Description: It is recommended to sign an open – ended employment contract (Contrato por prazo indeterminado) first. According to Articles 443 and 445 of the Brazilian Labor Code (CLT), employment contracts can be divided into three main types: open – ended employment contracts (Indefinite – term contract), fixed – term employment contracts (Fixed – term contract), and part – time employment contracts (Part – time contract). Fixed – term employment contracts can only be signed under the following specific circumstances: (a) A probationary contract (Contrato de experiência) of no more than 90 days; (b) The nature or temporary nature of the service justifies its expected duration; (c) The business activity is temporary (such as seasonal operations or specific projects), with a maximum duration of two years. The maximum duration of a fixed – term contract is two years and can be renewed once. If the limit is exceeded or a new contract is signed again, it will be regarded as an open – ended contract. If the same employee is re – employed by the same employer on a fixed – term basis within six months after the expiration of the fixed – term contract, the new contract will be regarded as an open – ended employment contract. If a fixed – term contract expires naturally, the employer does not need to pay compensation. However, if either party terminates the contract without just cause before the contract expires, it must pay the other party 50% of the remaining contract period’s salary as liquidated damages (Article 479 of the CLT). For open – ended contracts, if the employer terminates the employment relationship without just cause, it must give 30 days’ notice in advance or pay a salary in lieu of notice equivalent to one month’s salary, with an additional three days for each year of service. At the same time, the employer must pay severance compensation including the following items: all unpaid salaries and vacation pay; the pro – rated 13th – month salary; 40% of the balance of the Severance Indemnity Fund (FGTS). A probationary contract is a type of fixed – term contract. If it is terminated early during the probationary period, the same 49% compensation rule applies.
Remarks: The contract must be written in Portuguese or English, and bilingual use is also acceptable. The contract must be in written form and signed by both parties. The contract must include basic information, job content, work location, contract type and duration, salary terms, working hours, leave and holidays, social security, termination clauses, and the signature section.
Part – time Employees and Interns: IC Contracts
Description: It is recommended to use independent contractor IC agreements for part – time employees and interns.
Remarks: The maximum working hours for interns are 30 hours per week.
II. Overview of the Statutory Welfare System
Salary Payment
Description: The salary payment frequency is bi – weekly or monthly. Salaries should be paid monthly in Brazilian currency (Reais), and the current month’s salary must be paid no later than the fifth working day of the next month. Paydays are the 15th and 30th of each month. In Brazil, regarding the salary payment time for the month of separation, according to the Brazilian Consolidation of Labor Laws, salaries can be paid in cash or by bank transfer. The current month’s salary must be paid before the fifth working day of the next month. The salary for the month of separation and severance pay must be paid within 10 days after separation; otherwise, an additional month’s salary will be paid as a fine. If the employer delays salary payment, in addition to possible fines and compensation requirements from the Ministry of Labor, it may also face lawsuits from employees and even compensate for the mental damage suffered by employees due to long – term delayed payment.
Monthly Minimum Wage
Description: According to the latest salary standard in 2025, the statutory minimum wage in Brazil is 1,518 Reais (BRL) per month.
Probationary Period
Description: According to the Brazilian Labor Code (CLT), a probationary contract (Contrato de Experiência) is a type of fixed – term employment contract used to evaluate an employee’s ability to perform their job responsibilities. The maximum duration of the probationary period is 90 days. Under the following circumstances, a probationary contract will be regarded as an open – ended contract: a. The employee continues to provide services after the expiration of the probationary period; b. The contract is renewed or extended beyond the legally stipulated 90 days; c. The same employee signs a probationary contract again for the same position, and the interval between the two contracts is less than six months; d. The contract stipulates that either party can terminate it in advance, and this right is exercised by either party (Article 481 of the CLT). In addition, according to Article 168 of the CLT and relevant regulations, the employer must arrange for employees to undergo occupational health examinations before recruitment, before termination, and within the specified cycle, and the relevant expenses shall be borne by the employer. Employees should complete the pre – employment health examination before the start of the probationary period.
