BrazilDiscover an employer’s guide to employment laws, regulations, and Employer of Record (EOR) in Brazil.
Want to hire in Brazil? An EOR can help
An Employer of Record (EOR) can streamline your expansion to Brazil. You can hire and onboard employees without setting up a local entity then outsource payroll, benefits, tax, and more.
Acting as the legal employer, an EOR helps you stay compliant with local laws so you can focus on your core business.
How to hire in Brazil
Step 1: Choose between establishing a local entity and using an EOR
When hiring employees in Brazil, you have two primary options: setting up a local entity or using an Employer of Record (EOR) service.
Establishing a physical presence in Brazil offers complete control over your HR function. However, this route demands significant time, capital, and resources. You’ll also be fully responsible for staying compliant with complex Brazilian labor laws.
Partnering with an Employer of Record (EOR) provides a streamlined approach to hiring and managing employees. EORs expedite onboarding and handle HR functions while you retain control of your business operations.
If long-term market penetration and building a substantial workforce are your priorities, a local entity can work. However, for rapid expansion, an EOR offers a more agile, flexible solution.
Step 2: Finding the right EOR
Selecting the right Employer of Record (EOR) for your Brazilian operations is crucial. An unsuitable EOR can result in compliance issues, unforeseen costs, and a subpar experience for your employees. Keep these key factors in mind:
- Legal compliance. Ensure the EOR has a strong understanding of Brazilian labor laws, employee rights, tax requirements, and local benefits. Check their track record and ask about their experience with similar industries.
- Customer service. Confirm that the EOR provides ongoing support. Multiplier, for example, offers round-the-clock support and dedicated account managers, rather than relying solely on automated systems.
- Transparent pricing. Be wary of EORs that offer low initial prices but have hidden fees or complex pricing models. Make sure you understand all potential costs before making a decision.
- Total cost of ownership. The lowest-priced option might not always be the most cost-effective. Sometimes, cheaper services can be less efficient and more expensive in the long run. Choose an EOR that balances cost with quality and meets your specific needs.
Step 3: Employing and onboarding in Brazil
Send over the contract
Once you’ve chosen your preferred candidate, you need to issue a compliant employment contract. EOR can draft contracts that comply with Brazilian labor laws, allowing you to specify terms such as job duties, working hours, salary, and termination clauses. After preparing the contract, your EOR will securely send it to the employee and ensure that all required signatures are collected.
Enhance compensation with competitive benefits
To offer a compelling benefits package, an EOR can provide access to a range of locally managed options without you needing to engage directly with local vendors. It can also organize the necessary IT equipment and other resources to ensure the new hire can start effectively.
Get all your documentation in order
You’ll need to gather the new hire’s tax and banking details. If you’re using an EOR, this information will be collected automatically to set up payroll. The EOR will handle all necessary documentation, simplifying the process and reducing paperwork.
With the right EOR, you can outsource onboarding in Brazil, making the process more efficient and less burdensome for both you and your new employees.
Step 4: Run payroll for employees based in Brazil
Handling payroll for employees in Brazil involves handling local tax regulations and mandatory contributions. Brazil’s income tax system is progressive, with rates varying according to income levels.
Employers must also manage contributions to the National Institute of Social Security (INSS) and the Severance Indemnity Fund (FGTS).
The INSS provides benefits such as health coverage, disability support, and retirement pensions. Employers are required to contribute a portion of each employee’s salary to the INSS to ensure they receive the necessary benefits and medical care.
The FGTS is a fund that helps employees with severance payments and housing. Employers must contribute to the FGTS, which supports employees in times of termination and provides financial assistance for home ownership.
Maintaining compliance in Brazil can be challenging, especially for international companies without dedicated in-country HR teams. An EOR simplifies this by managing accurate and timely payroll, including all local taxes, contributions, and withholdings.
With the right EOR, you can streamline global payroll management for your international team through a single platform and avoid the complexities of dealing with multiple local providers.
Employ top talent in Brazil through an EOR
Onboard, pay, and manage all your international employees
Employment laws and regulations in Brazil
Brazil has a comprehensive legal framework governing employment, aimed at ensuring fair labor practices and protecting employee rights.
The Consolidation of Labor Laws (Consolidação das Leis do Trabalho) regulates employment conditions, such as working hours, rest periods, overtime pay, and termination procedures. It establishes minimum standards for employment agreements and ensures equitable treatment.
The standard workweek in Brazil is 44 hours, typically distributed over five or six days. Employees are entitled to overtime pay for hours worked beyond this limit. Additionally, employees must receive a break of at least one hour for meals if they work more than six hours a day.
Employers are required to provide written contracts detailing employment terms. These contracts must adhere to the CLT and other relevant regulations.
Employee benefits and compensation
Brazil’s national minimum wage is BRL 1,320 per month and labor laws mandate several standard employee benefits, including:
- Annual leave. Employees are entitled to 30 days of paid annual leave per year, which can be taken in one or two periods. This benefit accrues with service time and is in addition to public holidays.
- Sick leave. Employees receive up to 15 days of paid sick leave per year, with the employer paying the full salary. For sick leave extending beyond 15 days, compensation is covered by the National Institute of Social Security (INSS).
- Parental leave. Maternity leave is up to 120 days with full pay. Paternity leave is 5 days though companies participating in the “Citizen Company Program” may extend it to 20 days.
- Retirement benefits and workplace security. Employers must contribute to the National Institute of Social Security (INSS), which provides retirement pensions and benefits for work-related injuries and illnesses.
Employers in Brazil often enhance these statutory benefits with additional perks to attract and retain talent. For a tailored and competitive benefits solution, consider using services like Multiplier’s Global Benefits Administration platform which provides a comprehensive, localised benefits package for your international team.
Termination and offboarding procedures
Terminating employment in Brazil involves specific regulations for notice periods and severance pay. Indefinite-term contracts typically require a 30-day notice, while fixed-term contracts’ notice periods are defined by each contract.
Brazilian law mandates severance pay through the FGTS. Employers contribute to the FGTS monthly, and upon termination, employees receive the accumulated balance plus a 40% employer-paid penalty. Additionally, employees are entitled to a proportional 13th-month salary and accrued vacation pay.
Given the complexities of Brazilian labor law, engaging an EOR can streamline termination processes, ensure regulatory compliance, and facilitate a smooth transition for all parties involved.
Visa and work permit assistance
Foreign workers in Brazil must obtain the appropriate visas and work permits. Here are the main visa categories for working professionals:
- Work Visa (VITEM-V): For foreign nationals who have a job offer from a Brazilian employer. It is generally issued for up to two years and can be renewed.
- Permanent Residence Visa: For individuals who have lived in Brazil on a temporary work visa for a certain period (usually two years) and wish to transition to permanent residency.
- Investor Visa: For foreign investors who invest a minimum amount in a Brazilian business. It allows for temporary residence, and after two years, it can be converted into a permanent residence visa.
- Temporary Visa for Technicians and Managers: For foreign professionals filling technical or managerial roles.
Expert assistance can simplify visa and work permit application and renewal processes. For detailed guidance on managing your employees in Brazil, take a look at our Global Immigration services page.
Get started with Multiplier’s EOR services
Multiplier’s Employer of Record (EOR) services make it easy to expand your team into Brazil. With us, you can hire employees without setting up a local office and outsource HR tasks smoothly.
We take care of everything—from creating contracts that meet local laws to handling payroll and taxes. We also offer benefits that comply with local standards.
Book a demo with us today to learn more.
