Hiring an Employee in Brazil

Brazil has a prescriptive employment law system, where contractual terms are less important than the factual substance of the employment relationship. Understanding the employment law rules is essential for those looking to hire Brazil-based employees.

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Can a foreign company hire a Brazilian employee directly?

Generally, no. A foreign company must either incorporate a local entity (obtaining a CNPJ) or engage an Employer of Record (EOR) service to comply with CLT requirements and eSocial reporting obligations. Without a Brazilian legal presence or an EOR, it is not possible to make valid payroll contributions, register the employment relationship, or meet the statutory entitlements described in this guide. See our guide on setting up a company in Brazil as a prerequisite step.

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Brazil has a very prescriptive and detailed employment law system. The main body of law is set out in the CLT. However, the rules are also set out in the Federal Constitution and many collective bargaining agreements (awards) negotiated between employer and employee trade unions.

For foreign companies hiring remote developers or other talent in Brazil, understanding the legal requirements from the outset, including eSocial registration, payroll obligations, and the cost of hire, is essential to avoiding significant liability.

Brazilian labour law for foreign companies: onboarding and eSocial registration

Before an employee starts work, the employer must register the employment relationship on the eSocial digital platform. This step is mandatory and must be completed prior to the employee’s first day. eSocial replaced the physical work booklet (Carteira de Trabalho e Previdência Social, “CTPS“) as the primary record of employment for most sectors. The digital CTPS (CTPS Digital) is now generated automatically via eSocial. Employers should not wait until after the employee commences to complete this registration, as doing so attracts administrative penalties.

Recruitment process: What information can you seek from the prospective employee?

As a general rule, Brazilian labour law does not allow employers to impose conditions based on gender, race, place of origin, marital status, colour, age or family status (among others) as these are considered discriminatory.

Those who are regarded as having been discriminated against can seek moral damages from the prospective employer.

Due diligence: What can you check and what can you ask the candidate?

Brazilian employment law sets limitations regarding the information that the employer may request from the employee.

(a) Background check

In Brazil it is acceptable (and common) for employers to undertake a background check on the employee’s identity, education and professional history while the prospective employee is going through the recruitment process. This is done prior to making an employment offer to the employee.

The employer may request proof of education (such as certificates). The request must be linked to the screening process for the position.

When seeking information relating to the candidate’s employment history, it is important to confirm the information provided with the candidate during the interview, including confirmation that the employer may contact former employers and persons provided by the candidate as referees.

(b) Criminal record check

The general rule is that an employer cannot run a criminal check on potential candidates, as it is considered discriminatory behaviour (this is so even though under Brazilian law criminal records are regarded as public information accessible by anyone). This general rule aims to prevent discrimination against those who have been convicted of a crime or are going through a criminal investigation.

However, Superior Labour Court (TST) case law recognises a specific list of roles where criminal checks are permitted during the recruitment process. These include: domestic employees; caregivers of minors, the elderly or people with disabilities; road transport drivers; employees working in the agricultural sector who handle sharp tools; bank employees; employees who work with toxic substances, narcotics or weapons; and employees with access to confidential or sensitive data.

Importantly, even where a criminal check is permitted, the existence of a prior conviction does not automatically disqualify a candidate. The TST’s position is that the criminal history must be directly relevant to the duties of the role in question. Using a conviction for an unrelated offence as a basis for rejection may still constitute discriminatory conduct and expose the employer to a damages claim.

To run a permitted criminal check it is not necessary to ask for the candidate’s permission or to notify the candidate. The employer may request the relevant personal information as part of the recruitment process.

Note that Brazil’s criminal justice system operates at both Federal and State levels, with the majority of offences dealt with by State courts. For this reason, it is advisable to ask the candidate for their previous addresses for the past five years.

(c) Other information

Brazilian law is quite restrictive on the information that can be sought from employees and checked during the screening process. It is recommended that legal advice be sought during the recruitment process.

Making an offer: When is it binding?

Once the employer has sent an employment offer to the employee, the offer is binding on the employer. Moreover, under Brazilian law a candidate may file an employment action seeking compensation for damages arising from the expectation of being hired. This cause of action arises where the employer did not have a fair reason not to proceed. The employment courts will consider whether the candidate demonstrated that he or she fulfilled all requirements for the position offered.

Ongoing obligations: What are the mandatory entitlements?

The main mandatory entitlements set out by the CLT are:

(a) Minimum wage

There is a Federal minimum wage that is the base for all employees in Brazil. The Federal minimum wage may be increased (not lowered) by State and Municipal laws. The minimum wages are adjusted annually.

Additionally, collective employment agreements (awards) apply to most employees and contain mandatory minimum wages applicable to different roles.

(b) Overtime

The standard working hours in Brazil are eight hours per day or 44 hours per week (four hours on Saturday). Overtime is paid at a minimum additional rate of 50%, which may be increased by collective employment agreements. Generally, employees cannot work more than 10 hours per day.

Specific rules apply to different categories of employees, given that some roles carry particular restrictions on working hours.

(c) Vacation and other days off

Employees are entitled to 30 days of paid annual leave plus a bonus equivalent to one-third of their monthly salary, accruing after one full year of employment. Employees cannot opt out of taking paid leave. There are restrictions on when leave may be taken and a minimum number of consecutive days to be taken in a single period.

