Employer of Record in Brazil: A Complete Guide for 2026

What are the compliance requirements for employers in Brazil?

Brazil's employment laws are governed by the Consolidação das Leis do Trabalho (CLT), a comprehensive labor code containing 900+ articles that regulates contracts, working conditions, benefits, termination, and union representation under the Federal Constitution of 1988.

Labor unions compulsorily represent every employee and employer operating in Brazil.

Employment contracts in Brazil are predominantly for an indefinite term. Fixed-term employment contracts are allowed only in specific cases, such as temporary demand, seasonal work, or experience contracts during probation.

Employment-at-will, as understood in the US, does not exist in Brazil. Either party can terminate a contract without cause, but the employer must provide advance notice (minimum 30 days, plus 3 days per year of service) and pay statutory severance, including the 40% FGTS penalty.

Brazil's employment framework, governed by the CLT's 900+ articles, mandatory eSocial filings, and multi-agency contribution obligations across INSS, FGTS, RAT, and Sistema S, creates significant administrative overhead for foreign companies hiring without a local entity.

Skuad helps foreign companies navigate the employment lifecycle across 160+ countries from a single platform, supporting contract management, onboarding workflows, and ongoing employment administration without requiring local entity setup.

See how Skuad supports employment management across 160+ countries

What types of employment contracts are used in Brazil?

Brazil's CLT recognizes three main employment contract types: indefinite-term (contrato por prazo indeterminado), fixed-term (contrato por prazo determinado), and intermittent (contrato de trabalho intermitente, introduced by the 2017 Labor Reform). The indefinite-term contract is the standard and most common form of employment.

All contract types must be registered in eSocial and comply with CLT minimum requirements, including job description, compensation, working hours, and applicable collective bargaining agreement (CBA) terms.

Are non-compete clauses enforceable in Brazil?

Non-compete clauses are not explicitly regulated by the CLT, but Brazilian courts generally uphold them under the principle of contractual freedom (CLT Article 444), provided they meet specific conditions established through case law.

For a post-employment non-compete clause to be enforceable in Brazil, it must meet all of the following:

• Time limit: The restriction must be reasonable. Courts generally accept up to two years as the maximum duration
• Geographic scope: The clause must be limited to the territories where the employer actually operates, not a blanket nationwide or global restriction
• Financial compensation: The employer must pay the employee adequate compensation during the non-compete period. Without this, courts are likely to void the clause
• Relevance to role: The restriction must be tied to the employee's actual access to confidential information, trade secrets, or competitive knowledge. A blanket non-compete applied to a role with no access to proprietary information is unlikely to hold
• Clear terms: The clause must specify the restricted activities, duration, geographic area, and compensation in writing, either in the employment contract or a separate agreement

Non-compete disputes are resolved in Brazil's labor courts (Justiça do Trabalho). If a clause is found to be overly broad or lacks financial compensation, the court can either void it entirely or reduce its scope.

Non-solicitation clauses (restricting the employee from recruiting former colleagues or clients) follow the same enforceability framework. They are valid under CLT Article 444 but subject to the same reasonableness tests.

Note: Bill PL 4803/24, currently under analysis by Brazil's Chamber of Deputies, proposes formal regulation of non-compete clauses within the CLT. If passed, it would codify many of the requirements that courts already apply through case law.

How does payroll work in Brazil?

Brazil's payroll runs on a monthly or bi-weekly cycle, paid on the 15th and 30th of each month, with a mandatory 13th salary (equal to one month's gross pay) split into two installments: the first by November 30 and the second by December 20.

The payroll stack runs across multiple contribution authorities with monthly, mid-year, and year-end statutory payment deadlines. Employer-side obligations (INSS, FGTS, RAT, Sistema S, 13th salary, and vacation bonuses) add 70–100% on top of gross salary, making total employment cost significantly higher than base pay alone.

Skuad helps support payroll compliance across 160+ countries through its platform:

• Supports payroll processing in 70+ currencies with statutory deduction workflows facilitated inside the platform
• Helps track statutory bonus and benefit accrual, including 13th salary and vacation bonuses, against their year-end and mid-year deadlines
• Supports audit-ready record-keeping for regulatory inspection cycles

Model total employment cost, base salary, employer contributions, and statutory benefit accruals through Skuad's Employee Cost Calculator

What are the best ways to pay employees in Brazil?

The standard payment methods for employees in Brazil are bank transfer (TED or PIX) and, less commonly, checks. Foreign companies without a local entity typically use an EOR to process payroll in BRL, which handles statutory deductions, contribution remittances, and eSocial filings as part of the payroll cycle.

