Employer of Record (EOR) in Brazil

In Brazil, Employer of Record (EOR) services help companies manage hiring. They ensure compliance with the country’s detailed CLT labor rules, payroll obligations, and statutory benefits. A modern EOR covers the full employment management workflow. This includes drafting compliant contracts in Portuguese, executing payroll, managing social security contributions, and supporting HR administration.

If you don't want to set up a local entity, G-P EOR provides the fastest path. It eliminates entity setup and reduces the operational burden of local registrations. Conversely, setting up a Brazilian entity provides direct control. However, this path demands significant time, capital investment, and continuous compliance tracking.

The right EOR helps companies scale their global workforce in Brazil with less risk. It's a strategy that keeps internal teams focused on core business priorities

Hiring in Brazil with an EOR

Navigating Brazil's strict tax and legal obligations demands deep local expertise that many businesses find complex. The Consolidação das Leis do Trabalho (CLT) protects talent through rigid regulations, creating operational friction for expanding businesses. G-P EOR eliminates this complexity for your business by acting as the legal employer. When you negotiate terms, you must agree on a gross salary in Brazilian Reais (BRL). Our platform manages these critical compliance factors:

• Positions of trust (cargo de confiança): Employees in senior strategic or managerial roles can be classified as exempt from overtime tracking. To qualify, their role must involve significant authority, and they must receive higher compensation, with a function gratification of at least 40% over their own effective or base salary.

• Time control and overtime: Employees in non-trust positions are legally entitled to overtime pay for any hours worked beyond the standard limits. Accurate time tracking is mandatory and a common source of labor disputes.

• Mandatory salary increases: Salaries are subject to annual adjustments based on inflation, as stipulated by Collective Bargaining Agreements (CBAs) negotiated by unions for specific industries. The effective date of these adjustments, known as the data-base, varies by union and is not fixed to a single month.

• Equal pay: Brazil enforces a strict equal pay for equal work principle. Furthermore, Law No. 14,611/2023 requires private companies with 100 or more employees to participate in biannual salary transparency and remuneration-criteria reporting. If pay inequality is identified, an action plan may be required.

Managing these complex CLT mandates independently invites severe financial and legal risk. The G-P Global Employment Platform automates onboarding, payroll execution, and benefit administration across Brazil^<!---->. We combine automated compliance technology with the industry's largest team of in-country legal experts^{<!----><!----><!----><!---->}. This protection keeps your internal teams focused entirely on market capture.

Employment contracts in Brazil

Best practice is to implement a strong, written employment contract in Portuguese, detailing all terms of employment, including compensation, benefits, and termination requirements.

An offer letter and employment contract should always state the salary and any compensation amounts in BRL. This ensures compliance with Brazilian legal requirements. Employers must formally register the employment relationship in Brazil's eSocial system before the employee starts work. This information populates the employee's digital labor card (Carteira de Trabalho e Previdência Social - CTPS Digital). This registration includes key details such as hire date, position, salary, and contract duration.

Probation period in Brazil

A probationary period can be set through a contrato de experiência for a maximum of 90 calendar days, often structured as an initial 45-day period with a 45-day extension. The extension should be express and documented, and the contract generally may be extended only once. At the end of the probationary period, the contract can be terminated with reduced severance costs.

Brazil non-compete agreements

While not explicitly regulated by labor law, non-compete clauses are more likely to be enforceable if they meet court-established criteria: a limited timeframe, commonly up to two years, a geographic scope tied to the employer’s legitimate competitive interest, a scope strictly related to genuinely competing activities, and separate financial compensation for the restricted period.

Working hours in Brazil

The standard workweek is up to 44 hours, typically limited to 8 hours per day unless a valid collective agreement or specific schedule provides otherwise. Shifts exceeding 6 hours generally require a meal or rest break of at least 1 hour, which is not counted as working time. Adhering to these limits is critical to avoid overtime claims.

Leave and holidays in Brazil

Brazil public holidays

Brazil observes numerous public holidays at the federal, state, and municipal levels. National public holidays include:

• New Year's Day (January 1)

• Good Friday

• Tiradentes' Day (April 21)

• Labor Day (May 1)

• Independence Day (September 7)

• Our Lady of Aparecida (October 12)

• All Souls' Day (November 2)

• Republic Proclamation Day (November 15)

• Christmas Day (December 25)

While not official federal holidays, Carnival and Corpus Christi are widely observed and typically treated as non-working days.

Annual leave (vacation)

Companies must be careful to comply with local labor laws regarding vacation time. After 12 months of service, employees are generally entitled to 30 calendar days of paid vacation. This vacation can be taken in a single period or split into up to 3 periods, with one period being at least 14 days and the others at least 5 days each. The entitlement may be reduced for excessive unjustified absences during the accrual period. Employees must also receive a vacation bonus, the terço constitucional, equal to one-third of their regular vacation remuneration.

