazil are fully compliant with statutory regulations. The EOR partner also mitigates risks associated with non-compliance, such as penalties or legal disputes, ensuring that all HR and employment practices meet Brazil’s stringent requirements.
Select the Best EOR Service Provider in Brazil for Your Business
Choosing the right EOR service provider is a crucial step in ensuring the success of your operations in Brazil. The best EOR partner should have in-depth knowledge of Brazilian labor laws, strong local market experience, and a proven track record of providing comprehensive employee management solutions. When evaluating EOR companies, look for factors such as their level of expertise in payroll management, HR support, compliance handling, and employee benefits administration. Additionally, ensure that the EOR provider offers flexible service packages that align with your company’s specific needs.
Hire & Onboard Your New Employees
Once you have selected an EOR Brazil partner, the next step is to begin the hiring process. Your EOR partner will help you recruit the best talent for your business needs by advertising job openings, interviewing candidates, and handling employment documentation. The EOR will also manage the employee onboarding process, ensuring that new hires receive a compliant employment contract, go through the necessary training, and understand their roles and responsibilities. This process is designed to make the transition smooth for both the employee and the employer while ensuring full legal compliance in Brazil.
Remote EOR Employee Onboarding Checklist for Brazil
| Onboarding Step | Responsibility | Details |
| Before Offer Letter | ||
| Collect Employee Details | Company | Gather necessary details like name, CPF, contact info, address, previous employment docs, etc. |
| After Offer Letter | ||
| Draft Employment Contract | EOR | Create localized employment agreements compliant with Brazilian labor laws (CLT). |
| Background Verification | EOR | Conduct background checks with informed consent from the new hire. |
| Welcome Email | Company & EOR | Company sends welcome email; EOR conducts local onboarding process. |
| On Joining Day | ||
| Employment Documentation | EOR | Ensure all paperwork like contracts, NDAs, tax forms, etc., are completed and filed. |
| Payroll Setup | EOR | Collect required docs, set up payroll systems and tax calculations. |
| Policy Briefing | Company | Explain leave policies, code of conduct, company procedures to the new hire. |
| Account Setup | EOR | Assist with bank account setup for salary deposits. |
| Introduction to Systems | EOR | Provide a walkthrough of payroll and HRIS systems. |
| IT Setup | Company/EOR | Provide necessary equipment, software, IT training, and communication channels. |
| Mentor Assignment | Company | Assign a buddy/mentor to help the new hire acclimate to company culture. |
| Post-Onboarding | ||
| Payroll Explanation (First Paycheck) | EOR | Explain payslip components like deductions, contributions, and net pay. |
| Ongoing Support | Company | Schedule regular check-ins and 1:1 meetings to provide ongoing support and feedback. |
| HR Operations | EOR | Manage payroll processing, compliance, benefits administration, and other HR operations. |
Processing Payroll
Processing payroll in Brazil can be complex due to the various deductions and contributions required by Brazilian tax and labor laws. An EOR partner takes care of the entire payroll process, ensuring that employees are paid accurately and on time while adhering to Brazilian payroll regulations.
Key components of payroll management in Brazil include:
- Salary and Wages: The base salary, transport and meal allowances, 13th salary, and bonuses are processed in accordance with Brazilian labor regulations.
- Statutory Deductions: Deductions for INSS (social security), FGTS (severance fund), and IRRF (income tax) are mandatory. These are calculated based on salary brackets and legal thresholds.
- Tax Deductions at Source (IRRF): Employers must withhold income tax from employee salaries and submit the payments to Receita Federal (Brazilian tax authority).
- Other Benefits: EORs also manage voluntary or statutory benefits such as health insurance, transportation vouchers, and overtime payments.
The payroll process in Brazil typically involves three stages:
- Payroll Calculation: This includes calculating monthly gross salary, transport and meal benefits, overtime (if any), and mandatory deductions such as INSS and FGTS.
- Tax Compliance: The EOR determines applicable tax brackets and withholds the correct IRRF amount, submitting monthly declarations (e.g., eSocial) to tax authorities.
- Salary Disbursement: After all deductions, the EOR disburses salaries to employee bank accounts. This ensures that payments are timely, accurate, and compliant with federal labor laws.
Suggested Read: Hire Employees in India Through EOR
Taxes in Brazil
Taxes are a critical aspect of the Brazilian financial system, and employees in Brazil are subject to various forms of taxation. The primary taxes that employees need to understand are income tax (IRRF), social security (INSS), and other employer contributions. Understanding these tax obligations is essential for financial planning and legal compliance in Brazil.