In addition to any days off provided for in awards and collective bargaining agreements, employees are also entitled to time off:

• for the time required to accompany a spouse or de facto partner to up to six medical appointments or examinations during pregnancy;
• for one day per 12-month period of employment to donate blood;
• for one day per year to take a child younger than seven to see a doctor;
• for up to two consecutive days to register to vote;
• for up to two consecutive days after the death of a spouse, ascendent, descendant or sibling who is a dependent registered on the employee’s work booklet;
• for up to three consecutive days after the employee’s wedding;
• for one day per 12-month period to undertake preventive cancer examinations;
• for up to five consecutive days after the birth of a child, adoption or determination of shared custody;
• in specific cases where the employee is summoned to undertake military service;
• for the days required to sit university entrance exams;
• for the time required to attend court; and
• if the employee is a trade union representative, for official international meetings of which Brazil is a member.

(d) Thirteenth salary

Employees are entitled to a mandatory extra salary payment by the end of each calendar year. This is called the “13th Salary” and is a distinctive feature of Brazilian employment law.

(e) Remunerated weekly day off

Employers must provide a 24-hour paid rest period for each week of work, preferably on Sundays.

(f) Social security contribution

Contribution rates payable by the employer generally range from 26.8% to 28.8% depending on the employer’s activity and tax regime. Employees are also liable for social security (INSS) payments, which range from 8% to 11% depending on their salary band.

(g) Federal Severance Pay Fund (FGTS) and FGTS Digital

The Federal Severance Pay Fund (Fundo de Garantia por Tempo de Serviço, “FGTS“) is a fund managed by the government-controlled bank Caixa Econômica Federal, created to support employees dismissed without cause.

FGTS is funded by a contribution of 8% of the employee’s monthly compensation, payable by the employer.

Since March 2024, FGTS contributions must be made through the FGTS Digital portal, which is integrated with eSocial. This replaced the former GFIP and GRRF collection forms. Employers must ensure their payroll systems are connected to eSocial and FGTS Digital to generate and pay the correct contribution each month.

Subject to certain conditions, an employee’s accumulated FGTS balance may be used to purchase real estate.

(h) Other entitlements

There are other employee benefits set out in the CLT or provided for in collective bargaining agreements, such as maternity and paternity leave, transportation subsidy, paid absences, and additional salary where the employee works in hazardous or unhealthy conditions.

Remote work contracts: hiring remote workers in Brazil

Foreign companies frequently engage Brazilian employees specifically for remote roles. This is a regulated employment arrangement under Brazilian law. Law 14,442/2022 amended the CLT to establish the current framework for telework (teletrabalho), with further clarifications introduced in 2024 and 2025.

The key rules for remote work contracts are:

• Contract requirement: The employment contract must expressly state that the employee is engaged under the telework regime. This must be reflected in the eSocial registration.
• Equipment and utilities: The contract must specify whether the employer or the employee will bear the cost of equipment (such as computers and peripherals) and infrastructure (such as internet and electricity). Where the employer provides these, they are not treated as salary for payroll tax purposes. Where the employee bears the costs, the contract should provide for reimbursement, the basis of which must also be specified in writing.
• Working hours: Remote employees are generally subject to the standard CLT working hours regime unless the role is classified as one exempt from hour control (typically managerial positions). Employers should clarify the applicable regime in the contract.
• Health and safety: Employers remain responsible for ensuring adequate ergonomic conditions for remote employees, including providing guidance and, where applicable, equipment.
• Hybrid arrangements: A hybrid model (part remote, part in-office) is permitted. The contract must specify the proportion of remote days.

Remote work arrangements do not exempt the employer from any of the mandatory entitlements described above, including FGTS, the 13th salary, annual leave, and social security contributions.

Cost of hiring an employee in Brazil: what employers should budget for

One of the most common questions from foreign companies entering the Brazilian market is: what is the total cost of hiring an employee in Brazil beyond the agreed salary? The statutory contributions and mandatory benefits represent a significant additional cost. The table below provides an indicative summary based on a standard employment contract under the Lucro Presumido or Lucro Real tax regimes. Rates under Simples Nacional differ and should be confirmed with a Brazilian employment lawyer.

Item	Estimated employer cost	Notes
FGTS (severance fund)	8% of gross salary	Paid monthly via FGTS Digital, integrated with eSocial
INSS (social security, employer share)	~20% of gross salary	Rate varies by activity and tax regime; additional RAT/FAP levies may apply
13th salary	1/12 of monthly salary per month accrued	Paid by 20 December each year (or upon termination)
Annual leave and one-third bonus	~11.11% of monthly salary	30 days leave plus the constitutional one-third bonus
Overtime and night-shift premiums	Variable	Minimum 50% premium on overtime hours; higher rates under some awards
Transportation subsidy (vale-transporte)	Variable	Employee contributes up to 6% of salary; employer covers the remainder
Indicative total on-costs	~60% to 80% on top of net salary	Varies by sector, tax regime, and applicable award

These figures are indicative only. The actual cost of hire depends on the employee’s salary level, the applicable collective bargaining agreement, and the employer’s tax regime. Legal and payroll advice specific to the company’s circumstances is strongly recommended before finalising any offer.

Collective bargaining agreements (awards)

Brazil has many trade unions. Collective bargaining agreements apply to a wide range of roles and economic sectors. These must be checked before an offer is made to the prospective employee, as they frequently impose minimum wages and entitlements above the CLT floor.

Specific employment types

Specific rules apply to various categories of employees. For instance, maritime workers are governed by the Maritime Labour Convention, 2006 (see Decree 10,671/2021). See our guide on termination and severance in Brazil for the rules that apply at the end of the employment relationship.

It is strongly recommended that you seek legal advice before proceeding with hiring an employee in Brazil.

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Last modified: 13 April 2026