Employer Costs
Description: Employer costs are generally estimated as a percentage of the employee’s salary: Fundo de Garantia do Tempo e Serviço (FGTS) – 8%; Social security – 26.8% to 28.8%; Meal allowance – 40 Brazilian Reais per working day, approximately 880 Brazilian Reais per month. Please note that there are significant regional differences. Generally, the allowance does not exceed 20% of the total salary (meal allowances vary greatly by industry and region); Compulsory life insurance – 5.56 Brazilian Reais (not compulsory); These costs are calculated based on the employee’s monthly salary (including bonuses and allowances). Annual costs: 13th – month salary: One month’s salary, calculated as the average monthly salary of the past 12 months, including other salary payments such as bonuses and allowances, and then divided by 12. Union tax: One day’s salary per year. In 2025, the amount is 423.60 Brazilian Reais. (Union requirements vary and are not compulsory); Profit – sharing: Not compulsory. Vacation bonus: One – third of the employee’s monthly salary or one – third of the vacation days. Conditional costs: Monetary benefits: Employees can choose to receive a maximum of 10 days’ vacation bonus instead of using it as paid leave. Childcare allowance: Female employees with children aged 0 – 71 months (5 years + 11 months) are entitled to a maximum monthly childcare allowance of 290.98 Brazilian Reais per child. This applies to enterprises with 30 or more employees. (Mainly depends on the enterprise – union agreement). Compulsory employer costs: Compulsory health examination: In addition to the normal salary, calculated at an annual salary of 240 Brazilian Reais; National Social Security Institute (INSS): Calculated at 20.00% of the pre – tax income; Pension – Service Time Guarantee Fund (FGTS): Calculated at 8.00% of the pre – tax income. Workers’ compensation insurance (RAT/FAP): Calculated at 1 – 3.00% of the pre – tax income; Educational contribution (INCRA, SENAI, SESI, and SEBRAE are not necessarily these four, related to the industry): Calculated at 5.80% of the pre – tax income. Compulsory benefits: (Depending on the union, the following are not necessarily compulsory) Standard meal vouchers in 2024: Provide 30 Brazilian Reais worth of meals per day, 660 Brazilian Reais for 22 working days per month (approximately 133 US dollars). The funds are directly transferred to the employee’s flash card (depending on the union, meal allowances are not necessarily compulsory); Life insurance in 2024: This policy provides financial protection of 40,000 Reais for death and total permanent disability caused by an accident. The policy also includes 5000 Brazilian Reais for family funeral assistance, which helps cover funeral expenses during difficult times. The insurance amount is estimated and may be adjusted based on policy reviews and changes in the number of Brazilian employees. (Depending on the union, accident insurance is not necessarily compulsory); Joint dental assistance in 2024: A compulsory benefit for all Brazilian employees, authorized by the CBA. If employees accept it in writing, they can choose to pay 11.25 Reais from their monthly salary. Grocery vouchers in 2024: If an employee’s total monthly income is up to 6,499.44 Reais, according to the Collective Bargaining Agreement, the employee is eligible for an additional 148.94 Brazilian Reais in grocery vouchers per month. If the employee meets the criteria, this benefit will be transferred to the employee’s flash card.
III. Salary Payment and Statutory Holiday Responsibilities
Personal Income Tax
Description: The personal income tax rate ranges from 0% to 27.5%. Income tax is calculated on a progressive basis. These tax rates are updated by the government annually. Various other factors such as marital status and income level may affect the overall tax rate. The calculation period for personal income tax is once a year, with the tax – assessment period from January 1st to December 31st. Deductions include social insurance premiums, medical insurance premiums, education expenses, childcare expenses, etc. Tax rate details: 0%: Up to BRL 2259.20; 7.5%: BRL 2259.21 to BRL 2,826.65; 15%: BRL 2,826.66 to BRL 3,751.05; 22.5%: BRL 3,751.06 to BRL 4,664.68; 27.5%: Above BRL 4,664.00.
Overtime Pay and Maximum Working Hours
Description: According to Brazilian labor law, overtime refers to work beyond normal working hours, including extended working hours and work on rest days and holidays. The normal working hours are a maximum of 44 hours per week and 8 hours per day. Work beyond this time is considered overtime. The working hours beyond 8 hours per day for employees are overtime hours. The law stipulates that daily overtime shall not exceed 2 hours and shall be paid at 150% of the normal salary, and 200% on Sundays or public holidays. After 11 consecutive days of overtime, 24 hours of rest must be guaranteed.