Progressive Income Tax Brackets (IRRF)
The Brazilian income tax (Imposto de Renda Retido na Fonte – IRRF) follows a progressive structure. Employees are taxed based on their monthly income as per the following table:
| Monthly Income (BRL) | Tax Rate |
| Up to R$2,112.00 | Exempt |
| R$2,112.01 – R$2,826.65 | 7.5% |
| R$2,826.66 – R$3,751.05 | 15% |
| R$3,751.06 – R$4,664.68 | 22.5% |
| Above R$4,664.68 | 27.5% |
Employers are responsible for withholding IRRF monthly and remitting it to the Brazilian tax authorities. Accurate application of deductions is essential for correct tax calculation.
Tax Due Dates in Brazil
Brazil’s tax system operates on strict monthly reporting cycles. Employers must file and pay payroll-related taxes such as INSS, FGTS, and IRRF each month. The deadlines typically fall within the first 7 to 20 days of the following month, depending on the type of tax. Annual income tax returns (Declaração de Imposto de Renda) for individuals are usually due by April 30th of the following year. Companies must also comply with SPED (Public Digital Bookkeeping System) requirements, submitting digital accounting and fiscal data monthly and annually.
Tax Thresholds in Brazil
Brazil uses a progressive tax model based on monthly salary. Individuals earning below R$2,112 per month are exempt from IRRF. As income increases, higher tax rates apply. In addition, social security contributions (INSS) follow tiered rates based on income brackets. Corporations are taxed at 15% to 34%, depending on the tax regime (Presumed Profit or Actual Profit). Understanding these thresholds helps in determining withholding rates and total tax liability.
Tax Withholding (IRRF)
IRRF is withheld directly from an employee’s monthly paycheck by the employer. The employer is responsible for calculating the taxable income after applying allowable deductions (e.g., dependents, alimony, INSS). The withheld IRRF must be reported via eSocial and remitted promptly to avoid penalties. Employers must issue income reports (Informe de Rendimentos) annually to employees for their tax returns.
Social Security (INSS)
Social security in Brazil is managed by INSS (Instituto Nacional do Seguro Social). Both employees and employers contribute, with the employee’s portion deducted from salary and the employer paying an additional share.
- Employee Contribution: Ranges from 7.5% to 14% based on income brackets.
- Employer Contribution: Usually 20% of the employee’s salary, plus additional levies for workplace risk and third-party entities (such as SENAI, SESI).
These contributions fund pensions, maternity leave, and other social benefits.
FGTS (Severance Fund)
The Fundo de Garantia do Tempo de Serviço (FGTS) is a mandatory employer contribution, equivalent to 8% of the employee’s monthly salary. The amount is deposited into a dedicated employee account managed by Caixa Econômica Federal, and can be withdrawn in cases of dismissal, retirement, or property purchase. FGTS is not deducted from the employee’s salary but is an additional employer obligation.
Other Mandatory Benefits and Charges
Employers in Brazil must also account for:
- 13th Salary: A mandatory annual bonus equal to one month’s salary, paid in two installments (November and December).
- Paid Vacation Bonus: An additional 1/3 of monthly salary paid during annual leave.
- Meal and Transportation Vouchers: Required benefits under CLT unless employees opt out voluntarily.
Failure to comply with these regulations can result in fines and legal challenges.
Deductions and Exemptions
The Brazilian tax system allows deductions that reduce the IRRF burden:
- Dependents: A fixed monthly deduction per dependent declared.
- Health and Education Expenses: Applicable for annual tax returns.
- INSS Contributions: Fully deductible from taxable income.
Employers can assist employees in maximizing these benefits by structuring salaries efficiently and offering payroll assistance services.
Severance Fund (FGTS) Contributions
As part of Brazil’s labor security system, FGTS contributions are mandatory for every formal employee. Employers must deposit 8% of each worker’s monthly salary into their FGTS account. In case of termination without cause, an additional 40% penalty on the total FGTS balance must be paid by the employer. This system is unique to Brazil and provides a financial cushion for employees during job transitions.
Health and Social Security – E-Social Reporting
All tax and employment obligations in Brazil must be reported digitally through the eSocial platform. This centralized system requires timely submission of payroll, tax, and social security data. EOR providers play a key role in ensuring accurate, up-to-date submissions, avoiding compliance risks and government audits.
Asanify’s Support For Employee Tax Optimization in Brazil
Asanify, a global leader in EOR services, extends its capabilities to Brazil by offering robust employee tax optimization. Through automated payroll systems and deep compliance expertise, Asanify helps businesses minimize tax liabilities, optimize INSS and IRRF contributions, and manage FGTS with precision. Employees receive guidance on maximizing deductions and exemptions, while employers benefit from streamlined operations, reduced penalties, and complete tax transparency. Asanify ensures every tax detail—from IRRF to 13th salary—is handled with accuracy and compliance in the Brazilian market.
