Employer of Record in Brazil: 2026 Cost and Compliance Guide

Brazil is Latin America's largest economy and a deep talent market for engineering, product and customer operations, centred on São Paulo, Rio de Janeiro, Belo Horizonte, Curitiba, Porto Alegre and Florianópolis. It also has one of the highest employer burdens in the world: under the CLT (Consolidação das Leis do Trabalho), payroll charges, the mandatory 13th salary and the vacation bonus typically add 50% or more to base salary.

Setting up a Brazilian company is slow and administratively heavy, so an Employer of Record (EOR) is a popular way to make first hires. The EOR employs your team under CLT, registers them in eSocial, pays INSS and FGTS, and handles Brazil's complex payroll rules.

Many Brazilian professionals also work as contractors through their own company (PJ). This is legal but carries significant reclassification risk if the person works like an employee. This guide covers costs, key CLT rules, provider comparison and when to set up a Brazilian Ltda. Figures link to official sources. We do not test or use the providers listed; see our methodology.

An Employer of Record in Brazil employs staff on behalf of foreign companies. It signs a CLT employment contract, registers the employee in eSocial and their digital work card, withholds income tax (IRRF) and employee INSS, pays employer INSS, workplace-risk (RAT) and third-party contributions, deposits FGTS (the severance fund) monthly, and pays the 13th salary and vacation bonus.

Brazil's 2017 outsourcing law permits outsourcing of any activity, including a company's core activity, through a properly constituted service provider. But if the client directly supervises and controls the worker, courts can recognise an employment relationship with the client, and the client remains secondarily liable for the provider's labour debts.

Ask your provider how its Brazilian structure works and how it manages labour-court risk, which is high in Brazil compared with most countries.

Brazilian employment cost has four layers: 12 months of salary, the 13th salary and vacation bonus, payroll charges (INSS, RAT, third-party contributions and FGTS, which also apply to the 13th salary and vacation pay) and the EOR fee.

Employer INSS has no salary cap, so the percentage stays high even at senior salaries. Benefits such as meal vouchers and health plans are customary and add further cost.

Annual cost at example salaries

What these figures include and exclude

• Payroll charges apply to salary, the 13th salary and vacation pay, so the model applies them to 1.111× the 12-month salary.
• Employee INSS (progressive, capped) and income tax (IRRF) are withheld from pay and are not employer costs.
• Transport vouchers are mandatory where the employee commutes (the employer pays the cost above 6% of salary).
• On dismissal without cause, the employer pays a penalty of 40% of the FGTS balance, plus notice and accrued amounts. This is not included above.

Estimate your own cost

Enter a salary to see the estimated annual cost, including mandatory employer contributions and an EOR fee. Change the fee to match the quotes you receive.

Brazilian employment is governed by the CLT and collective agreements negotiated by sector unions, which commonly set salary floors, annual raises and benefits.

Employment contracts

CLT contracts are registered in eSocial and the digital work card. Open-ended contracts are the norm.[1]Verify

Probation (contrato de experiência)

Up to 90 days in total, which can be split into two periods.[1]Verify

Working time

Up to 8 hours a day and 44 hours a week, with overtime paid at a minimum 50% premium. Time records are required for employers with more than 20 employees.[1]Verify

Annual leave

30 calendar days after each 12 months of work, paid with a one-third bonus. Can be split into up to three periods.[1]Verify

13th salary

One extra month's salary each year, paid in two instalments by 30 November and 20 December.[1]Verify

Maternity leave

120 days, paid via social security (180 days for companies in the Empresa Cidadã programme).Verify

Notice period

30 days plus 3 days per year of service, up to 90 days.[1]Verify

Termination

Dismissal without cause is permitted but costs notice, accrued 13th salary and vacation, and a 40% penalty on the FGTS balance.[3]Verify

These EOR providers publish information about employing in Brazil. Prices are their own published starting rates in USD; Brazil is often quoted higher.

In Brazil, ask whether the provider uses its own Brazilian entity, which collective agreement and union apply, how benefits like meal vouchers and health plans are priced, and how labour claims are handled.

For each provider's products, pricing model and fit signals, see the EOR provider directory.

Foreign companies usually set up a Sociedade Limitada (Ltda). It requires at least two quota holders (or a single-member structure), a Brazil-resident administrator, registration with the Board of Trade and the federal tax authority (CNPJ), state and municipal registrations, and central bank registration of foreign capital. Setup commonly takes two to four months.

Running costs are high: a local accounting firm (contabilidade) handling Brazil's complex monthly tax filings and eSocial, legal representation, a resident administrator, and corporate taxes (IRPJ and CSLL, about 34% combined under the actual-profit regime).

For a step-by-step version of this calculation, see EOR vs local entity: a break-even framework.

1. 1

   Define the role and salaryDay 0

   Agree a monthly gross salary and benefits (meal vouchers, health plan) in line with market norms and the applicable collective agreement.

2. 2

   Compare itemised quotes2–5 days

   Request Brazil quotes covering the fee, deposit, benefits, union obligations and offboarding costs. Use the estimator to sanity-check totals.

3. 3

   Sign the service agreement

   Review liability for labour claims and termination costs, IP assignment and data protection (LGPD) terms.

4. 4

   Contract and onboarding1–2 weeks

   The EOR issues a CLT contract, registers it in eSocial, and arranges the pre-employment medical exam (ASO). The employee provides their CPF, PIS and bank details.

5. 5

   Ongoing administrationMonthly

   Monthly payroll, eSocial events, FGTS deposits, INSS payments, vacation scheduling, and the 13th salary in November and December.

Rates and rules on this page are based on the following official sources. Numbers in brackets in the tables above link to these entries.

1. 1
   Consolidação das Leis do Trabalho (CLT)

   Presidência da República (planalto.gov.br)

   Working time, vacation, probation, notice and employment rules.

2. 2
   Social security contributions (contribuições previdenciárias)

   Receita Federal

   Employer INSS, RAT and third-party contribution rules.

3. 3
   FGTS for employers

   Caixa Econômica Federal / FGTS

   Monthly deposits and the dismissal penalty.

4. 4
   Minimum wage 2026

   Gov.br

   The national minimum monthly wage.

5. 5
   eSocial

   Gov.br

   The digital system for employment, payroll and tax reporting.

Brazil is a high-cost employment market: plan for roughly 1.6–1.9× base salary in total through an EOR, before meal vouchers and health plans, with no salary cap on employer INSS.

Because a Brazilian company is slow and expensive to set up and run, an EOR is often the right choice well beyond the first hire. Prioritise providers with their own Brazilian entity and a clear approach to labour claims.

See Mexico for a nearshore alternative, and our EOR vs local entity guide for the long-term decision.