Accountancy in Brazil

>> Employment in Brazil

Brazil has extensive Social Security Laws and Labour regulations that govern employer/employee relations. They are applicable to all employees in regular registered jobs except for public employees and civil servants who have separate regulations. The labour laws make no distinction between skilled and unskilled workers or between blue-collar and white-collar workers. All registered employees, including foreigners, are required to hold a labour booklet (carteira de trabalho) which must contain the employment terms.

Employees’ rights

An employment relationship comes with a series of rights defined by Brazilian legislation. In addition to such rights, collective labour conventions ensure certain categories of employees other wide-ranging rights.

Employees’ main rights are the following:

Social security

Every employee in the Social Security System is supported by monthly contributions from the employer, employee and the State.

Based on the monthly salary earned by the employee, the employer must pay:

  • 20% to the INSS;
  • 30% to several public and private institutions;
  • 50% as education salary; and
  • 2% as a compulsory insurance for labour accidents (SAT) paid to the Social Security (on average).

Depending on the type of activity, the contributions may be subject to specific charges and destinations.

Unemployment compensation fund (FGTS)

According to the Federal Constitution, it is compulsory for all employers to deposit monthly the equivalent of 8% of each employee’s compensation in a blocked saving account in the name of the employee. A dismissed employee is entitled to withdraw the total FGTS deposits made by the employer in their saving account, as well as interest, and a 40% fine (charged to the employer) added to the total amount deposited by said employer, plus 10% additional government penalty. Collective agreements may provide for further indemnity. There are some exceptions, e.g. when the employee is dismissed with Good Cause.

Prior notice

An employment contract for an undetermined period may be terminated at any time without good cause, upon a minimum of 30 days prior notice. There are additional costs depending on the length of time the employee has been in the company.


The employer is responsible for withholding the following taxes and contributions:

  • Between 8% and 11% of the employee’s monthly salary to the INSS;
  • Personal income tax ranging from 15% to 27.5%, depending on the employee’s monthly salary; and
  • One-thirtieth of each employee’s monthly salary to the employee’s union, to be paid once a year (this may vary according to the union agreement).

Expatriate personnel

Resident individuals are subject to tax on all income from abroad but can take credit for the foreign tax paid thereon, provided reciprocal treatment is accorded to Brazilian source income in the country from which the income is received.

Two types of Visa allow foreigners to work in Brazil:

Temporary visas

Provided there is an employment contract with a Brazilian company; the holder is entitled to work in Brazil for two years, renewable for as long as the contract regarding the holder’s permanence in the country is valid. Foreigners are deemed employees of the Brazilian company and are entitled to all labour rights, and are subject to Social Security System.

If an employee does not have a contract, a visa can be issued for foreign individuals involved in specific projects leading to know-how or technology transfer to Brazil, and the remuneration must come from foreign sources.

Permanent visas

These visas may be granted to those hired to work in Brazil for an indefinite period and are generally issued to senior executives of foreign companies being transferred to Brazil, or individuals with specialist skills not readily available in Brazil.

The Brazilian Authorities require minimum foreign investment of USD200 TH per expatriate worker duly registered by Central Bank. The investment can be reduced to USD50 TH if the company generates at least 10 direct jobs within 2 years of the foreigner’s appointment. In this case, the individuals are usually not entitled to labour rights but are subject to Social Security System.

Foreigners not in possession of one of these visas may not work in Brazil. Note that holders of business visas will only be able to enter Brazil to attend meetings, workshops and visits to clients, up to 90/180 days. These visa holders are not allowed to be registered as employees of a Brazilian entity.


Fringe benefits

Employers usually provide voluntary fringe benefits such as medical care, meals and transport. Many companies have private pension schemes, for which there is specific legislation. Group life insurance

is also very common in business activities, and some employers are obliged to provide some of these benefits according to the labour collective agreements.

Payroll rules and taxes


The maximum workday is eight hours and the maximum workweek is 44 hours, with one-hour break for rest. A special workday system is authorized for some professional categories. The minimum compensation for overtime is 50% higher than the hourly rate. Night work, (10pm to 5am), should be compensated at at least 20% above the usual rate.


The compensation paid may not be less than the minimum wage established by the Government or the Collective labour convention for each professional category and may be paid monthly, weekly or even per task, depending on the conditions established for the employment.

Weekly remunerated rest period

All employees have a right to a minimum of one day remunerated rest, which should preferably fall on Sundays.


Every employee, upon completing one year’s service, is entitled to 30 days’ vacation time.

One-third vacation bonus

Employees are entitled to receive a onethird bonus in addition to the normal compensation during annual vacation

13th Salary

In December of each year, the employer will pay the employee an extra compensation of one-month’s salary.

Latest version updated 20th December 2017

Country Breakdown





Brazilian Real


$ 1.8