CTC Calculator for Hiring Employees in Brazil
When hiring employees in Brazil, understanding the total employment cost is crucial for both employers and employees. The Brazilian equivalent of Cost to Company (CTC) includes the gross salary along with mandatory contributions such as social security (INSS), FGTS (severance fund), the 13th salary, vacation pay, and additional benefits. To make this process clearer, businesses can use a CTC Calculator tailored for Brazil to break down each component of the employee’s full compensation package. This helps both employers and employees understand how much will be paid by the company annually, and how much the employee will receive after deductions like income tax and INSS contributions. For more details on Brazilian salary structures and how to calculate total compensation, check out our blog!
Key Considerations While Hiring Employees through EOR in Brazil
Employee Agreements in Brazil
Employee agreements are a critical component of hiring employees in Brazil. An EOR partner ensures that all employee agreements comply with Brazilian labor laws (CLT) and contain essential elements, including job responsibilities, compensation structure, confidentiality clauses, non-compete clauses, and termination terms. These agreements serve as legal contracts that protect both the employer and the employee, ensuring that both parties understand their rights and obligations. It’s vital for businesses to ensure that these agreements are drafted in accordance with local labor laws, as failure to do so could lead to legal complications.
Work Hours and Probation
Work hours and probation periods are key aspects of an employee’s contract. The standard workweek in Brazil is 44 hours, with a maximum of 8 hours per day, and one day of rest (typically Sunday). However, companies may implement flexible working hours based on collective agreements or roles. EORs ensure that employment contracts include a probation period (usually up to 90 days), during which either party may terminate the employment with shorter notice. This helps set clear expectations on performance evaluations and long-term employment decisions.
Leave Policies
Brazil has specific leave entitlements defined by the CLT. These leave types must be clearly outlined in employee contracts and adhere to statutory guidelines. EORs help structure leave policies in compliance with Brazilian law and company-specific practices.
Standard Leave Policy in Brazil
| Leave Type | Description | Duration |
| Annual Vacation | Paid time off earned after 12 months of service | 30 calendar days |
| Sick Leave | Medical leave with social security coverage | Up to 15 days paid by employer, then by INSS |
| Maternity Leave | Leave for childbirth and recovery | 120 days (can extend to 180) |
| Paternity Leave | Paid leave for new fathers | 5 days (can extend to 20) |
| Bereavement Leave | Leave for death of close relative | 2 days |
| Marriage Leave | Leave for employee’s own wedding | 3 days |
| Voting Leave | Time off to vote in elections | As required by law |
EORs ensure employees receive their full leave entitlements and that leave policies are documented in employment agreements. Many employers also offer additional leave as a talent retention tool.
Types of Leave Under Brazilian Labor Law
- Annual Vacation Leave: Employees receive 30 days of paid vacation annually after completing 12 months of service. The leave can be split into up to three periods, and employees are also entitled to an additional 1/3 salary bonus during vacation.
- Sick Leave: The first 15 days of illness are paid by the employer; beyond that, INSS (Social Security) pays a medical benefit if the employee submits a proper medical certificate.
- Maternity Leave: Brazilian law grants 120 days of paid maternity leave, which can be extended to 180 days under some federal programs. This applies to childbirth and adoption.
- Paternity Leave: Fathers are entitled to 5 days of paid leave, extendable to 20 days under certain company programs registered with the Citizen Company Program.
- Bereavement Leave: Employees are entitled to 2 days off in the event of a parent, child, or spouse’s death.
- Marriage Leave: Employees are allowed 3 paid days off for marriage celebrations.
- Sabbatical Leave: While not mandated by law, some companies voluntarily offer unpaid or partially paid sabbatical leave to encourage professional growth or personal recovery.
List of General Public Holidays in Brazil – 2025
| Date | Occasion | Category |
| 01 January 2025 | New Year’s Day | National Holiday |
| 12 February 2025 | Carnival Tuesday | National Holiday |
| 29 March 2025 | Good Friday | National Holiday |
| 21 April 2025 | Tiradentes Day | National Holiday |
| 01 May 2025 | Labor Day | National Holiday |
| 07 September 2025 | Independence Day | National Holiday |
| 12 October 2025 | Our Lady of Aparecida | National Holiday |
| 02 November 2025 | All Souls’ Day | National Holiday |
| 15 November 2025 | Republic Proclamation Day | National Holiday |
| 25 December 2025 | Christmas Day | National Holiday |
Note: Additional regional holidays (e.g., São Paulo Anniversary, Corpus Christi) may apply based on state or municipality.
Severance and FGTS Contributions
In Brazil, severance is governed by the FGTS (Fundo de Garantia do Tempo de Serviço) system. Employers contribute 8% of an employee’s monthly salary to a government-managed fund. Upon dismissal without cause, employees are entitled to:
- Full FGTS balance
- 40% penalty paid by the employer on total FGTS contributions
- Advance notice pay or pay-in-lieu
EORs manage these contributions and payouts according to legal requirements, ensuring no liabilities are overlooked during employee separation.
