Guide to hiring in Brazil

Key takeaways

• Understand Brazil's employment requirements: The Consolidation of Labor Laws (CLT) governs employment requirements, including worker protections, leave, termination, and working hours.
• Budget beyond base salary: You need to account for a variety of statutory costs, such as the 13th-month salary, the FGTS severance fund, and vacation pay.
• Choose the right hiring model: You can set up a local entity or use an employer of record, depending on your company's needs and long-term goals.
• Hire without establishing an entity: G-P EOR lets you hire, onboard, and manage professionals in Brazil without setting up a local entity.

Brazil is the largest country in South America by both land area and population (213.8 million in 2026), and it's the 10th largest economy in the world. The Consolidation of Labor Laws (CLT) governs Brazil's employment laws. The CLT outlines mandatory benefits like the 13th-month salary, paid vacations, and strict rules on termination and overtime.

Before expanding into Brazil, you'll need to understand contracts, taxes, wages, benefits, and other employment laws. Our guide will tell you everything you need to know about hiring in Brazil.

What to know before hiring in Brazil

If you're expanding your business into Brazil for the first time, there are important legal requirements to be aware of. These norms and laws influence hiring practices in Brazil and many aspects of the employer-employee relationship, including compensation and benefits.

G-P Gia™, our AI-powered global HR agent, can answer your toughest compliance questions across 50 countries — including Brazil — and all 50 U.S. states. Reduce your reliance on outside counsel and cut the time and cost of compliance by up to 95% with Gia.

Here are five things to know about hiring in Brazil.

1. Employee-centric regulations

Brazil's employment laws strongly favor employees. Workers have a wide range of statutory rights and benefits, including paid leave, anti-discrimination protections, and severance entitlements. These are greater than those in many other countries.

Employee termination in Brazil is highly regulated. Dismissals, especially those without cause, must adhere strictly to notice periods, severance payments, and documentation. The risk of post-termination lawsuits is high.

Written employment contracts aren't legally required for all employment relationships, but they are strongly recommended. Oral contracts are valid under the CLT.

2. Official languages

Portuguese is the official language, spoken by over 99% of the population. Brazil is the only Portuguese-speaking nation in the Americas. With the growth of Mercosur (the Southern Common Market) and increased trade, the economic necessity of Spanish has grown in schools and businesses. As with most countries, you're more likely to hear English in city centers in Brazil than in other parts of the country, but English is not widely spoken.

3. Working hours and compensation

The legal maximum workweek is 44 hours. This is spread across eight hours per day, Monday through Friday, and four hours on Saturday, or as agreed upon in collective bargaining agreements (CBAs). Employees get a minimum one-hour lunch break if they work more than six continuous hours. Alternative schedules are allowed if established by a CBA or written agreement.

Overtime is paid at a minimum of 150% for hours worked beyond the standard daily or weekly limits (Monday to Saturday). Work performed on Sundays or public holidays has to be paid at 200% unless a compensatory day off is provided. CBAs can set higher overtime rates.

The minimum wage in Brazil is RD 1,621.00 per month in 2026. Some states, like São Paulo, have higher regional minimum wages, and employers must pay the higher applicable rate. The minimum wage is adjusted annually based on inflation and GDP growth.

While not a statutory requirement, annual salary adjustments are common due to union negotiations and inflation.

The 13th-month salary is a mandatory annual bonus. It's equal to one month's salary, paid in two installments, one by Nov. 30 and the second by Dec. 20. It's calculated as one-twelfth of the monthly salary for each month worked in the calendar year. Commissions and certain bonuses can be included if they're part of regular compensation.

4. Vacation and sick leave

Annual leave requirements are generous in Brazil compared to other countries. After one year of service, employees get 30 days of vacation leave. Employees can divide their vacation time into three periods: one lasting at least 14 days, and two more lasting at least 5 days. Employees have the option to cash in up to 10 vacation days. These vacation days are paid, and employers must pay a vacation bonus equal to one-third of the employee's monthly salary.

Employees in Brazil also get paid sick leave. When an employee misses work due to a medical issue, employers must pay them for their first 15 days of illness, as long as the employee provides a doctor's note. If the employee misses more than 15 days due to their medical condition, then the National Institute of Social Security (INSS) will take over.

5. Required benefits

Brazil has generous statutory benefits, including paid vacation, 13th-month salary, social security (INSS), the severance fund (FGTS), and mandatory meal and transportation vouchers.

Employers must withhold a portion of employees' pay for INSS and make an employer contribution. The employer's rate is typically 20% of payroll plus extra contributions for workplace accident insurance and third-party entities, which can add 5.8% or more, depending on the company's risk profile and sector.

