Brazil has many different mandated compensation and benefits laws, and many employers offer employees supplemental benefits. Before you onboard employees, make a point to learn every aspect of Brazil's employment law and...
Read MoreBrazil has many different mandated compensation and benefits laws, and many employers offer employees supplemental benefits. Before you onboard employees, make a point to learn every aspect of Brazil's employment law and how you can stay competitive by offering top-of-the-line benefits.
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Brazil has many different mandated compensation and benefits laws, and many employers offer employees supplemental benefits. Before you onboard employees, make a point to learn every aspect of Brazil’s employment law and how you can stay competitive by offering top-of-the-line benefits.
In addition to regular pay, Brazilian employees are entitled to a 13th salary paid in two instalments each year: the first installment is paid between February and November, and the second in December. The 13th month payment is a legal benefit and is not part of the base salary. The average of total variable compensation for the calendar year is factored into the 13th month salary as well, as commission and bonus payments are part of the employee’s salary as per the Brazilian legislation. The 13th month salary is also due pro-rated upon termination.
The minimum wage is 1,212.00 BRL per month as of 2022, according to Brazil compensation laws. The minimum wage is expected to increase to 1,320.00 BRL in May 2023. If you work with Globalization Partners, though, we observe a minimum wage of 1,741.00 BRL per month. Along with the minimum wage, employees also have the right to a non-decreasing salary.
Unions and collective bargaining agreements are common in Brazil. Compensation and benefits might vary based on industry and specific labor relations defined by a union.
The Brazilian government provides basic health insurance. However, it is market practice to offer supplemental benefits such as medical and dental insurance. Telework allowance and tuition assistance are also frequently offered.
Mandated (by law or collective bargaining agreement) benefits include a monthly meal voucher, transportation vouchers, and life insurance at a standard rate for a family of three
As part of our employer of record service, Globalization Partners can offer to new employees supplemental medical and dental coverage.
Because Brazil mandates many employee benefits, it is essential to make sure every employee gets what they are entitled to. If you choose to handle Brazil benefit management alone, you may need to hire a local attorney or another expert in employment law. It is also helpful to hire a few trained professionals to disperse benefits to your employees.
You can also choose to work with a Brazil benefit outsourcing company. As a global PEO, Globalization Partners can manage benefits for your company and make sure you are well within the country’s employment guidelines. We can also act as the employer of record.
As part of the country’s compensation restrictions, every employee must make at least the applicable minimum wage, receive statutory benefits, and get the proper amount of time off.
Additionally, an annual bonus payout is more common in Brazil than monthly commissions. Commissions paid throughout the year carry a social charge of 80%, while a yearly bonus is only 40%.
Benefits planning will be one of many processes you work through when you expand to a new country. Developing a competitive plan will help your company stand out in the market. When you’re employee benefits planning in Brazil, you should consider factors like health insurance, market competitiveness and compliance requirements.
Your benefits plan will be one of the best ways to attract talent and build your team in Brazil. Designing a competitive plan is valuable because it will make your company stand out in the labor market and encourage people to apply for your vacancies. Benefits are also an excellent way to show your workers how much you value them, which often improves retention.
While you’ll be responsible for legally required benefits, you can also offer additional perks will that make your company more competitive in the market. In Brazil, the labor laws require many types of benefits for employees, so your supplemental provisions may require more creativity than they would elsewhere. Possibilities include:
The country requires many benefits for employees, including:
The social security fund covers provisions for employees, including basic medical care, pensions, and extended sick leave payments.
Designing a benefits plan takes careful consideration. While you want to account for your employees’ needs, you have to remain within your company’s financial abilities to stay operational. If you follow a few steps, you can gather the information you need to find this balance.
During this first step, you should become familiar with your company’s earnings and how you intend to allocate your funds. This phase can help you create a budget for your benefits packages so you don’t overextend your resources.
When considering your goals, think about how your use of benefits will contribute to them. For instance, if you want to focus on employee retention, you might choose to build a smaller team so you can provide an extensive benefits package.
It’s a good idea to conduct some research to understand employee needs and what workers expect from your industry. During this stage, you can explore other companies similar to yours to learn more about their benefits offerings. The information you gather will give your planning more direction.
Surveying workers in your area can help you understand employee needs. You can ask employees to rate a list of benefits in order of priority, which can help you plan your provisions later on.
With the information you gathered about the market and your resources, you can start making informed decisions about your benefits plan. It’s wise to start with the required benefits first and use your remaining budget for high-priority supplemental benefits.
It’s difficult to define an average cost for benefits since it varies significantly between companies. Costs will depend on the type of benefits you offer, if the employee has dependents, among others. It’s helpful to determine a percentage of your company’s income as benefits spending. Your budget will depend on your other goals and expenses.
The advantage of setting a percentage is scalability. As your company makes more revenue, you’ll have a bigger budget to spend on additional employee provisions.
Much like the cost, calculations will vary. While social security benefits are guaranteed, the country operates on a progressive scale for contribution percentages.
The country defines taxable income as:
Most benefits will fall within these categories, but there will be exceptions. For example, if you provide a transportation allowance, that will be considered nontaxable income.
The healthcare system is universal to all permanent residents and nonnationals in Brazil. However, some health costs aren’t covered by this care, and wait times can be long. Most employers offer supplemental insurance to fill in the gaps, making it a market standard although it’s not legally required.
Globalization Partners offers international resources and expert support to help you build benefits plans in new countries.
Rather than trying to keep up with your own benefit management, you can work with a global compensation outsourcing company that handles both benefits and payments.
Globalization Partners offers all the services you need to successfully open a subsidiary in Brazil, pay your employees, manage benefits, and stay compliant. Contact us today to learn more about our services.
If you’re ready to grow your business, or you have questions about a specific country, complete the form. One of our experts will be in touch shortly.
