Brazil is one of the largest labor markets in Latin America, making it an important destination for companies building international teams.
For an international company, however, hiring an employee in Brazil involves more than finding the right candidate and agreeing on a salary.
Employers need to understand Brazilian employment contracts, payroll, social contributions, vacation, the 13th salary, FGTS, working hours, overtime, benefits, and the different ways a foreign company can structure employment.
This guide explains how to hire employees in Brazil in 2026 and the main issues global companies should understand before making their first hire.
Last updated: September 2026
Disclaimer: This article provides general information about hiring in Brazil and is not legal, tax, payroll, or employment advice. Brazilian employment requirements can vary according to the employee, industry, collective bargaining arrangements, and other circumstances. Companies should verify current requirements with qualified Brazilian professionals before hiring.
Can a Foreign Company Hire Employees in Brazil?
Yes, but the company needs an appropriate employment structure.
A foreign company entering Brazil can consider establishing its own Brazilian entity and hiring employees directly.
Another option is to use an Employer of Record (EOR).
An EOR can employ the worker locally while the international company manages the employee's day-to-day responsibilities. Depending on the arrangement, the EOR can handle local employment administration such as contracts, payroll, benefits, and required filings.
For a company making its first hire in Brazil, deciding on the employment structure before recruiting can help avoid unnecessary administrative complications.
3 Ways to Hire in Brazil
1. Hire Through Your Own Brazilian Entity
A company with an established Brazilian entity can hire employees directly.
The company then takes responsibility for areas such as:
- Employment contracts
- Payroll
- Government registrations
- Social contributions
- FGTS
- Employee benefits
- Tax and payroll obligations
- Employment records
- HR administration
This approach may make sense for companies planning a substantial, long-term presence in Brazil.
However, maintaining a local operation also means taking responsibility for Brazilian employment and payroll compliance.
2. Use an Employer of Record
An Employer of Record provides another option for companies that want to hire employees in Brazil without immediately establishing their own local entity.
The EOR becomes the local employer for the employment relationship while the international company manages the employee's work.
Depending on the provider and arrangement, an EOR can manage:
- Employment contracts
- Payroll
- Tax and payroll administration
- Social contributions
- Benefits
- Employee onboarding
- Local compliance processes
Deel currently offers an EOR solution for hiring employees in Brazil and states that its service handles local employment, payroll, benefits, and related compliance.
Affiliate disclosure: Some links on this page may be affiliate links. If you choose to use a service through my link, I may earn a commission at no additional cost to you.
👉 Explore Deel for hiring in Brazil
3. Hire Independent Contractors
Some companies use independent contractors when entering Brazil.
However, companies should not assume that simply calling a worker a "contractor" determines the legal nature of the relationship.
The actual working arrangement matters.
If the worker operates like an employee, the company should obtain appropriate Brazilian legal advice before choosing a contractor structure.
For companies that need a full-time employee relationship, an employee model or EOR may be more appropriate to evaluate.
Brazil Minimum Wage in 2026
Brazil's national minimum wage is R$1,621 per month from January 1, 2026.
The corresponding daily minimum is R$54.04, and the hourly minimum is R$7.37, according to Federal Decree No. 12,797.
However, companies should not assume that every professional employee will be paid the national minimum wage.
Actual salaries can be much higher depending on: job title, experience, industry, location, skills, seniority, collective bargaining agreements, and market conditions.
For example, an experienced software engineer in São Paulo will normally have a very different market salary from an entry-level position.
The statutory minimum wage is therefore a legal reference point, not necessarily a useful benchmark for professional hiring.
Working Hours in Brazil
Working hours are another important part of Brazilian employment compliance.
Government information states that normal working time is generally limited to 8 hours per day and 44 hours per week, subject to applicable rules and arrangements.
Overtime is generally subject to additional compensation, with government information stating a minimum overtime premium of 50% over the normal hourly rate.
International companies should therefore define working hours carefully in the employment arrangement.
This becomes particularly important for remote employees. For example, a US company may want a Brazilian employee to work according to US business hours. The company should make sure that the proposed schedule is compatible with applicable Brazilian employment rules.
The 13th Salary in Brazil
One of the most important concepts for international employers is Brazil's 13th salary, known as the décimo terceiro salário.