Employee INSS contributions are withheld at progressive rates (7.5% to 14% in 2026) based on salary.

Meal vouchers and food vouchers aren't required by federal law. However, Collective Bargaining Agreements (CBAs) can mandate them, and they are customary in many sectors.

Employers must deposit 8% of the employee's monthly salary into the FGTS account. This isn't withheld from the employee's pay; it's an extra employer cost. FGTS is available to employees upon termination without cause, retirement, or in other circumstances like serious illness or a home purchase.

Hiring models for global companies in Brazil

When hiring in Brazil, you have several options. The right model depends on your long-term plans, workforce size, and business activities. There are four common models:

• Direct employer registration: If you already have a legal entity, you can register your company as an employer and hire in Brazil directly. This allows you to control all your HR operations. Your company will manage tax withholding, payroll, statutory benefits, eSocial reporting, and employment documentation. Direct hiring is ideal if you already have an established local entity and the resources to manage local employment requirements.
• Employer of record: If you don't have a legal entity in Brazil, you can hire professionals in Brazil through an employer of record. With G-P EOR, you can hire, onboard, and manage professionals in Brazil without worrying about employment requirements. G-P will handle the country-specific compliance requirements, leaving you to manage the company's day-to-day responsibilities. This model is ideal when you need to hire quickly or test the market before making long-term plans.
• Subsidiary or branch: Setting up a subsidiary or branch makes sense when you plan to maintain long-term operations in the country. A local entity will give your company a legal presence in Brazil. Setting up a subsidiary or branch requires more time and resources. In addition, you will be responsible for employment compliance, payroll, taxes, benefits, and other employment obligations.
• Independent contractor and misclassification risk: If you have temporary or need-based work and it isn't necessary to create a traditional employment relationship, hiring independent contractors makes sense. However, classifying your workers depends on their actual working responsibilities. If their responsibilities function like employment, Brazilian authorities can reclassify the contractor as an employee. You will then be responsible for social security contributions, FGTS payments, taxes, employment benefits, and other liabilities.

If you plan to hire contractors in Brazil, G-P Contractor™ allows you to manage contractor payments and create contracts so that you can meet all compliant contractor requirements.

Top hiring hubs in Brazil

Brazil's major cities have different strengths. Knowing what each city has to offer allows you to focus your hiring efforts in the right place and fill roles faster.

The top talent hubs in Brazil are:

• São Paulo is Brazil's largest city and the main business, financial, and technology center. It hosts multinational companies and startups, making it the top hiring hub for a wide range of industries.
• Rio de Janeiro is known for its energy, oil and gas, tourism, and creative industries. The city is a major employment center, especially for roles in engineering, media, and services.
• Belo Horizonte is a hub for mining, technology, and business services with a growing start-up ecosystem.
• Brasília is the nation's capital. Brasília is the center for government, public administration, and related services, attracting talent in law, policy, and administration.
• Curitiba is known for its advanced manufacturing, automotive, and technology sectors, as well as its reputation for urban planning and sustainability.

Key industries in Brazil

Understanding Brazil's top industries allows you to benchmark salaries and benefits. You can use this insight to make smart choices about where to invest and grow your talent pool.

The top industries in Brazil include:

• Financial services: Brazil has one of the largest financial markets in Latin America. This includes major commercial banks, investment firms, and the B3 (Brazil, Bolsa, Balcão) stock exchange, located in São Paulo.
• Technology and digitalization: Brazil is a hub for technology in Latin America, with a growing startup ecosystem and many unicorn companies. This includes areas like fintech, proptech, and edtech.
• Manufacturing: Brazil is a leading industrial nation globally. Areas include automotive (manufacturing and assembly of cars, trucks, and auto parts), aerospace (home to Embraer, one of the world's largest commercial jet manufacturers), and chemicals and petrochemicals (processing crude oil and natural gas).
• Energy, oil, and gas: Brazil is a global producer of oil, thanks to large offshore pre-salt reserves. The state-owned company Petrobras is a big force in this sector. Brazil is a global leader in renewable energy, with 89% of its electricity generation coming from renewable sources, primarily hydroelectric.
• Agriculture: Brazil is important in global food security and commodity markets. Brazil is the world's largest producer of soybeans, coffee, and sugarcane. The country is also a big producer of corn, beef, and chicken.

