Employer of Record in Brazil: A Complete Guide for 2026

Introduction

Using an employer of record in Brazil is how most foreign companies access Latin America's largest talent market without spending months on entity setup. Brazil's tech hubs, from São Paulo's fintech corridor to Recife's Porto Digital, offer deep pools of engineering, customer success, and finance talent at 30–40% lower cost than equivalent roles in North America.

The compliance stack, however, is one of the most demanding in the world. Brazil's CLT (Consolidation of Labor Laws) governs 900+ articles of employment law. Every hire triggers INSS (National Institute of Social Security) and FGTS (Fundo de Garantia por Tempo de Serviço - Severance Indemnity Fund) contributions, mandatory 13th salary, 30 days of annual leave, and eSocial filings, before the first payslip runs.

This guide covers Brazil's employment laws, payroll obligations, CLT compliance, and what hiring through an EOR actually involves in 2026.

Brazil at a glance

Population: 213.5 million

Currency: Real (R$) (BRL)

Capital city: Brazilia

Languages spoken: Portuguese

GDP: USD 2.19 Trillion

Hire in Brazil

Let’s discuss how you can simplify your hiring process in Brazil yet stay compliant: 

What are the hiring modes in Brazil?

You may either set up an entity in Brazil or partner with an employer of record in Brazil.

Brazil's employment rate is considered good, with 70% of the workforce geared towards the service sector. 

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

These portals do an excellent job of bridging the gap between employers and fresh graduates. Companies can source, screen, and hire the best candidates from these portals. 

However, relying too much on these portals can have a drawback. Companies may encounter misleading profiles at times.

Background verification is standard before extending offers in Brazil, and getting it wrong before contracts are signed creates risk that is harder to unwind after onboarding begins, particularly given the strength of CLT (Consolidation of Labor Laws) employee protections.

Skuad's background checks platform helps support the pre-hire verification workflow as part of the broader onboarding process:

• Helps verify candidate identity, employment history, criminal records, and education credentials before contracts are signed
• Integrates background verification into the onboarding workflow alongside employment contracts and payroll setup, so the full process runs through one platform
• Supports verification across multiple markets, helping foreign companies maintain consistent pre-hire standards across different hiring locations

See how Skuad supports background verification as part of the hiring workflow

Onboarding & agreements per Brazilian business culture

The employee onboarding process for Brazil involves providing the necessary information, training, and support for their success in their roles. 

You can follow the guidelines below to effectively onboard new employees and ensure their success in your organization: 

How to successfully onboard employees in Brazil

1. Develop a detailed plan outlining the steps involved in onboarding, including the duration, responsible parties, and key activities.
2. Provide clear and timely communication throughout onboarding, ensuring new employees feel informed and supported.
3. Offer training on company policies, procedures, and job-specific skills to enable new hires to perform their duties effectively.
4. Assign a mentor or buddy to guide new employees and answer any questions.
5. Schedule regular check-ins with new employees to assess their progress and address any concerns.
6. Provide constructive feedback and support to help new employees succeed in their roles.

Taxes

Here is a detailed breakdown of Brazil's tax rate for employers and employees: 

Employer taxation in Brazil

Employee taxation

Compliance requirements for employers in Brazil

You can hire in Brazil securely after considering the following compliance requirements: 

Brazil employment laws 

Before you initiate hiring in Brazil, it is essential to understand its basic employment structure. The Brazilian 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) administers all employment laws in Brazil under the Federal Constitution of 1988. 

The Labor Unions compulsorily represent every employee and employer operating in Brazil.

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.

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.

Payroll in Brazil

Brazil's payroll cycle can be monthly or bi-weekly. It is paid on the 15th and 30th of every month. Brazil also mandates the concept of the 13th salary. 

This means that employees will get a 13th salary equal to one month's pay at the end of the year.

Brazil's 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, can add 70–100% on top of gross salary, making total employment cost significantly higher than base pay alone.

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

Best ways to pay your employees in Brazil

You may either pay your employees directly via bank transfer and checks, or, as a simpler alternative, you may use an EOR as your payroll partner.

