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Employer of Record (EOR) in Brazil

Employer of Record in Brazil

Skuad’s Brazil EOR (Employer of Record) solution makes it easy for you to expand business in Brazil. The best part is, you can scale up your business without setting up a subsidiary unit in the nation. Our automated and unified global HR platform assists you to create, pay, and seamlessly manage a globally distributed team. That’s not all. Our in-country experts will also manage taxation and compliances for you. Connect with Skuad to know more about it.

Brazil at a Glance

Population: 212.78 Million

Currency: Real (R$) (BRL)

Capital city: Brazilia

Languages spoken: Portuguese

GDP: R$7.348 trillion

Employment in Brazil: What You Must Know Before Hiring in Brazil?

Before you initiate hiring in Brazil, it is essential to understand its basic employment structure. The Brazil Employment Law regulates employee agreements, entitlements, and labor unions in the country. Moreover, Brazil's labor laws also play a vital role in safeguarding the rights and interests of the Brazilian workforce.

The Consolidação Das Leis Do Trabalho (CLT) in alignment with the Federal Constitution of 1988, administers all the employment laws in Brazil. Every employee and employer operating in Brazil is compulsorily represented by the Labor Unions.

Please note that employment contracts in Brazil are often for an indefinite term. Moreover, fixed-term employment contracts are allowed only in specific cases. Another type of employment agreement in Brazil is, employment-at-will. Any party to the contract is free to terminate the agreement without cause. However, it is liable to give a prior notice and severance pay, if applicable.

The employee entitlements in Brazil are quite generous, making it one of the favorite destinations for job seekers. Mandatory employee health benefits in Brazil include medical and dental care, lump-sum death benefits, pensions, and retirement plans, and maternity and paternity leaves. On the other hand, supplementary benefits include disability benefits and life insurance.

Brazilian Social Security System, Unified Health System, The National Regulatory Agency for Private Health Insurance and Plans (ANS), and The National Institute for Social Security (INSS) take care of all the employee benefits in Brazil.

Rather than investing time in understanding the confusing and complex labor laws, compensation, and benefits mandates in Brazil, it is advisable to collaborate with a local payroll provider. Skuad will not only mitigate this challenge but will also give you time to focus on your business goals. Click here to know more about employment in Brazil.

Entitlements Explanation

Working Hours

A full-time working week is 44 hours. The per-day upper working time limit is 8 hours in Brazil. Moreover, every employee gets a mandatory 1-hour rest who works over 6 hours a day.

Overtime

Overtime in Brazil is limited to up to 2 hours a day. Any number of hours worked over 8 is called overtime here. Employees who do overtime get 150% of their regular salary. Employees who work on a holiday have a right to get 200% of their regular salary. However, an employee doing overtime from home does not get any benefit under this entitlement.

Paid Vacation

Between work days, a rest period of at least ten and a half hours is to be provided to Indian workers before returning to work.Every employee is entitled to get a paid leave of 30 days after every 12 months of employment. The payment is 1-month pay + 1/3rd part of the pay (to bear the expenses of the vacation).

Employees can also cash their 1/3rd annual leaves and claim a holiday bonus in lieu.

Public Holidays

  • New Year’s Day (1st Jan)

  • Universal Brotherhood Day (1st Jan)

  • Shrove Tuesday (16th Feb)

  • Good Friday (2nd April)

  • Easter Sunday (4th April)

  • Tiradentes Day (21st April)

  • Labor Day (1st May)

  • Corpus Christi (3rd Jun)

  • Independence Day of Brazil (7th Sep)

  • Our Lady of Aparecida’s Day (12th Oct)

  • All Souls Day (2nd Nov)

  • Republic Day (15th Nov)

  • Christmas Day (25th Dec)

Sick Leaves

Every employee on sick leave gets 100% pay, from the employer, on the first 15 days of the sickness. However, from the 16th day, employees start getting payment from the Social Security Department. This limit is up to 6,101 BRL.

Maternity Leaves

Female employees in Brazil get a total of 120 days of paid maternity leave. That’s not all, they can also extend the leaves by 4 weeks. However, the permission is only given on strong medical grounds. Employees get 100% of their pay during this time. But companies can deduct some amount for social security contributions. That’s not all, employees can also extend their maternity leave by 180 days if their employer is registered under Empresea Cidada.