What is the minimum wage in Brazil?

Brazil's federal minimum wage is R$ 1,621.00 per month (R$ 7.37/hour) from January 1, 2026, set by Decree 12,797/2025. Some states set higher floors: São Paulo's state minimum is R$ 1,804, and Rio de Janeiro's ranges up to R$ 3,158.96 depending on the occupation. Employers must apply whichever rate is higher: the federal minimum, the state minimum, or the floor set by the applicable collective bargaining agreement.

To estimate the salaries of your newly hired employees in Brazil, you can explore average salary benchmarks for various roles, adjust for local taxes, and view employer costs for hiring in Brazil.

Our salary insight tool provides detailed information on Brazil's minimum salary, gross and net salaries, considering Brazilian withholding tax and other local legal obligations such as social security and benefits.

What are the mandatory employee benefits in Brazil?

Brazilian labor law mandates a comprehensive benefits package for every CLT-registered employee, including 13th salary, 30 days of paid annual leave with a one-third vacation bonus, FGTS contributions, transportation vouchers (vale-transporte), and access to Brazil's universal public healthcare system (SUS).

Brazil is one of the few countries that provides free universal health coverage to all citizens through SUS, though most employers also offer private health insurance (plano de saúde) as a supplementary benefit to remain competitive.

What are the worker rights and entitlements in Brazil?

Brazilian workers are entitled to a maximum 44-hour workweek, overtime pay at 150% of regular salary (200% on holidays), a mandatory one-hour rest break for shifts exceeding six hours, and full CLT protections covering termination, maternity leave, and union representation.

See how Skuad handles INSS, FGTS, and eSocial filings for your Brazil team. Book a demo.

What are the remote work rules in Brazil?

Brazil regulates remote work (teletrabalho) under CLT Articles 75-A through 75-F, introduced by the 2017 Labor Reform and updated in 2022.

Teleworkers who are paid by output or task (produção ou tarefa) fall under CLT Article 62, III, and are not subject to working-hours controls, meaning overtime rules do not apply to them. Teleworkers on a fixed schedule remain subject to standard CLT working-hour limits and overtime provisions.

Key rules for remote and hybrid employment in Brazil:

• The General Data Protection Law (LGPD) requires employers to have measures in place to protect employee data accessed remotely.
• Remote workers retain the same rights as office employees, including benefits, vacation time, and minimum wage.
• Notice and severance pay requirements for termination apply equally to on-site and remote employees.
• The remote work arrangement must be formalized in the employment contract or a written addendum, specifying responsibility for equipment costs and infrastructure
• Employers can require a remote worker to return to in-office work with a minimum 15-day transition period, per CLT Article 75-C

What are the visa and work permit requirements in Brazil?

Any foreign national who is not a Brazilian citizen or permanent resident needs both a work permit and a visa to be employed legally in Brazil. The process is employer-led: the Brazilian entity (either your own CNPJ or the EOR's) files for work authorization first, and the employee then applies for the visa at a Brazilian consulate in their home country.

Brazil uses a two-step system:

• Step 1: The employer submits a work permit petition to the Ministry of Labor and Employment (MTE), justifying why the foreign hire is necessary and that the role cannot be filled locally
• Step 2: Once the MTE approves the permit, the foreign national applies for the appropriate visa at a Brazilian consulate. On arrival in Brazil, they register with the Federal Police to obtain a CRNM (Carteira de Registro Nacional Migratório), the in-country registration document required to live and work

Main visa types for foreign workers:

Key requirements and rules:

• The foreign worker must earn at least R$ 3,242 per month (twice the federal minimum wage as of 2026) to qualify for a VITEM V
• Brazil's two-thirds rule requires that at least two-thirds of an employer's payroll be composed of Brazilian workers, limiting the proportion of foreign hires
• Work permit processing typically takes 30 to 60 days through the MTE, with additional time for the consular visa appointment
• Work permits and visas are tied to the sponsoring employer. If the employment relationship ends, the employer must notify immigration authorities and the visa is cancelled

For foreign companies hiring through an EOR, the EOR's Brazilian entity acts as the visa sponsor. This removes the need for the foreign company to hold its own CNPJ for immigration purposes.

For a full guide on work permit types and processing, see Skuad's Work Permits in Brazil page.

What is the leave policy in Brazil?

Brazil's CLT mandates 30 calendar days of paid annual leave after 12 months of continuous service, plus a one-third vacation bonus (abono de férias) paid at the start of the leave period. Employees can sell up to 10 days of their vacation (abono pecuniário). 