However, companies looking to pay employees in Brazil should consider payroll outsourcing services. 

Brazil payroll outsourcing will free them from all the payroll and tax complications and formalities. 

Salary in Brazil

The minimum wage in Brazil varies regionally, with an acceptable nationwide level of 1,621.00 Brazilian Reais. 

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.

Benefits & compensation per Brazilian employment law

Brazil's labor law mandates that you provide a comprehensive benefits package to all your employees. 

Moreover, Brazil is the only country that offers free universal health coverage to all its citizens. Here's a breakdown of some of the key compensation and benefits in Brazil:

Workers' rights per Brazilian labor laws

You must respect the following worker rights per the labor laws in Brazil:

Remote and hybrid work policy in Brazil

Most remote workers are classified as exempt employees per Brazilian labor laws. 

Moreover, there are no clear provisions for remote & hybrid work systems in Brazil. You can factor in the following unique considerations when deciding upon Brazil's workplace culture for remote workers in Brazil: 

• The General Data Protection Law (LGPD) requires you 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.

Furthermore, you can review this remote work readiness checklist to ensure proper technology and infrastructure requirements.

Leave policy per Brazil employment laws

You can align your HR policy with the Brazilian leave policy for better work productivity and employee morale: 

Annual Holidays  in Brazil: 

• January 1st: Thursday: New Year (U.S. & Brazil)
• January 19: Monday: Martin Luther King, Jr. Day (U.S.)
• January 20: Tuesday: St. Sebastian Day (Rio de Janeiro only)
• January 25: Sunday: São Paulo Foundation (São Paulo only)
• February 2nd: Monday: Our Lady of Navigators (Porto Alegre only)
• February 16: Monday: Presidents’ Day (U.S.)
• February 16–17: Monday & Tuesday: Carnival (Brazil)
• February 18: Wednesday: Ash Wednesday (Brazil)
• March 6: Friday: Pernambuco Magnum Day (Recife only)
• March 19: Thursday: Saint Joseph (Fortaleza only)
• March 25: Wednesday: Ceará Magnum Day (Fortaleza only)
• April 3: Friday: Good Friday (Brazil)
• April 5: Sunday: Easter (Brazil)
• April 21: Tuesday: Tiradentes (Brazil)
• April 21: Tuesday: Brasilia Foundation (Brazil)
• April 23: Thursday: Saint George (Rio de Janeiro only)
• May 1st: Friday: Labor Day (Brazil)
• May 25: Monday: Memorial Day (U.S.)
• June 4: Thursday: Corpus Christi (Brazil)
• June 19: Friday: Juneteenth (U.S.)
• June 24: Wednesday: Saint John (Recife & Salvador only)
• July 2: Thursday: Bahia State Independence (Salvador only)
• July 3: Friday: Independence Day (observed) (U.S.)
• July 9: Thursday: São Paulo State Day (São Paulo only)
• July 16: Thursday: Our Lady of Mount Carmel (Recife only)
• August 15: Saturday: Assumption of the Virgin Mary (Belo Horizonte only)
• September 5: Saturday: Amazonas Day (Manaus only)
• September 7: Monday: Labor Day (U.S.)
• September 7: Monday: Brazil’s Independence Day (Brazil)
• September 20: Sunday: Rio Grande do Sul State Day (Porto Alegre only)
• October 12: Monday: Our Lady Aparecida (Brazil)
• October 12: Monday: Indigenous Peoples Day / Columbus Day (U.S.)
• November 2: Monday: All Souls Day (Brazil)
• November 11: Wednesday: Veterans Day (U.S.)
• November 15: Sunday: Proclamation of the Republic (Brazil)
• November 20: Friday: Black Awareness Day (Brazil)
• November 26: Thursday: Thanksgiving (U.S.)
• November 30: Monday: Evangelical Day (Brasília only)
• December 8: Tuesday: Our Lady of Conception (Belo Horizonte only)
• December 25: Friday: Christmas (U.S. & Brazil)

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.

Employee termination in Brazil & offboarding 

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, contract agreements can be dismissed 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 Accidents Prevention,
• Employees with employment-related injuries and
• Employees who come under collective contracts.