Termination Policies
Termination Policies must follow strict procedures under Brazilian law (CLT). Employees may be terminated for cause or without cause. For terminations without cause, employers must provide:
- Prior notice (usually 30 days) or payment in lieu
- Unemployment fund access (FGTS)
- Mandatory severance payment (40% penalty on FGTS)
- Accrued leave and 13th salary payout
EOR Brazil partners ensure that all terminations are conducted lawfully, with proper documentation and employee protections, reducing risk of litigation or penalties.
Bonus Payments in Brazil
While not governed by a “bonus act,” Brazilian labor law mandates:
- 13th Salary (Gratificação Natalina): A compulsory bonus equal to one month’s salary, paid in two installments (November and December).
- Performance Bonuses: Optional but commonly offered, especially in tech, finance, and sales sectors. These must be clearly defined in contracts to avoid labor disputes.
EOR partners ensure correct classification and disbursement of mandatory and optional bonuses, including accurate tax reporting and employee communication.
Health Insurance in Brazil
Health Insurance is one of the most valued employee benefits in Brazil. Although public healthcare (SUS) is universally accessible, many employers provide private health plans as part of compensation packages. Larger employers often also offer dental, life, and mental health coverage.
Employers in regulated sectors or with collective agreements may be required to provide health insurance. EORs coordinate benefit administration and compliance with plan providers and unions, ensuring seamless coverage for employees.
Suggested Read: PEO vs EOR Differences- All That You Need to Know
Employee Benefits in Brazil
Employee benefits are a crucial aspect of the compensation package offered by companies in Brazil. These benefits not only help attract and retain top talent but also contribute to employee well-being and job satisfaction. In Brazil, employee benefits can be broadly categorized into statutory and supplementary benefits.
Statutory Benefits in Brazil
Statutory Benefits are those mandated by Brazil’s Consolidation of Labor Laws (CLT). These benefits ensure employees receive essential protections and entitlements while helping employers comply with national labor standards. Key statutory benefits in Brazil include:
- INSS (Social Security Contributions): Employers and employees contribute to Brazil’s national social security fund, which supports pensions, disability, and sick leave. The employee contribution ranges from 7.5% to 14%, while employers contribute 20% or more.
- FGTS (Severance Guarantee Fund): Employers contribute 8% of an employee’s monthly salary to a fund that the employee can access under certain conditions like termination or housing purchase.
- 13th Salary: Employees receive an annual bonus equivalent to one month’s salary, paid in two installments in November and December.
- Paid Vacation: Employees are entitled to 30 days of paid vacation annually, along with a 1/3 vacation bonus.
Supplementary Benefits in Brazil
Supplementary benefits go beyond legal requirements and serve to enhance the employee experience. These benefits help improve engagement and retention. Common supplementary benefits in Brazil include:
- Private Health Insurance: Many employers provide private healthcare plans to offer better access to medical services beyond the public SUS system.
- Meal and Transportation Vouchers: Required unless employees opt out, these benefits help cover daily expenses and are regulated by law.
- Performance Bonuses: In addition to the 13th salary, companies may offer discretionary bonuses tied to KPIs or business performance.
- Stock Options: Growing in popularity in Brazil’s tech and startup sector, equity grants are used to reward long-term performance.
Asanify’s Flexible Benefits Plan for EOR Employees
Asanify offers a tailored Flexible Benefits Plan (FBP) for Brazil-based EOR employees, designed to align with local taxation and benefit standards. The plan includes allowances for transportation, meal vouchers, education reimbursement, and health insurance top-ups, allowing employees to optimize take-home pay while remaining compliant.
With Asanify’s payroll automation and benefit management tools, employees can track entitlements and make benefit choices through a self-service portal. Employers, in turn, benefit from enhanced employee satisfaction and tax-efficient compensation planning—all without increasing overall CTC.
Terminations in Brazil
Terminating employment in Brazil must be handled in compliance with CLT. The process varies for just cause, without cause, and resignation, each with specific legal procedures. Employees are entitled to severance benefits and notice periods, depending on the reason and duration of employment.
Notice Periods in Brazil
The standard notice period in Brazil is 30 days, with an additional 3 days per year of service, up to a maximum of 90 days. Notice may be served or paid in lieu. If the employee resigns, they must also provide 30 days’ notice unless exempted.
Severance Pay in Brazil
Severance pay depends on the type of termination:
- Without Cause: Includes full FGTS withdrawal rights, a 40% penalty on FGTS contributions, proportional 13th salary, unused vacation pay, and salary up to termination date.
- With Cause: The employee forfeits the right to severance components like FGTS penalty and prior notice compensation.