Paternity Leave

Fathers get a 5-day paternity leave in Brazil. They are entitled to get 100% payment from the employer. Fathers can also extend their paternity leave by 20 days if their employer is registered under Empresea Cidada.

Over Leave

  • Marriage Leave - Employees in Brazil get a 3-day leave for their marriage.
  • Bereavement Leave – Employees get a 2-day leave on unfortunate occurrences like the death of a spouse, parent, or child.

Lump-Sum Death Benefits

The employer pays lump-sum death benefits to the dependents of the deceased employee from the date of death. Please note that this benefit is payable to both retired and non-retired employees. Spouses, unmarried siblings, dependent minors, and children below 21 years of age are all eligible to get this benefit.

Amount – The eligible dependent will get up to 100% of the entire retirement benefits that the employee was getting after retirement or would get on retirement. The amount is equally distributed among all the survivors.

Medical and Dental Care

Every employee working in Brazil is entitled to get medical and dental care benefits. It is a contributory benefit that is managed by the INSS healthcare facilities. On the other hand, ANS regulates dental and health insurance in Brazil.

ANS also determines the minimum and standard coverage that applies to every health insurance provider in Brazil. So, the final coverage amount of every insurance provider is almost the same. The slight difference might occur due to the network of doctors, clinics, and hospitals.

Retirement

Retirement benefits start immediately if the employer has promised them in the contract of employment. If not, he can start the process later on. Ideally, employees contribute upto 1%-5% and the employer has to match the employee contribution by 100%.

ANS also determines the minimum and standard coverage that applies to every health insurance provider in Brazil. So, the final coverage amount of every insurance provider is almost the same. The slight difference might occur due to the network of doctors, clinics, and hospitals.Moreover, the employee contribution is liable for a tax deduction of up to 12% of the pay. On the other hand, the employer contribution is tax-deductible up to 20% of the pay.

Pension

There are 3 types of pension plans:

  1. Survivors, Retirement, and Disability Pension – This program is managed by INSS. It is given to the employees who have suffered injuries or have become disabled due to work-related accidents or illness.

  2. Old Age Pension -The standard age limit to get old-age pension benefits in Brazil is 65 for males and 62 for females. The minimum eligible limit of monthly contribution to INSS for male employees is 240. Whereas, this limit is 180 for female employees.

  3. Special Pension -Special pension is given to the employees who have worked in exhaustive and unhealthy working conditions.

Contractors vs Full-Time Employees: Which Is The Right Option?

Are you planning to enter the Brazilian market? If yes, you need to first hire a remote team there. Many hiring companies in Brazil offer services to help you hire contractual or full-time employees but the main challenge lies in deciding on hiring contractors or full-time employees. Let us understand the pros and cons of hiring contractors and full-time employees.

Hiring Contractors

Companies should go for independent contractors if they have a short-term project in Brazil. It is one of the most cost-effective options to attain your business expansion goals. Moreover, you will be spared from the hassle of handling employee benefits, payroll, statutory payments, and taxes. But,whatever the case may be, you must comply with the Brazilian Labour Laws.

Hiring Full-Time Employees

If you are going to have a long-term diversification project in Brazil, you are advised to hire full-time employees. It might feel like a costly affair initially, but it will help in creating a solid workforce base for your company. You are going to have a reliable remote team that will ensure continuous contribution to the business.

Collaborate with Skuad to get the best opinion on this matter. Our in-country experts will not only help you in identifying the right option but will also set up a talented remote team for you. They will set you free from all the stress of employee liabilities and responsibilities. Click here to know more about Skuad’s employers of record EOR solution.

Hiring in Brazil: What Are The Modes Of Hiring in Brazil?

Brazil is the world’s 9th largest economy. It is potentially one of the richest countries with a robust industrial sector. Apart from this, Brazil is the most influential country in Latin America with 50% of the population under 20 years of age. It means that companies that want to grow here, have an opportunity to tap into a bigger pool of exceptional talent.

Companies that plan to hire employees in Brazil, can advertise their opening on job boards/portals. Indeed, Buscojobs, Catho, Vagas, and Trabalhabrasil are the top 5 job boards in Brazil.

These portals do an excellent job of bridging the gap between the employer and fresh graduates. Companies can source, screen, and hire the best candidates from these portals. But there is also a drawback of relying too much on these portals. Companies, at times, encounter misleading profiles.

To allay such challenges, employers must consider partnering with Skuad. Our in-house experts hire and manage remote teams from over 150 countries. They will not only handle the hiring, onboarding of your employee but will also arrange Brazil work permits for foreigners. Talk to a Skuad expert today to know more about it.