PEO

A Professional Employer Organization (PEO) is an organization that works with mid- and small-scale companies in a partnership called co-employment. 

It offers HR outsourcing, payroll management, taxation, compliance, and employee benefits. Despite these services, all the major employee decisions lie with the employer only.

Conclusion

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 your team can focus on building the 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 legally employs workers. The client company retains day-to-day management of the employee's work. This allows foreign companies to hire in Brazil without registering a CNPJ (National Registry of Legal Entities) or setting up a local entity.

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

EOR fees in Brazil typically range from USD 199 to USD 600 per employee per month, depending on the provider. Employer-side contributions add approximately 70–100% on top of gross salary. 

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

Most of the EOR services in Brazil help foreign companies to hire compliantly under the CLT without obtaining a CNPJ, enrolling in eSocial independently, or remitting INSS and FGTS contributions directly. 

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

Brazil's labor courts are among the most active in the world, processing over 2 million cases annually. If a contractor relationship shows elements of subordination, fixed hours, or exclusivity, courts can reclassify the worker as a CLT employee retroactively, triggering back-payment of INSS, FGTS, 13th salary, vacation bonuses, and statutory severance. 

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

An EOR acts as the sole legal employer under the CLT and carries full compliance, payroll, and liability obligations, with no local entity required from the client. A PEO operates on a co-employment model where the client retains more direct employer responsibilities and typically needs a registered Brazilian entity. 

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

Most EOR providers onboard employees in Brazil within two to five business days once documentation is confirmed, significantly faster than entity setup, which typically takes four to six months across CNPJ registration, eSocial enrollment, and multi-agency contribution setup. 

Conclusion

Brazil offers its investors a plethora of lucrative commercial opportunities. 

The country's huge consumer market, international trade access to the rest of America, investor-friendly laws, and excellent infrastructure facilities make It a promising destination for business expansion.

However, the Brazilian commercial market also has its set of complexities. Collaborating with an EOR solution provider can help mitigate such challenges. 

This 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? Our professionals help you discover exceptional global talent. Our cloud-based HR platform removes the hassles of creating entities and 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 with a presence in over 150 countries. So what are you waiting for? Fill out this form and fulfill your dream of expanding your business in Brazil.

FAQs

What is an employer of record in Brazil?

An Employer of Record (EOR) in Brazil manages employment responsibilities as per Brazillian culture in business, such as local onboarding, payroll, tax compliance, and adherence to local labor laws. By partnering with an EOR in Brazil, businesses can hire and pay employees and contractors in Brazil without setting up a local entity, thus facilitating global employment and ensuring legal compliance.

Is an employer of record the same as a PEO?

No, the employer of record differs from a PEO regarding roles and responsibilities in handling employees. A Professional Employer Organization (PEO) partners with companies to co-manage employee-related functions, whereas an Employer of Record (EOR) fully assumes all responsibilities related to hiring international employees, including onboarding, payroll, taxes, compliance with local laws, and more.

How much does an EOR cost?

The cost of an Employer of Record (EOR) depends on the number of employees, location, services needed, industry, and additional fees. You can check out Skuad’s cost calculator to estimate the cost of hiring an employee in Brazil or other 160+ countries using EOR services.

What are the employment rules in Brazil?

Brazil's employment laws cover minimum wage, working hours, vacation, sick leave, maternity/paternity leave, social security, and unionization. Any statutory violations will incur fines and penalties. Additionally, you must actively update employee work conditions on the eSocial platform.

What are the types of employment in Brazil?

Brazil offers indefinite-term, fixed-term, internship, outsourced, part-time, and temporary contracts. The choice of contract depends on your specific needs.

What is the difference between an employer of record and a staffing agency?

An EOR is the legal employer for your foreign workers, handling payroll, benefits, and legal compliance as per Brazil norms. In contrast, a staffing agency typically focuses on finding and providing temporary or contract workers to meet your short-term staffing needs.

While both can involve hiring employees, the EOR takes on the full legal and administrative responsibilities. At the same time, the staffing agency primarily acts as an intermediary between you and the temporary workers.