The termination process must include payment of all entitlements, proper documentation, and submission of eSocial filings.
Key Points
- Legal Compliance: Brazilian termination procedures must follow labor code standards, especially for FGTS, vacation, and INSS payments.
- Documentation: Contracts, payment receipts, and termination letters must be retained for legal proof.
- Employment Contracts: Contracts should clearly outline notice periods, termination clauses, and severance conditions.
- Employee Rights: Employees must receive all earned rights at termination, and may appeal wrongful dismissals in labor courts.
Types of Termination
Termination for Cause
Termination for Cause (Justa Causa) occurs due to misconduct, such as theft, insubordination, or dishonesty. The employer must document the misconduct, follow due process, and file required notices via eSocial. No severance benefits or FGTS withdrawals are due.
Termination Without Cause
This is a dismissal not related to the employee’s conduct—often tied to restructuring or budget constraints. The employer must provide notice or pay in lieu, pay a 40% FGTS penalty, and settle accrued benefits. This is the most common termination type.
Collective Termination
Collective Termination refers to mass layoffs, usually due to economic shifts or business closures. Employers must negotiate with unions and follow CLT rules. In some cases, government mediation is required. All affected employees receive full severance.
Voluntary Termination (Resignation)
When an employee voluntarily resigns, they must submit written notice and serve the agreed notice period. They receive accrued 13th salary, vacation pay, and salary up to departure, but are not entitled to the FGTS penalty or unemployment insurance.
What are the Key Steps Involved in Terminating Employees in Brazil?
1. Serve Notice Period
Employers must give 30 days’ notice (or pay in lieu) when terminating without cause. Employees who resign must also provide notice, which may be waived by mutual agreement.
2. Termination for Cause
Just cause dismissals require detailed documentation and evidence of serious misconduct. A disciplinary process must be followed to ensure legal compliance and avoid labor court claims.
3. Full and Final Settlement
Employers must pay:
- Final salary
- Proportional 13th salary
- Unused vacation and vacation bonus
- FGTS penalty (if applicable)
- Any due bonuses or commissions
This must be settled on the next business day after dismissal (or within 10 days for certain payment types).
4. Documentation
Key termination documents include:
- Official termination notice and payment breakdown
- Signed acknowledgment of receipt of funds
- Exit interview form (optional)
- eSocial submission records
- Certificate of Employment (CTPS) closure
Maintaining accurate records protects both the company and the employee in case of audits or disputes.
Recommended Read: How to Hire in India Easily- 10 Key Considerations
How to Choose the Right EOR Brazil Services?
Expertise and Local Knowledge
When selecting an EOR Brazil Partner, it’s vital to choose a provider with deep expertise in the Brazilian market. The provider should understand the complexities of Brazil’s labor laws (CLT), tax regulations (including INSS and FGTS), employment contracts, and union agreements. This local knowledge ensures that your business remains fully compliant and avoids costly legal or financial issues.
Comprehensive Service Offerings
The ideal EOR service provider should offer a broad range of services, including payroll processing, tax reporting, employee onboarding, benefits administration, union compliance, and termination support. A full-service provider in Brazil can manage the entire employment lifecycle, helping you focus on business growth without being overwhelmed by regulatory intricacies.
Scalability and Flexibility
Your hiring needs in Brazil may evolve as your business grows or project scopes shift. A reliable EOR partner should offer scalable solutions—whether you’re hiring a single employee in São Paulo or building a regional team across multiple states. Flexibility in contract types (CLT, contractors) and customized service tiers ensures your workforce strategy can adapt over time.
Technology and Data Security
In Brazil’s complex regulatory environment, data integrity and security are crucial. Choose an EOR Brazil provider that leverages secure HR technology platforms to manage payroll, tax filings, employee documentation, and benefits. The provider should comply with Brazil’s data protection law (LGPD), ensuring that employee information is processed securely and in compliance with privacy regulations.
Compliance and Risk Management
A key benefit of working with an EOR Brazil partner is minimizing the risk of non-compliance with Brazil’s labor and tax laws. Ensure that the EOR has a strong track record in managing CLT compliance and can assist with audits, eSocial filings, and adapting to updates in labor reforms. This reduces the legal risks your business faces when hiring employees in Brazil.
Reputation and Client References
Check the reputation of the EOR provider by reviewing client testimonials and success stories. A reputable EOR partner will have proven experience working with international clients and should be able to share case studies demonstrating their compliance expertise, responsiveness, and client satisfaction.
Expertise in Brazilian Employment Regulations
An EOR provider must have in-depth knowledge of Brazil’s labor code (CLT), statutory benefits like INSS and FGTS, taxation, and collective bargaining agreements. This ensures employers can legally hire, manage, and terminate employees while meeting obligations like payroll processing, 13th salary, paid vacation, and severance terms.