Probation & Termination: What You Should Know About Probation & Termination In Brazil?

The standard probation period in Brazil is 45 days. However, it can be increased to 90 days with the mutual consent of both the employee and employer.

Termination

According to the employment contract law in Brazil, contract agreements can be dismissed by giving proper notice to the parties involved. However, some employees are excused from this rule of termination of employment in Brazil. They are:

  • Union representatives,
  • Pregnant employees,
  • Members of CIPA – Internal Committee for Accidents Prevention,
  • Employees with employment-related injuries, and
  • Employees who come under collective contracts.
Party Initiating Termination Notice Period

Employer

  • Up to 1 year of service – 30 days notice

  • Above 1 year of service – 30 days notice + 3 more days for every year worked. This limit can go to 60 additional days only.

Employee

  • The employees are liable to give a 30 days notice period.

  • However, if they are still on probation, they can request to get relieved earlier than 30 days.

Termination under mutual consent

The notice period is split in this case.

Companies that are planning to expand operations in Brazil should consider collaborating with a trustworthy EOR solution provider. Skuad can help in handling all your termination and probationary period in Brazil formalities. Click here for more details.

EOR Solution: Why You Should Go For An Employer Of Record In Brazil?

Skuad’s Brazil EOR Solution can assist you with all your basic hiring needs. It makes the process of business diversification in Brazil much less complicated and arduous. Our Global automated HR platform and powerful dashboard can tailor-fit HR solutions as per your requirements. That’s not all, our in-country professionals will also take care of all the HR tasks, employment contracts, and Brazil work visa requirements for you.

Apart from this, we will also manage your timesheets, probation, termination, work permits, and employee benefits in compliance with Brazilian laws. You will have ample time to refine your business growth strategies and boost your profits. Book a demo today to know everything about Skuad’s employer of record service.

What are the Different Types Of Visas in Brazil?

Work visas and residency visas are a must for the employees who wish to work, receive payment, and stay in Brazil. They need to file an application in the Brazilian Consulate or Embassy located in their home country. Please note that the visa application process might take up to 3 months and the visa fee can vary from country to country.

Although there are 10 different types of visas in Brazil, they are categorized into three major types:

  1. Tourist Visa (VITUR)
  2. Temporary Visa (VITEM) - This visa is valid for 2 years and can be extended for another 2 years.
  3. Diplomatic, Official, and Permanent Visa
Visa Category Details

Process To Apply For A Visa At Brazilian Consulate / Embassy

  • Find and contact the Brazil Embassy. Learn about the documentation process and requirements.

  • Above 1 year of service – 30 days notice + 3 more days for every year worked. This limit can go to 60 additional days only.Apply for the visa appointment after completing the Brazil Visa Application Form. This is an online process, wherein, you need to upload electronic copies of your documents.

  • Show up at the Consulate with all your original documents and confirmation number.

  • Pay the visa processing fee and wait for your application to process.

  • On confirmation, the Embassy staff will inform you about the outcome of your visa application. You can either collect your visa personally or get it through the mail.

What Are The Common Documents Required For All The Types of Visas in Brazil?

  • Original passport with 2 blank pages and a validity of at least 6 months.

  • Passport size photograph

  • The Brazil Visa Application Form Receipt

  • Proof of employment status

  • Return flight tickets

  • Proof of financial means to bear the expenses of stay in Brazil

  • Proof of accommodation like hotel reservation in Brazil

  • Visa fee payment proof

  • Any other documents requested by the Brazil Consulate

Visa Specific Documents

For Business Visa –

  • Letter of invitation from the employer in Brazil

  • A special letter from the employer stating the reason behind your visit to Brazil

For Work Visa –

  • Approval from the Ministry of Labor

  • Employment contract, registration documents of the employer, and so on

  • Certificate of conduct from the police department of your country

For Student Visa –

  • Certificate of conduct from the police department of your country

  • Letter of admission confirmation or enrolment from the college or university in Brazil

  • Bank statement to prove your financial viability to cover your expenses during the stay in Brazil

Please note that all the documents should be legalized or Apostilled by the Brazilian Embassy of your country.

Work Permit: What Should You Know About Work Permits In Brazil?

Both the employers and employees have to take part in the work permit process. As per the law of employment in Brazil, your company must have a registered subsidiary in Brazil to get a work permit.