Sick leave

If an employee provides a valid medical certificate, the employer generally pays their salary for the first 15 days of sick leave. From the 16th day, the employee may receive sickness benefits from the National Institute of Social Security (INSS), subject to eligibility, INSS approval, and medical assessment. For recurrence of the same illness, connected absences may affect whether a new employer-paid period applies.

Maternity and paternity leave

• Maternity leave: Pregnant employees are generally entitled to 120 days of paid maternity leave. They have job stability from confirmation of pregnancy until 5 months after childbirth, and generally cannot be dismissed without cause during this period. The leave is paid by the INSS.

• Paternity leave: Non-birthing parents are entitled to 5 days of paid leave until the end of 2026. Gradual increase as of 2027, as follows:
  • 10 days starting January 1, 2027.
  • 15 days starting January 1, 2028.
  • 20 days starting January 1, 2029.
  • Note: The leave period is increased by 1/3 (one-third) in cases involving the birth or adoption of a child or adolescent with a disability.

• Extended leave (Empresa Cidadã): Companies enrolled in the government's Empresa Cidadã program can offer extended maternity leave of 180 days and paternity leave of 20 days. This is a highly expected benefit in the professional market.

Compensation and benefits in Brazil

13th-month salary

In Brazil a 13th-month salary is a mandatory annual bonus equivalent to one month's pay. It is typically paid in two installments: the first by November 30 and the second by December 20. If a deadline falls on a non-business day, employers should generally pay earlier to avoid late-payment risk. It is crucial to clarify during negotiations whether a salary offer is inclusive or exclusive of this bonus.

Mandatory and common benefits in Brazil

Navigating Brazil’s employee benefits requires distinguishing between what is legally required, mandated by a CBA, or considered a market standard. An EOR ensures compliance with all applicable requirements.

• Transportation voucher (Vale-Transporte): Legally required for all employees who use public transportation for their commute. The employee co-pays a portion. The employer can deduct the lower of the actual commuting cost or 6% of the employee’s base salary.

• Meal vouchers (Vale-Refeição/Alimentação): While not a federal mandate, meal vouchers are required by most CBAs and are a standard market expectation.

• Health insurance: Brazil has a public healthcare system (SUS), but private health insurance is a highly valued and common supplementary benefit offered by employers to attract top talent.

• Life insurance: Often required by industry-specific CBAs.

Payroll and taxes in Brazil

Brazil social security contributions

Payroll in Brazil includes several mandatory contributions:

• INSS (National Institute of Social Security): Both employers and employees contribute to the INSS, which funds pensions, sick leave, maternity leave, and other social benefits. Employee contribution rates are progressive and deducted from their salary.

• FGTS (Severance Guarantee Fund): Employers generally must contribute 8% of an employee's gross monthly compensation into a dedicated FGTS account. A reduced 2% rate may apply in limited cases, such as certain apprentice contracts. This is a severance fund, not a pension, which the employee can access under specific circumstances, most notably termination without cause.

Termination and severance in Brazil

Terminating an employment contract in Brazil is complex and must follow strict procedures. For a termination without cause, the employer must provide a notice period (aviso prévio) of 30 days for employees with up to one year of service. This increases by 3 days for each completed year of service with the same employer, up to 90 days total. Only 30 days can be worked; any additional days must be paid as indemnity.

The final severance payment for a termination without cause includes:

• Salary balance

• Payment for the notice period (if not worked)

• Prorated 13th-month salary

• Prorated vacation pay plus the 1/3 vacation bonus

• A penalty of 40% of the employer’s FGTS deposits during employment, including monetary updates, paid by the employer.

Employee transfers in Brazil

Under the principle of 'succession of employers', employment contracts are automatically preserved during a merger or acquisition. However, transferring an employee from one unaffiliated company to another is not permitted and requires a formal termination and re-hire.

An EOR simplifies workforce management, as the employment relationship remains with G-P, allowing for seamless support of your company's evolving needs without altering the legal employment status.

Why G-P?

G-P EOR is the award-winning, AI-powered SaaS platform that empowers ambitious companies to build global teams. Onboard, manage, and pay top talent in over 180 countries in minutes, bypassing the typical time, cost, and complexity of local entity setup. G-P EOR is the preferred partner for leading HCM, PEO, and payroll platforms. Bring your workforce data together in one place to maintain existing workflows while guaranteeing consistent and accurate data across your integrated systems.

Request a proposal today to learn more.

FAQs