Service Offerings and Scalability
Make sure the EOR Brazil provider delivers all the services your business requires, such as hiring, onboarding, payroll, tax submission, union compliance, and offboarding. The provider should be capable of scaling operations to support your company as it grows or shifts across multiple Brazilian regions or cities.
Reputation and Client References
Reassess the EOR partner’s reputation by requesting direct references, reading online feedback, or speaking to businesses that have partnered with them. A strong reputation is a sign of operational reliability, industry-specific expertise, and transparent communications.
Data Security and Privacy Compliance
Given the sensitivity of payroll and employee data, the EOR Brazil partner must ensure compliance with Lei Geral de Proteção de Dados (LGPD)—Brazil’s data protection law. The EOR should maintain robust data encryption, secure servers, and limit data access to authorized personnel only.
Transparent Pricing and Contractual Agreements
Before finalizing an EOR provider, ensure their pricing model is transparent with no hidden fees. All deliverables, service level agreements, and timelines should be clearly outlined in a legally binding contract. This provides clarity and avoids disputes down the line.
Local Network and Support
A competent EOR Brazil provider should maintain strong connections with local accountants, labor attorneys, and regional unions. This ensures timely updates on labor law changes and fast resolution of compliance matters—without needing to rely on multiple third-party advisors.
Benefits of Working With an Employer of Record Service Provider in Brazil
Compliance and Legal Expertise
One of the biggest advantages of partnering with a Brazil EOR is accessing their legal expertise. Brazil’s employment environment is governed by strict and often union-specific labor laws (CLT), along with complex tax codes. An EOR ensures that your hiring, payroll, contract terms, and benefits remain compliant with federal laws, municipal taxes, and collective agreements.
Time and Cost Efficiency
Hiring through a Brazilian EOR saves your business from the bureaucratic burden of opening a legal entity. EORs take on administrative functions like payroll, union contributions, tax deductions (IRRF, INSS), and FGTS. This allows companies to reallocate resources to operations, strategy, and market expansion.
Swift Market Entry
An EOR enables immediate market entry by allowing you to hire employees and operate in Brazil without a CNPJ or local branch. You can start testing the Brazilian market, fulfill project contracts, or service clients without waiting months for bureaucratic approvals or tax registrations.
Local HR Support
An EOR offers dedicated HR support with expertise in Brazilian workplace culture, holidays, union rights, and employee expectations. They handle daily issues like onboarding, grievances, and payroll queries, ensuring a seamless experience for employees and employers alike.
Flexibility and Scalability
An EOR allows you to easily scale up or down depending on project needs. Whether expanding across different states or restructuring operations, the EOR manages terminations, notice periods, and severance compliance, eliminating risks associated with workforce changes.
Risk Mitigation
An EOR in Brazil shields your business from labor lawsuits, wrongful termination disputes, and tax non-compliance. By legally employing staff on your behalf, the EOR assumes responsibility for all local regulations, reducing the legal and financial exposure your company would otherwise face.
Cost Efficiency
EOR services eliminate the need for setting up a local entity, hiring in-house HR/payroll teams, or contracting local legal firms. With bundled, fixed-fee services, the EOR handles payroll, taxes, benefits, and compliance, creating a cost-efficient way to manage workforce operations in Brazil.
Mitigating Cultural and Language Barriers
Brazil is a Portuguese-speaking country with distinct work culture norms. A local EOR bridges communication gaps and ensures that employment practices align with cultural expectations, holidays, and employee engagement norms, helping businesses build lasting workforce relationships.
Focus on Core Business Activities
Outsourcing employment tasks to an EOR lets businesses stay focused on sales, client delivery, R&D, and market expansion. While the EOR manages backend compliance and HR administration, companies can channel energy into competitive growth and operations.
Visa Types in Brazil
Asanify supports global employers in navigating Brazil’s visa and immigration process, offering assistance with documentation, compliance, and government coordination. For companies managing foreign staff in Brazil, Asanify simplifies employment visa processing through its expert legal network.
If you prefer to manage the process independently, here’s a step-by-step overview:
Visa Application Process
Foreign nationals wishing to work in Brazil must first secure a job offer from a local company or an authorized EOR. The hiring entity applies for a temporary work visa (VITEM V) through Brazil’s Ministry of Justice and Foreign Affairs. Once approved, the foreign national visits the local Brazilian consulate in their home country to complete the visa application and obtain authorization for entry.
Required documents include:
- Passport (valid for at least 6 months)
- Employment offer letter from a Brazilian company
- Employment contract and job description
- Academic and professional qualifications
- Proof of employer’s registration with CNPJ
Work Permit (VITEM V) Requirements
The VITEM V visa is issued for employment contracts longer than 90 days and may be valid for 1-2 years, renewable depending on the job and employer. The sponsoring company must prove that:
- The job cannot be filled by local talent
- The candidate has the skills and qualifications for the role
- The company is registered and operating legally in Brazil
Visa processing can take 4–8 weeks, depending on approvals and document readiness.