Additional statutory leave includes maternity leave (120 days, extendable to 180 under the Empresa Cidadã program), paternity leave (5 days, extendable to 20), bereavement leave (2 days), and marriage leave (3 days).

National holidays

City-specific holidays

What are the permissible background checks in Brazil?

You can conduct background checks on employees in Brazil following the country's labor laws and the General Data Protection Law (LGPD).

The key rules and restrictions include:

• Criminal Records: You can only request a criminal background check if the position requires it for safety reasons or involves a high level of trust (e.g., security personnel or financial positions).
• Educational and Employment History: Verifying past employment, education credentials, and professional qualifications is generally permissible and common in Brazil as long as the information is relevant to the position.
• Credit History: Checking an employee’s credit history is generally not allowed unless directly related to the job, such as in financial roles where trustworthiness is crucial.
• Social Media: While checking public social media profiles is technically allowed, Brazilian law discourages employers from hiring based on personal lifestyle choices unrelated to job performance.‍
• Health Records: Health information is classified as sensitive data and can only be requested if it's relevant to the job or required by law, such as for positions involving physical labor.

What is the employee termination & offboarding process in Brazil?

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

According to the employment contract law in Brazil, employment contracts can be terminated by giving proper notice to the parties involved.

However, some employees are exempt from this rule of termination of employment in Brazil. They are:

• Union representatives,
• Pregnant employees,
• Members of CIPA – Internal Committee for Accident Prevention,
• Employees with employment-related injuries, and
• Employees who come under collective contracts.

What is the probation period in Brazil?

The standard probation period (contrato de experiência) in Brazil is 45 days, extendable once by mutual agreement for a total maximum of 90 days. During probation, either party can terminate the contract with reduced notice and severance obligations compared to an indefinite-term contract.

If the employer terminates during probation without cause, the employee is entitled to compensation equal to 50% of the remaining probation period, plus proportional 13th salary, vacation, and FGTS with the 40% penalty. If neither party terminates by the end of the 90-day period, the contract automatically converts to an indefinite-term agreement with full CLT protections.

What is the difference between a PEO and an EOR in Brazil?

An EOR (Employer of Record) acts as the sole legal employer under the CLT and carries full compliance, payroll, and liability obligations, with no CNPJ required from the client.

A PEO (Professional Employer Organization) operates on a co-employment model where the client retains more direct employer responsibilities and typically needs a registered Brazilian entity.

For more on PEO services in Brazil, see Skuad's PEO in Brazil page.

What is the difference between EOR and own entity (CNPJ) in Brazil?

Choosing between an EOR and setting up your own entity (CNPJ) in Brazil depends on your hiring timeline, team size, and long-term market commitment.

An EOR lets you hire within days and eliminates the administrative burden of CNPJ registration, eSocial enrollment, and multi-agency contribution setup. A CNPJ gives you full operational control but requires 4–6 months of setup and ongoing local compliance infrastructure.

What are the risks of hiring in Brazil without an EOR or local entity?

Foreign companies that engage workers in Brazil without a registered entity (CNPJ) or an EOR take on significant legal, financial, and operational exposure.

• Contractor misclassification risk: The most common workaround is classifying workers as independent contractors. But Brazil's labor courts (Justiça do Trabalho), which process over 2 million cases annually, apply a substance-over-form test. If the relationship shows subordination, fixed hours, exclusivity, or integration into the company's operations, courts can reclassify the worker as a CLT employee retroactively. This triggers back-payment of all statutory obligations for the entire period, including INSS and FGTS contributions, 13th salary, vacation bonuses, and severance, plus penalties and interest.‍
• No legal standing to defend claims: Foreign companies without a CNPJ cannot appear as a party in Brazilian labor courts. If a worker files a claim, the company has no local legal standing to defend itself, which effectively means it loses by default.
• Tax and regulatory non-compliance: Paying a worker in Brazil without processing payroll through a local entity means no INSS or FGTS contributions are being remitted, no eSocial filings are being made, and no income tax is being withheld. All of these are statutory requirements with penalties for non-compliance.
• Permanent establishment risk: Depending on the nature and duration of the engagement, hiring workers in Brazil without a registered entity can trigger permanent establishment (PE) classification under Brazil's tax treaties. This exposes the foreign company to corporate income tax obligations in Brazil.

An EOR removes all four of these risks by acting as the legal employer through its own registered CNPJ, handling all CLT compliance, statutory contributions, and eSocial filings from day one.

How to choose an EOR in Brazil

The right EOR for Brazil should hold a registered CNPJ, handle CLT contracts and eSocial filings directly (rather than through a subcontractor), and provide transparent pricing that includes all employer contributions.