But, Skuad’s EOR solutions can assist you to sponsor work permits in Brazil without any physical entity setup. Our in-house experts can streamline document collection and government approvals for different types of work visas. Connect with the expert today to know everything about getting a work permit in Brazil.

Payrolls & Taxes: What You Should Know About Payroll & Taxes In Brazil?

The payroll cycle in Brazil can be monthly or bi-weekly. It is paid on the 15th and 30th of every month. Apart from this, Brazil also mandates the concept of the 13th salary. It means that employees will get a 13th salary that is equal to 1 month's salary at the end of the year.

Companies that are looking for business opportunities in Brazil should go for payroll outsourcing in Brazil. It will set them free from all the payroll and tax complications and formalities. Why don’t you connect with our experts here for more details?

Employer Payroll Tax

Group A - Payroll Burden and Obligations – Obliged for all cases

Category Tax Rate

INSS

23%

Third-Party Companies

5.8%

FGTS

8%

Group B - Payroll Burden and Obligations – Obliged for all cases, except Employee Self Registration

Category Tax Rate

1/12 Vacation

8.33%

1/3 Holidays

2.78%

13th Salary

8.33%

Taxes Over Burden

7.50%

Group C

Category Tax Rate

Early Dismissal

8.33%

FGTS

5.11%

Taxes Over Burden

5.21%

Employee Payroll Taxes

Category Tax Rate

Social Security

7.50% to 14%

Employee Income Taxes

Category Tax Rate

Up to 1,903.98

0%

1,903.98 – 2,826.65

7.50%

2,826.65 – 3,751.05

15%

3,751.05 – 4,664.68

22.50%

4,664.68 and above

27.50 %

Incorporation: How to Set Up A Subsidiary In Brazil?

The process of setting up a subsidiary office in Brazil is quite like the rest of the countries. Yet, you need to have an in-depth understanding of the Brazilian rules and regulations.

Incorporating a holding company in Brazil is a 5-step process that can take around 60 to 90 days to complete. Please note that it excludes the time involved in opening a bank account.

  • Step 1 – Determine the type of entity you want to go ahead with. Make sure you choose a type that goes well with your business activity and expansion plans.
  • Step 2 – Register your Articles of Incorporation with complete company details to the Board of Trade.
  • Step 3 – Registration with Federal Revenue Bureau, The State Authority, and The Municipal Authority.
  • Step 4 – Register your entity at the Brazilian Central Bank
  • Step 5 – The last step is to open a bank account in Brazil.

Partnering with the reliable employer of record companies in Brazil can save you from the risks of making mistakes and facing penalties. Skuad can help you in diversifying operations in Brazil without the need to set up an entity. Click here to know everything about it.

What Is PEO? Understanding The Basic Difference Between PEO And EOR

A Professional Employer Organization (PEO) is an organization that works with mid and small-scale companies. This partnership is called co-employment. It offers services like HR outsourcing, payroll management, taxation, compliances, and employee benefits. Despite these services, all the major employee decisions lie with the employer only.

On the other hand, EOR offers more or less similar services as a professional employer organization in Brazil. But, unlike PEO, EOR becomes the legal employer. It holds all the liabilities of recruiting, employing, and terminating employees.

Employers that want to increase their competitiveness in the market and boost revenue should go for the EOR solution. It will take all the employee responsibilities off your shoulders. Skuad’s Brazil EOR (Employer of Record) is a leading global HR platform. Our professionals will ensure all the compliances are met and HR processes run smoothly. Find out more about Skuad here.

Conclusion

Brazil showers a plethora of lucrative commercial opportunities on its investors. The huge consumer market, international trade access to the rest of America, investor-friendly laws, and excellent infrastructure facilities make Brazil a promising destination for business expansion.

But the Brazilian commercial market also has its set of complexities. Collaborating with an EOR solution provider can help in mitigating such challenges. It is where Skuad steps in. Skuad’s Brazil EOR (Employer of Record) solution allows you to build a brilliant remote team without setting up a local entity.

Why should you partner with us? Because our professionals help you to discover exceptional global talent. Our cloud-based HR platform removes the hassles of creating entities, managing taxes, and local laws. And we aim to eradicate every roadblock that comes in the way of your business expansion process.

You can completely trust a brand that has a presence in over 150 countries. So what are you waiting for? Fill this form and fulfill your dream of expanding your business in Brazil.

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