Foreigner Registration
Once in Brazil, employees holding long-term visas must register with the Federal Police within 90 days of arrival. They will receive a Registro Nacional Migratório (RNM) card, which serves as their official ID during their stay. Failing to register may result in fines, visa revocation, or expulsion.
Risks or Drawbacks of EOR Brazil
1. Limited Control
One of the main drawbacks of using an EOR in Brazil is the limited control over employees’ daily operations. Since the EOR is the official employer, it manages payroll, compliance, HR administration, and documentation. Your company may find it challenging to align employees fully with your organizational culture, especially when decisions related to HR compliance and contract terms are managed externally.
2. Potential Cultural Differences
Brazilian workplace norms, communication styles, and labor expectations may differ from those of your home country. Although EORs help navigate these nuances, businesses unfamiliar with Brazil’s informal but relationship-oriented corporate culture might experience integration challenges. Misalignment in expectations or miscommunication may affect team productivity and morale.
3. Cost
While an EOR in Brazil eliminates the cost and time of setting up a local legal entity, EOR service fees may still be substantial—particularly if you are only managing a small team. Some services may also include charges for union negotiations, benefits administration, or region-specific legal obligations. Businesses should evaluate whether the added value offsets the cost of outsourcing these services.
4. Data Security and Confidentiality
As your Brazil EOR will manage sensitive data such as salaries, benefits, and personal information, data privacy and LGPD (Brazil’s General Data Protection Law) compliance are critical. Reputable EORs adhere to global data security protocols, but you must verify that your provider protects sensitive data and complies with local and international privacy standards.
5. Scalability Challenges
While EORs offer scalable solutions, there can be limitations when you grow rapidly across multiple Brazilian states. Certain providers may face delays in handling payroll variations, union obligations, or regional compliance updates. Ensure your EOR has the bandwidth and localized infrastructure to scale efficiently.
6. Communication Challenges
If the EOR operates from another country or uses a multilingual support structure, language barriers (Portuguese-English) and time zone differences may slow down communication. Clear escalation paths and dedicated support channels are essential to prevent miscommunication and ensure seamless coordination between your HR team and the EOR.
How Does Employer of Record Brazil (EOR) Differ From Usual HR Software?
1. Employer of Record (EOR)
An EOR in Brazil serves as the legal employer of your workforce, handling all administrative and legal responsibilities under CLT (Brazil’s labor law). The EOR manages contracts, payroll, taxation (INSS, IRRF), FGTS contributions, terminations, and union compliance. It also absorbs legal risks and ensures full adherence to federal and regional laws.
Key responsibilities of an EOR in Brazil include:
- Full payroll processing and tax reporting
- Compliant labor contracts and benefit administration
- Union agreement compliance and regional regulatory support
- Legal risk and liability mitigation
An EOR Brazil partner provides a complete operational and legal solution for companies entering Brazil without needing to set up a CNPJ or subsidiary.
2. HR Software
HR software offers tools to manage internal HR operations like employee records, recruitment, performance reviews, and training programs. However, HR software does not serve as the legal employer nor does it manage compliance with Brazilian labor or tax laws.
Key features of HR software include:
- Employee records and organizational chart management
- Applicant tracking and performance evaluation
- Internal time tracking and leave management
- Automation of HR workflows and reporting
While HR software enhances HR efficiency, it does not replace the legal infrastructure and compliance capabilities that an EOR provides. For foreign companies without a legal presence, HR software alone is insufficient for compliant hiring in Brazil.
How Much Does It Cost to Avail Services Under EOR Brazil?
Scope of Services
EOR pricing in Brazil depends on the scope: payroll-only solutions are more affordable, while full-service plans covering benefits, compliance, and union obligations come at a premium. Additional support for visa sponsorships, legal disputes, or expatriate management may add to the cost.
Employee Strength
Most EORs charge on a per-employee-per-month (PEPM) basis. Pricing may vary based on the number of employees, with volume discounts available for larger teams. If managing only a few employees, fixed costs may feel relatively higher per head.
Complexity of Employment Regulations
Brazil’s labor laws include union negotiations, mandatory benefits (13th salary, vacation bonus), and state-specific rules. Industries like finance, healthcare, and education may require specialized compliance measures, impacting the complexity and cost of services.
Customization and Additional Services
Premium EOR providers offer tailored solutions such as health plan negotiations, regional legal consulting, and FGTS/severance calculations. These services improve workforce management but come with added costs.