Given that employer-side obligations add 70–100% on top of gross salary, understanding exactly what is and is not included in the EOR fee is critical.

Key evaluation criteria:

• Direct entity vs. partner network: Does the EOR operate through its own Brazilian entity, or does it subcontract to a third party? Direct entities offer more control over compliance and employee experience
• Pricing transparency: Is the monthly fee all-inclusive, or are employer contributions, 13th salary, and vacation bonus accruals charged separately?
• Onboarding speed: How quickly can the EOR execute a CLT contract and register the employee in eSocial?
• Termination support: Does the EOR handle advance notice, FGTS penalty, and labor court documentation for compliant offboarding?
• Platform capabilities: Can you manage contracts, payroll, and benefits from a single dashboard, or are processes manual?

EOR pricing comparison for Brazil (2026)

All fees shown are the EOR provider's platform/service fee only. Employer-side contributions (INSS, FGTS, RAT, Sistema S, 13th salary, vacation bonuses) are charged on top across all providers and add approximately 70–100% above gross salary in Brazil. Always confirm which contributions are included in the quoted fee before comparing total cost.

Start hiring in Brazil without the compliance overhead

Brazil's employment framework is one of the most structured in Latin America, and one of the most consequential to get wrong. CLT compliance, eSocial filings, INSS and FGTS contributions, 13th salary, and labor court risk all run simultaneously from the first hire.

Skuad helps support that operational complexity from a single platform across 160+ countries: employment contracts, payroll in 70+ currencies, statutory benefit administration, contribution tracking, and termination support, so companies can focus on building their Brazil operation.

Companies across technology, BPO, fintech, and nearshore services use Skuad to access the Brazilian talent market without CNPJ registration or local HR infrastructure.

Start hiring in Brazil without local entity setup. Book a demo.

FAQs

1. What is an employer of record in Brazil?

An employer of record in Brazil is a locally registered company that becomes the legal employer of your workers under the CLT. The EOR holds the CNPJ, issues compliant employment contracts, remits INSS and FGTS contributions, files eSocial events, and administers statutory benefits like 13th salary and vacation bonuses. Your company retains full day-to-day management of the employee's work without needing its own Brazilian entity.

2. How much does an employer of record in Brazil cost?

EOR platform fees in Brazil range from USD 199 to USD 699 per employee per month, depending on the provider. Some providers also require a refundable salary deposit. Employer-side contributions (INSS, FGTS, RAT, Sistema S, 13th salary, and vacation bonus accruals) are charged on top and add approximately 70–100% above gross salary. Always confirm which contributions are included in the quoted fee before comparing providers..

3. Can a foreign company hire in Brazil without setting up a local entity?

Yes. An EOR in Brazil enables foreign companies to hire under the CLT without registering a CNPJ, enrolling in eSocial independently, or remitting INSS and FGTS contributions directly. The EOR acts as the legal employer through its own registered entity, handles all statutory filings and contributions, and executes CLT-compliant contracts on your behalf. This is the standard path for companies entering the Brazilian market.

4. What are the risks of hiring contractors in Brazil instead of employees?

Brazil's labor courts process over 2 million cases annually. If a contractor relationship shows subordination, fixed hours, or exclusivity, courts can reclassify the worker as a CLT employee retroactively. This triggers back-payment of INSS and FGTS contributions, 13th salary, vacation bonuses, and statutory severance for the entire period, plus penalties and interest. Foreign companies without a CNPJ face additional exposure because they have no legal standing to defend the claim locally.

5. What is the difference between an EOR and a PEO in Brazil?

An EOR acts as the sole legal employer under the CLT, carrying full compliance and liability, with no CNPJ required from the client. A PEO uses a co-employment model where the client shares employer responsibilities and typically needs a registered Brazilian entity. For foreign companies entering Brazil without a local presence, an EOR is the standard path because it eliminates the CNPJ requirement entirely.

6. How quickly can an EOR onboard an employee in Brazil?

Most EOR providers onboard employees in Brazil within 2–5 business days once documentation is confirmed. This includes executing the CLT contract, registering the employee in eSocial, and setting up payroll and benefit administration. By comparison, setting up your own entity (CNPJ registration, eSocial enrollment, multi-agency contribution setup) takes 4–6 months before the first hire can begin.

7. How does Skuad handle data security and compliance in Brazil?

Skuad's platform is built with enterprise-grade security, including SOC 2 compliance, end-to-end encryption for employee data, and role-based access controls. For Brazil specifically, all personal data processing complies with the LGPD (Lei Geral de Proteção de Dados), Brazil's data protection law. Employee records, payroll data, and contract documents are stored securely with audit trails for regulatory inspections.