Remarks: Overtime pay forms: Overtime pay + compensatory leave. Overtime on weekdays: Overtime pay is calculated at least 50% of the normal salary. Overtime on weekends: Overtime pay is calculated at 100% of the normal salary. Overtime on holidays: Overtime pay is calculated at 100% of the normal salary, and an additional salary is paid as a bonus. Overtime compensation: In addition to paying overtime pay, the employer also needs to give employees corresponding rest time. Employees are entitled to corresponding rest time after extended working hours, usually 1.5 times the extended working hours. For employees who work on rest days and holidays, they are entitled to double the rest time. In Brazil, certain types of positions or jobs may be exempt from overtime regulations. Credit positions: Employees in some management positions may be exempt from overtime regulations because their work nature usually involves greater work autonomy and flexibility. Remote workers: Remote workers may not be subject to regular working hours and overtime regulations. It should be noted that these positions exempt from overtime regulations usually require a certain degree of work autonomy, and these regulations may vary according to the specific nature of the work and the specific provisions of labor law. For other positions, Brazilian labor law stipulates strict overtime work and compensation policies.
Statutory Holidays
Description: Full – time and part – time employees are entitled to 30 calendar days of paid time off (PTO) per year. PTO accumulates at 2.5 days per month. Employees are eligible for annual leave after one year of service. In the first year of work, employees are not allowed to take leave. Annual leave can be used in three installments, but at least one period must be a continuous 14 – day leave. Unused annual leave must be converted into salary plus a 1/3 subsidy.
Remarks: Please note: Our platform uses working days as the unit, while Brazilian PTO uses calendar days. (20 working days – 30 calendar days).
Statutory Public Holidays
Description: | January 1st | New Year’s Day (Ano Novo) | Fixed date | 1 | | February – March* | Carnival (Carnaval) | Non – fixed date | 2 | | March – April* | Easter (Páscoa) | Non – fixed date | 2 | | April 21st | Tiradentes Day (Tiradentes) | Fixed date | 1 | | May 1st | Labor Day (Dia do Trabalho) | Fixed date | 1 | | May – June* | Corpus Christi | Non – fixed date | 1 | | September 7th | Independence Day (Independência) | Fixed date | 1 | | October 12th | Our Lady of Aparecida Day (N.S.Aparecida) | Fixed date | 1 | | November 2nd | All Souls’ Day (Finados) | Fixed date | 1 | | November 15th | Republic Day (Proclamação da República) | Fixed date | 1 | | December 25th | Christmas Day (Natal) | Fixed date | 1 | For non – fixed – date holidays, if the holiday falls between Tuesday and Thursday, enterprises can issue a “bridging holiday” (feriado emendado) to extend the holiday.
Remarks: Brazil has 8 local holidays. Some local holidays include: São Paulo Anniversary, National Revolt Day, Black Consciousness Day, and Public Holidays in Rio de Janeiro (5 days).
Other Holidays
Maternity Leave
Description: Pregnant employees are entitled to 120 days of paid leave (if the enterprise participates in the Corporate Citizenship Program, the maternity leave is 180 days). During this period, employees will receive 100% of their average salary, and the employer will be responsible for paying this salary. However, the government will refund this amount in the form of tax relief in the same month. In the case of non – criminal abortion, with an official medical certificate, the woman will have a 2 – week paid rest period and is guaranteed the right to resume her previous job. Employees can extend their leave with a doctor’s certificate. During this period, employees will receive 100% of their salary paid by the employer.
Paternity Leave
Description: Employees are entitled to 5 calendar days of paid paternity leave. If the company joins the “Corporate Citizenship Program”, the total duration can be extended to 20 days (5 days + 15 days = 20 days in total). During this period, employees will receive 100% of their average salary, and the employer will be responsible for paying this salary. Employees cannot extend the leave.
Sick Leave
Description: There is no maximum limit for sick leave for employees. The enterprise pays the employee’s salary within 15 days, and the INSS pays after 15 days. For the first 15 days, a certificate from a registered doctor (CRM) is required. After 15 days, it must be reviewed and confirmed by a medical expert (Perícia Médica) designated by the INSS.