Technology Infrastructure
Some EORs offer advanced cloud platforms to manage contracts, payslips, compliance documents, and HR analytics. These tools improve transparency and user experience but may carry a higher service fee.
Pricing Models and Contract Terms
EORs in Brazil typically use monthly subscription models (PEPM), with flat rates for small teams and negotiated rates for enterprise accounts. Long-term contracts often include reduced rates, while short-term or project-based hiring may attract setup or exit fees.
Conclusion: EOR Brazil
The Employer of Record (EOR) Brazil model is a powerful and compliant way for businesses to enter and operate in the Brazilian market without forming a legal entity. With robust labor laws, union governance, and localized tax frameworks, Brazil can be complex to navigate—making EOR services invaluable.
An EOR Brazil partner helps companies ensure full compliance with labor laws, manage payroll and benefits, and reduce legal exposure. Whether testing a new market, building a remote team, or scaling operations, EORs offer speed, security, and operational ease.
For companies expanding into Brazil, the EOR model provides strategic advantages, including faster hiring, reduced risk, scalable operations, and full support with payroll, taxes, and local HR. With an experienced EOR partner, your business can focus on growth, while all administrative and compliance functions are expertly managed.
FAQs – Employer of Record (EOR) Brazil
How does an Employer of Record ensure compliance with local labor laws in Brazil?
An Employer of Record (EOR) ensures compliance with Brazil’s labor laws (CLT) by managing payroll, social security (INSS), FGTS contributions, labor contracts, tax filings, and union obligations on behalf of the hiring company.
What are some key Brazilian labor laws that an EOR helps navigate?
An EOR helps navigate key labor laws such as the Consolidation of Labor Laws (CLT), FGTS regulations, 13th salary requirements, vacation and severance rules, and collective bargaining agreements.
How does an EOR act as the legal employer for a company’s workforce in Brazil?
An EOR becomes the legal employer by taking responsibility for all formal employment aspects—issuing contracts, handling payroll and benefits, managing tax and social security contributions—while the client manages daily work assignments.
What are the benefits of using an Employer of Record in Brazil?
Using an EOR in Brazil ensures legal compliance, simplifies HR administration, speeds up hiring without needing a local entity, and mitigates risk related to labor disputes and tax compliance.
How does an EOR help companies comply with Brazilian employment laws when hiring international employees?
An EOR ensures that foreign employees working in Brazil meet immigration and labor regulations, including work visa sponsorship (VITEM V), registration with the Federal Police, and compliance with Brazilian tax and social security laws.
Is EOR legal in Brazil?
Yes, EOR services are legal in Brazil. They operate under the CLT and other labor codes, assuming the legal employer role while adhering to all mandatory employment and tax regulations.
Can an EOR help manage employment contracts for a company’s remote workers in Brazil?
Yes, an EOR can draft and manage compliant CLT-based contracts for remote employees in Brazil, covering salary, working hours, benefits, and union agreements.
What are the benefits and challenges of hiring in Brazil?
Benefits include access to a skilled workforce, a strong labor rights framework, and a large domestic market. Challenges include navigating union rules, high employer taxes, and complex regulatory compliance.
How does an EOR support companies in providing employee benefits to their Brazilian workers?
An EOR ensures that employees receive all mandatory benefits such as FGTS, INSS, vacation pay, 13th salary, health insurance, and others required by law or union agreements.
Does EOR have a platform and what features does it include?
Yes, EOR platforms typically include features such as payroll automation, tax filings, digital contract management, benefits tracking, HRIS integration, and secure document storage compliant with Brazil’s LGPD (data protection law).
How much does an EOR cost in Brazil?
EOR service costs in Brazil vary based on the number of employees, scope of services, and industry. Fees typically include a monthly per-employee charge, one-time setup fees, and optional charges for benefits management or visa support.
Which is the best employer of record service in Brazil?
The best EOR provider depends on your business goals and industry. Leading options include global EOR firms like Asanify, Deel, Oyster, Remote, and region-focused providers with deep knowledge of Brazilian labor law and tax compliance.
What is the difference between EOR and PEO?
An EOR acts as the legal employer, assuming full compliance responsibility. A PEO (Professional Employer Organization) shares HR duties in a co-employment model, typically used when a legal entity already exists in Brazil.
What are the advantages of partnering with an EOR for legal compliance when managing a global workforce?
An EOR ensures country-specific compliance, handles cross-border tax issues, speeds up hiring, and reduces legal exposure—making it easier to manage international teams while focusing on business growth.Is there a minimum or maximum number of employees I can onboard using Asanify?
Asanify is designed to scale with your business. There is no strict limit on the number of employees—it supports both small teams and large-scale operations across Brazil and globally.
Not to be considered as tax, legal, financial or HR advice. Regulations change over time so please consult a lawyer, accountant or Labour Law expert for specific guidance.