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Global Payroll Team
Written by Global Payroll Team
Last updated May 7, 2026
Expert Reviewed
Payroll in Brazil
Tax in Brazil
Immigration in Brazil

Brazil map

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Mercans offers complete payroll, PEO and HR services in Brazil

Brazil is the largest economy in Latin America and remains a major destination for regional and international investment. It offers a large workforce, abundant natural resources and a diversified economy across agribusiness, manufacturing, energy, mining, technology, logistics and financial services. Brazil’s domestic market and industrial base continue to make it an important jurisdiction for companies expanding in the region.

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Doing Business in Brazil

Foreign companies must complete the relevant registration and tax formalities with the competent authorities to establish a local presence in Brazil. Businesses generally need registration with the Commercial Registry and tax registration with the Federal Revenue Service for a CNPJ. Brazil also continues to support strategic investment through public financing and development initiatives, including programs administered by BNDES.

Entity Registration and Incorporation Requirements

Setting up a new business or expanding an existing one in Brazil is straightforward. Choose how your company operates from a range of entity types that suit your individual circumstance.

Banking

Banking Hours: 10:00 am to 4:00 pm from Monday to Friday

Working Week

The normal legal working time is 8 hours per day and 44 hours per week, usually from Monday to Saturday, subject to collective bargaining and specific work schedules.

Labor Law

The central piece of legislation governing employment is the Consolidation of Labor Laws (CLT). Employment relationships are also influenced by the Federal Constitution, collective bargaining agreements and social security rules, while employers must comply with mandatory registration, payroll and workplace obligations.

Main Industries

Agribusiness, mining, oil and gas, automotive, aerospace, food processing, financial services, logistics and technology

GDP Growth

2.3%

Dates & Numbers

dd/mm/yyyy

Official State Name

Federative Republic of Brazil

Population

213.4 million

Capital

Brasília

Major Languages

Portuguese

Currency

Brazilian Real (BRL)

Internet Domain

.br

International Dialing Code

+55

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Brazil
Brasília, BR
10:08 pm, May 16, 2026
20°C
light rain
94 %
Wind Gust: 0 mph
Clouds: 0%
Sunrise: 6:27 am
Sunset: 5:49 pm

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Payroll

The federal minimum wage is set by the government and is usually adjusted annually. Sectoral collective bargaining agreements may also set salary floors that apply to specific categories of workers and can be higher than the federal minimum wage.

It is acceptable to provide employees with online payslips, provided employees receive a proper statement of payment and payroll obligations are met.

Payslip

Payroll and employment records should generally be retained for at least 5 years.

Reports

Employees are entitled to paid annual leave of 30 days after each 12-month vacation period, subject to absence rules.

Annual Leave

Employees are generally entitled to paid sick leave by the employer for the first 15 days of absence, after which social security rules may apply.

Sick Leave

Employees are entitled to 120 days of paid maternity leave and 5 days of paid paternity leave as a statutory minimum, with possible extensions in qualifying cases.

Maternity & Paternity Leave

Employees must generally be provided with at least 30 days notice of termination, which may increase by 3 days per year of service up to a maximum of 90 days.

Employee Termination

The 13th month salary is a mandatory annual payment made to employees.

13th month salary

1621 BRL per month

Minimum Wage

Overtime must generally be paid at no less than 1.5x the employee’s ordinary rate of pay and is usually limited to 2 overtime hours per day.

Overtime

Employers generally deposit 8% of remuneration into the employee’s FGTS account, and dismissal without cause usually triggers an additional FGTS penalty.

Severance Pay

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Tax and Social Security

Taxation in Brazil occurs at federal, state and municipal levels. Companies generally require a CNPJ registration with the Federal Revenue Service. Social security is administered mainly through the INSS, while employers must also comply with payroll withholding, employer social security contributions and FGTS obligations.

Tax

Brazil’s tax system is complex and includes corporate income tax, social contribution on profits, payroll charges, indirect taxes and municipal levies. The combined standard corporate taxation on profits is commonly 34%, while personal income tax remains progressive with a top rate of 27.5%. Brazil does not currently operate a single nationwide VAT, and indirect tax rates vary depending on the tax and the jurisdiction.

