Brazil is Latin America’s largest economy and its deepest tech talent pool, but it is also one of the most regulated and costly places to employ. Several changes took effect in 2026. On 1 January the minimum wage rose to R$1,621 a month and an income tax reform removed withholding on monthly income up to R$5,000. New INSS bands apply from the January 2026 payroll. Psychosocial risk rules became enforceable on 26 May 2026, and paternity leave starts rising from 1 January 2027. A constitutional amendment to cut the week to 40 hours is moving through the Senate but is not yet law.
Currency: Brazilian Real (R$ BRL)
Language: Portuguese
Regulatory Authority: Ministério do Trabalho e Emprego (MTE), INSS, Receita Federal, FGTS (Caixa) and ANPD
Last updated: October 2026
R$1,621 a month from 1 January 2026. Some states set higher regional floors, and most union agreements set category wage floors. The highest applicable floor applies.
A written contract in Portuguese is strongly recommended. Registration in eSocial (digital work card) is mandatory before the start date. Fixed-term contracts are limited to specific cases, up to 2 years.
Done through an experience contract of up to 90 days, which can be extended once within that limit. After 90 days it becomes an indefinite contract.
About 65–80% on top of base salary for statutory items, including the 13th salary, vacation bonus and FGTS. Often 80–100% with customary benefits such as meal vouchers and a health plan.
30 calendar days after each 12 months of work, paid with a one-third vacation bonus. Leave can be split into up to 3 periods with the employee's consent.
Up to 8 hours a day and 44 hours a week, with at least an 11-hour rest between shifts and a weekly paid rest day. Time control is required above 20 employees.
20% INSS with no ceiling, 1–3% work-accident insurance adjusted by a risk factor, about 5.8% third-party contributions, and 8% FGTS. Roughly 34–37% of payroll each month.
IRRF withheld monthly at 0% to 27.5%. From January 2026, monthly taxable income up to R$5,000 pays no tax, with a partial reduction up to R$7,350.
At least 50% above the normal rate, often more under union agreements, capped at 2 hours a day. Sunday or holiday work without a rest day off is paid at 100% extra.
Notice is 30 days plus 3 days per year of service, up to 90 days. Dismissal without cause adds a 40% penalty on the employee's FGTS balance.
All termination amounts are due within 10 calendar days of the contract ending. Late payment incurs a penalty of one month's salary.
A 13th salary of one month's pay is paid in two installments, by 30 November and 20 December. A vacation bonus of one third of monthly salary is paid with annual leave.
2025–2026 updates
Register every employee in eSocial before they start work, which creates their digital work card record. Use a written contract in Portuguese, even though bilingual versions are common. Contracts are indefinite by default; fixed-term contracts are allowed only in limited cases. Use a 90-day experience contract for probation. Check the applicable union agreement, which often sets a higher wage floor, annual salary increases and benefits. Remote work must be written into the contract.
Obtain a CNPJ, union classification and an eSocial employer profile. Pay salaries by the 5th business day of the following month; many agreements also require a mid-month advance. Report payroll and all labour events through eSocial, pay INSS and income tax through DCTFWeb, and deposit FGTS through FGTS Digital by the 20th. Apply the 2026 INSS bands and the new income tax reduction, including on the 13th salary.
Employees get 30 calendar days of annual leave plus a one-third bonus, paid 2 days before leave starts. The employer pays the first 15 days of sick leave, then INSS takes over. Maternity leave is 120 days at full pay, or 180 days under the Empresa Cidadã program. Paternity leave is 5 days today and rises from 2027. A transport voucher is mandatory for commuters, and there are 10 national holidays plus local ones.
Employers can dismiss without cause, but must give notice of 30 days plus 3 days per year of service, up to 90 days, or pay in lieu. Severance includes the salary balance, pro-rated 13th salary, vacation plus one third, and a 40% penalty on the FGTS balance. Pay everything within 10 days. Pregnant employees, work-accident victims, CIPA members and union leaders have job stability and cannot be dismissed without cause.
Run an NR-1 risk management program that now includes psychosocial risks, an NR-7 occupational health program with medical exams, and an accident-prevention committee or designated person under NR-5. Employers with 100 or more staff must meet disability hiring quotas and file semiannual equal-pay reports. Under the LGPD, give employees a privacy notice, keep processing records, appoint a data protection officer unless exempt, and report breaches to ANPD within 3 business days.
Download the full Brazil Payroll & Employment Guide 2026 (PDF)
For detailed hiring information, customised employment guidance or support with your Brazil hiring, please reach out to our team. We provide compliant employment contracts, payroll processing and tax remittance, social security registration and reporting, benefits administration, and onboarding and offboarding support. See our EOR pricing: flat from $349 per employee, per month.
FAQ
Yes. An Employer of Record such as StratEdge Global becomes the legal employer and handles contracts, eSocial registration, payroll, INSS and FGTS contributions, tax withholding and compliance, while you direct the day-to-day work. Hiring individuals as contractors for employee-like work is a major misclassification risk.
Plan for about 65–80% on top of base salary for statutory costs: 20% INSS, work-accident insurance, about 5.8% third-party contributions, 8% FGTS, the 13th salary and the vacation bonus. With customary benefits such as meal vouchers and a health plan, it often reaches 80–100%.
Dismissal without cause is allowed, but the employer pays notice of 30 days plus 3 per year of service (up to 90), pro-rated 13th salary and vacation plus one third, and a 40% penalty on the FGTS balance, all within 10 days. Some employees, such as pregnant workers, have job stability.
Since January 2026, employees with monthly taxable income up to R$5,000 pay no income tax, and those up to R$7,350 get a partial reduction. Payroll must apply the reduction each month and on the 13th salary. High earners may owe a minimum tax in their annual return.