Expatriate Employees
Description: Split Payroll. The local minimum wage required for a work visa. The minimum salary is generally preferably not less than 6000 Reais per month.
Dismissal (Legal Requirements and Best Practices) – Notice Period
Description: If the service period is less than 1 year, 30 days’ notice in advance is required; for each additional year of service, an additional 3 days’ notice is required, with a maximum of 90 days in total. The employer must notify the employee 30 days in advance and pay the employee the salary for the remaining notice days, or pay the employee the entire statutory notice period’s salary. Employees in the notice period will have their daily working hours reduced by 2 hours, or they are entitled to 7 days of paid leave at the end of the notice period.
Remarks: According to the Brazilian Consolidation of Labor Laws, the employer should notify the employee in writing at least 30 days in advance to terminate the employment relationship. The employer can also choose to pay a salary in lieu of notice equivalent to one month’s salary and immediately terminate the employment relationship.
Voluntary Resignation
Description: Submitting a formal resignation letter is sufficient. According to Brazilian labor law, when an employee resigns, they need to notify the employer in advance; otherwise, a one – month salary fine will be paid.
Dismissal During Probationary Period
Description: At the end of the probationary period, either party can terminate the employment contract without complying with the usual notice period or severance pay requirements.
Negotiated Dismissal
Description: In this case, the employer must pay the employee a severance package, which includes all unpaid salaries and vacation allowances, the pro – rated annual leave salary, the 13th – month salary, the annual bonus, and 20% of the total amount deposited in the Severance Indemnity Fund (FGTS) during the employee’s tenure.
Dismissal for Just Cause
Description: In Brazil, regarding the salary payment time for the month of separation, according to the Brazilian Consolidation of Labor Laws, salaries can be paid in cash or by bank transfer. If the employer delays salary payment, in addition to possible fines and compensation requirements from the Ministry of Labor, it may also face lawsuits from employees and even compensate for the mental damage suffered by employees due to long – term delayed payment.
V. Analysis of Favorable Measures and Policies of the Government for Local Company Establishment and Local Employee Hiring
Incentive Policies – Local Employment Protection Policies
Description: Brazilian law gives priority to protecting the employment opportunities of domestic workers. The main policies include: Mandatory employment quota: For the employment of disabled people, enterprises with 100 or more employees must hire 2% – 5% of disabled people; otherwise, they need to pay a fine. Youth apprentices: Medium – and large – sized enterprises (in some industries) must hire 5% – 15% of young people aged 14 – 24 as apprentices, and their salaries can be lower than the minimum wage (usually 50% – 80%).
Quota Ratio for Foreign Employees’ Work Permits
Description: No more than 30%.
VI. Human Resources Analysis and Employment Suggestions
Number of Employed People
Description: In January 2025, the number of employed people in Brazil decreased from 103.8 million in December 2024 to 103 million, and the labor force participation rate dropped to 62.3%, compared with 62.6% in the previous month. The average number of employed people in Brazil from 2012 to 2024 was 92.59 million. The historical maximum was reached in November 2024 at 103.90 million, and the historical minimum was reached in August 2020 at 81.67 million.
Description: The unemployment rate in Brazil rose to 6.5% in January 2025.
VII. Cultural Adaptation
Language
Description: The official language in Brazil is Portuguese, and English is also relatively common.
Religious Customs
Description: Brazil is the world’s largest Catholic country and also has a rich and diverse religious culture, mainly influenced by African, European, and indigenous traditions.
Business Culture
Description: Punctuality flexibility: Brazilian time (“Horário brasileiro”) is relatively flexible, and being 15 – 30 minutes late is quite common, but international enterprises or executives are more likely to be punctual. Greeting methods: For the first meeting: Shake hands and maintain eye contact (men may hug or pat each other on the back). Between women or between men and women: Kiss on the cheek (1 – 2 times, a virtual kiss in the air), especially in the southeast. Dress code: In São Paulo/Rio: Business formal attire (suits and ties), especially in the finance and legal industries. Communication style: Warm and indirect: Brazilians are used to avoiding saying “no” directly and often use “Vamos ver” (Let’s see) or “É complicado” (It’s complicated) to decline politely. Rich body language: Many gestures, close conversation distance, and interrupting the conversation is not necessarily offensive.
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