34%

Corporate Income Tax

27.5%

Personal Income Tax

Varies

Sales Tax

No

VAT

Social Security

Social security contributions help fund retirement, pensions, temporary incapacity and other statutory benefits. Employee INSS contributions are progressive, while employers generally pay a 20% social security contribution on payroll in addition to accident insurance and other parafiscal charges, depending on the company and activity.

Varies

Social Security Rate

20%+

Social Security Rate for Employers

7.5%-14%

Social Security Rate for Employees

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Employment Law

Brazilian employment law grants registered employees a broad set of statutory rights, including minimum wage protection, limits on working time, overtime pay, annual leave, 13th-month salary, social security coverage and FGTS protection.

Employment Agreement

Although Brazilian law does not always require a detailed written employment contract for an ordinary employment relationship, written terms are commonly used in practice to document key conditions. Employers must also ensure the worker is properly registered in the relevant labor and payroll systems.

Working condition

Regular working hours are generally limited to 8 hours per day and 44 hours per week. Overtime is normally limited to 2 hours per day, except where different legal or collectively bargained arrangements apply.

Leaves

Brazil has 11 national public holidays. States and municipalities may also establish their own local holidays, and some religious observances may be treated differently depending on the location.

Employment termination

Termination of employment may occur with or without cause, subject to statutory formalities and payment of all termination entitlements. Notice, accrued salary, unused vacation amounts, 13th-month salary components and FGTS-related consequences should be assessed based on the nature of termination.

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30 days

Minimum notice period for terminating an employee

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11 days

Total number of public holidays

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44

Working hours per week

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2 days

Total number of days for Compassionate & Bereavement Leave

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Immigration

Foreign nationals who intend to work in Brazil generally need the appropriate visa or authorization of residence for labor purposes. Depending on the case, the process may involve a prior labor authorization through MigranteWeb and consular issuance of a VITEM V visa or residence authorization from within Brazil.

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Residency permits

Brazil grants residence authorization for several categories, including work, family reunion, study, research and investment. For labor-based residence, the applicable immigration rules and supporting corporate and personal documents must be submitted to the competent authority.

Work Permit Validity

Up to 2 years

Required Documents

work authorization or residence application through the appropriate immigration route

valid passport and identification documents of the foreign national

corporate registration documents of the sponsoring company

documents required by the relevant labor immigration resolution

proof of payment of the applicable government fee, where required

supporting employment or assignment documents, depending on the case

Compliant, reliable, error-free and touchless payroll in Brazil

Build the best team and hire top talent compliantly in Brazil. Get in touch with Brazil payroll outsourcing & PEO specialists for a free consultation!

This document was prepared for informational purposes only. As local laws & regulations keeps on changing. Please consult your tax & legal advisors as well.
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    FAQs

    What is an Employer of Record (EOR) in Brazil and how does it work for foreign companies?

    An Employer of Record (EOR) in Brazil legally employs staff on behalf of foreign companies. It manages employment contracts, payroll, taxes, social security, and compliance with local labor laws, allowing companies to hire employees quickly without establishing a local legal entity.

    Why should businesses use an EOR instead of setting up a legal entity in Brazil?

    Using an EOR avoids the time and costs of setting up a local company. It provides fast market entry, reduces administrative work, ensures legal and tax compliance, and is ideal for businesses testing the Brazilian market or hiring a small team.

    How does payroll outsourcing in Brazil ensure compliance with complex labor and tax laws?

    Payroll outsourcing ensures accurate salary processing, tax filings, and social security contributions according to Brazilian law. It reduces compliance risks, avoids penalties, and provides expertise on local labor and tax regulations.

    Can an Employer of Record in Brazil hire employees and manage work visas for international companies?

    Yes, an EOR can legally hire employees for foreign companies and manage work visas. It handles HR operations, payroll, and compliance with local labor and immigration laws, enabling smooth operations without a local entity.

    What are the key benefits of using EOR and payroll services in Brazil for global expansion?

    EOR and payroll services enable faster hiring, local compliance, reduced legal and financial risk, and access to market expertise. They allow companies to expand into Brazil efficiently while focusing on business growth.

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