Country Payroll Guide Brazil

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Key Facts

Capital
Brasilia
Date format
dd/mm/yyyy
Currency
Brazilian Real (BRL)
VAT
the standard rate is 17%

Contributions

Employers

Social Security
Social Security - 20%
Severance indemnity (FGTS)
Severance indemnity (FGTS) - 8%
Total Employment Cost
Total Employment Cost - 36.5%

Employees

Social Security
Social Security - 7.5% to 14%
Total Employee Cost
Total Employee Cost - 14%

Minimum Wage

Minimum Wage
Minimum wage in Brazil is 1100 BRL per month.

Payroll

Payroll Cycle
Monthly
13th Salary

13th-month payment, equal to one month’s salary.

Income Tax

Employee Income Tax (1)
0 - 1,903.98 BRL - 0%
Employee Income Tax (2)
1,903.99 - 2,826.65 BRL - 7.5%
Employee Income Tax (3)
2,826.66 - 3,751.05 BRL - 15%
Employee Income Tax (4)
3,751.06 - 4,664.68 BRL - 22.5 %
Employee Income Tax (5)
4,664.69 BRL and over - 27.5 %

Working Hours

General Working Hours

8 hours per day and 44 hours per week.

Overtime

A maximum of two hours of overtime can be worked per day (Brazilian law prohibits more than ten hours of work per day in total) and is paid at 150% the rate of normal salary, or 200% on Sundays or public holidays.

Leave

Paid Time Off

For every year of employment after the first 12 months, each employee is entitled to 30 days of vacation.

Public Holidays

12 national holidays, including those whose dates vary, and about 50 state holidays.

Sick Days

The first 15 days of absence must be paid from the employer. Any further days off are paid through the National Institute of Social Security (INSS), at fixed rates.

Maternity Leave

6 months.

Paternity Leave

5 days.

Other Leave

Marriage leave – 3 days.

Termination

Termination Process

Pursuant to labour legislation, there are five types of termination: Termination without cause; Resignation by the employee; Indirect termination; Termination by mutual consent; Termination for cause.

Notice Period

Notice period of 30 days during the first year of the employment. After the first year, the notice period will be increased by three days per year, up to a limit of 90 days.

Severance Pay

Employees terminated without cause and terminations carried out by indirect termination or by mutual consent are entitled to severance pay, which corresponds to a percentage over the FGTS balance (40 per cent in the case of termination without cause and indirect termination and 20 per cent in the case of termination by mutual consent). An additional 10 per cent must be paid on behalf of the government as an additional tax. Zero-hour contracts terminated without cause also entitle the employee to receive 20 per cent of the FGTS balance.

Probation Period

Must not exceed 90 days.

Visa

Employment Visa

VITEM V temporary visa; Permanent work visa (“Visto Permanente”); VITEM II (Business Trip) Visa.