Cost of hiring an employee in Brazil

Whether you're hiring one employee or an entire team in Brazil, expenses are inevitable. Budget for the following:

• Setting up an entity (unless you partner with an employer of record)
• Advertising job positions
• Paying referral bonuses to employees with connections in Brazil
• Paying an in-house hiring committee
• Traveling to and from Brazil, including hotel stays, meals, and transportation
• Using a background check service for screening candidates
• Drafting compliant employment contracts, legal review, and consultation with HR and legal experts
• Costs for providing computers, phones, and software licenses
• Expenses for onboarding materials and initial training
• Mandatory employer contributions
• Costs for maintaining required tax and payroll records and documentation

According to G-P Verified Sources from Gia, the employer burden rate in Brazil, which includes costs triggered on top of salaries, ranges from 60% to 100%, excluding accident insurance that can vary.

What does a company need to hire employees in Brazil?

Make sure you cover these essentials before expanding your team in Brazil:

• Incorporate your company in Brazil.
• Register your company name with the Board of Trade in the state where your business will operate.
• Register with the federal revenue service to get a tax ID.
• Register with the relevant state tax authority and get a state tax registration.
• Register with the local municipality for an operating license.
• Open a local bank account.
• Register with the INSS for social security contributions.
• Register with the severance indemnity fund (FGTS) system.
• Register with the Ministry of Labor and Employment to report new hires.
• Set up a compliant payroll system that calculates and withholds all statutory deductions.
• Make sure the system is integrated with eSocial.
• Draft employment contracts in Portuguese.
• Set up processes to provide required benefits.
• Register with the occupational health and safety authorities.
• Keep accurate records of employment contracts, payroll, time tracking, and all labor-related documents.

Setting up a subsidiary in Brazil can take weeks or months. Use G-P EOR to hire full-time employees in Brazil without setting up your own entity. Build your team at a lower cost and with peace of mind that you're doing so compliantly.

Steps to hiring in Brazil

The hiring process in Brazil is similar to the one you're likely familiar with in your own country. The hiring process follows five basic steps: advertising the job, evaluating applications, interviewing candidates, sending job offers, and onboarding new employees.

1. Advertising job vacancies

Create a detailed job description, including required qualifications, responsibilities, and benefits. Internships aren't considered employment under the CLT. Job ads for internships must clearly identify the position as an internship and meet all legal requirements for such roles.

LinkedIn, Catho, InfoJobs, and Vagas.com are popular job sites in Brazil.

2. Evaluating applications

Collect applications and review resumes. Screen applications and conduct interviews in compliance with local laws.

3. Interviewing candidates

Interview candidates who made it onto your shortlist. You can do these interviews in person or virtually. Verify references and, if relevant, conduct background checks in compliance with Brazilian data protection laws (LGPD).

Gia can help you create questions that follow anti-discrimination laws in Brazil, so you can find the best fit for the role while complying with local regulations.

4. Making job offers

Contact your chosen candidate to offer them a position with your company. Offers are typically made in writing. Draft an employment contract in Portuguese, including all mandatory clauses and statutory benefits. Both parties must sign the written contract.

5. Onboarding new employees

Now you can onboard new employees. Register your new hire with eSocial, INSS, and FGTS. Update the employee's digital work card.

If you're working with G-P EOR™, you won't have to worry about the administrative burden of onboarding. We'll streamline the process, so you can focus on training your new hire and integrating them into your company culture.

Hiring contractors in Brazil

Working with independent contractors in Brazil can be a cost-effective way to test the market and build a presence without the commitment of full-time employees.

Contractors based in Brazil understand local consumer behavior, rules, and business practices. They'll be ready to start working quickly with their own equipment and established work processes.

Hiring contractors allows you to easily adjust your talent pool based on your business needs without the complexities and costs of employment.

Before you enter an agreement with an independent contractor in Brazil, consider the following.

1. Employees vs. independent contractors

It's important to understand the difference between employees and independent contractors. In Brazil, employers hire employees to do work and, in return, pay them a regular salary and benefits. Independent contractors provide services. Unlike employees, contractors set their schedules, use their own equipment, and work on specific projects rather than having an ongoing role.

2. Penalties for misclassification

Classifying someone as a contractor when they're not can lead to severe penalties. If misclassification occurs, you'll need to:

• Retroactively pay all statutory employment rights and benefits.
• Face administrative fines for failing to register employees, nonpayment of social charges, and other violations.
• Back pay social security (INSS) and FGTS contributions, plus interest and monetary correction.

3. How to pay contractors

G-P Contractor™ takes away the messy, time-consuming process of hiring and paying international contractors. You can create and issue contracts and pay contractors with just a few clicks, all while ensuring a compliant process.

Hire employees and contractors in Brazil with G-P

Our Global Employment Platform and its AI-powered products, EOR, Contractor, and Gia, support companies as they build and manage global teams.

G-P is the recognized leader in global employment with more than a decade of experience; the largest team of HR, legal, and compliance experts; and a global proprietary knowledge base.

Make your expansion to Brazil easier with G-P. Contact us or book a demo today.

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