It is an annual employment benefit generally paid in two installments.
Government information states that the first installment is paid by November 30, while the second installment is due by December 20.
Example: Suppose an employee earns R$6,000 per month and qualifies for a full year's 13th salary. A simplified annual calculation would be: R$6,000 ÷ 12 × 12 = R$6,000.
So the employee's annual 13th salary would be approximately one additional monthly salary, subject to the applicable calculation rules.
For employees who work only part of the year, the entitlement is generally calculated proportionally.
Companies should include the 13th salary in their annual employment budget rather than treating it as an unexpected additional cost.
Vacation in Brazil
Brazilian employees are entitled to annual paid vacation under the applicable employment rules.
The Brazilian government lists annual vacation plus an additional one-third payment among the basic rights of employees.
This is an important difference for international employers who may be accustomed to vacation systems in other countries.
When calculating the cost of employing someone in Brazil, the company should consider not only the employee's regular salary but also the applicable vacation payment and additional one-third.
What Is FGTS?
FGTS, or the Fundo de Garantia do Tempo de Serviço, is an important part of Brazilian employment.
It is an employer-funded employment fund associated with the employee's employment relationship.
The Brazilian government identifies FGTS deposits as one of the basic employment obligations associated with hiring employees.
For international companies, FGTS is one reason why calculating the total cost of a Brazilian employee requires more than multiplying the monthly salary by 12.
Payroll should account for the applicable employer obligations and statutory payments.
INSS and Social Security
Brazilian payroll also involves social security contributions.
INSS is part of the country's social security system, and employers need to account for the applicable employer and employee contributions.
The exact calculation can depend on the employee's compensation and applicable rules.
Companies should therefore avoid using a single percentage to estimate every employee's total payroll cost. Instead, the payroll calculation should be based on the employee's actual compensation and current Brazilian rules.
Employee Benefits in Brazil
Brazilian employment packages can contain both statutory rights and additional company benefits. Depending on the employment arrangement, employers may need to consider:
- Social security
- FGTS
- Paid vacation
- Vacation additional payment
- 13th salary
- Transportation-related benefits
- Meal or food benefits
- Health insurance
- Life insurance
- Accident coverage
- Other benefits required by applicable collective agreements
Deel's current Brazil hiring information lists localized benefits including meal vouchers, social security, state pension-related benefits, and workers' compensation insurance.
The exact benefits required or offered can depend on the employee, employer, industry, location, and applicable collective bargaining arrangements.
Collective Bargaining Agreements Matter
One important point for international companies hiring in Brazil is that statutory law is not always the only source of employment requirements.
Collective bargaining agreements can establish additional rules for specific employees or industries, affecting areas such as: minimum salary levels, benefits, meal allowances, working hours, overtime, bonuses, and other employment conditions.
This means an international company should not assume that the national minimum wage alone determines the complete compensation package.
Before hiring, companies should identify whether a relevant collective agreement applies to the position.
What Should Be Included in a Brazilian Employment Contract?
Employment documentation should clearly establish the main terms of the relationship. Depending on the employment arrangement, important information can include:
- Employer information
- Employee information
- Job title
- Responsibilities
- Salary
- Payment schedule
- Working hours
- Work location
- Benefits
- Vacation
- Overtime arrangements
- Confidentiality
- Company policies
- Termination provisions
- Other applicable employment terms
For international companies, simply translating an employment agreement from another country may not be sufficient. The employment documentation should be prepared or reviewed for the Brazilian legal environment.
How to Hire an Employee in Brazil: Step-by-Step
Step 1: Define the Position — Before recruiting, establish job title, responsibilities, required skills, seniority, location, working hours, salary range, and benefits. This gives the recruitment process a clear structure.
Step 2: Confirm Where the Employee Will Work — The employee's location can affect salary expectations, benefits, and applicable employment arrangements. Determine whether the employee will work from São Paulo, Rio de Janeiro, Brasília, Recife, or another Brazilian city or region. Location should be clear before the employment offer is prepared.
Step 3: Decide on the Employment Structure — Choose whether the company will hire through its own Brazilian entity, use an EOR, or use a genuine independent contractor arrangement. This decision should be made before the employee starts work.
Step 4: Check Applicable Employment Requirements — Review minimum wage, collective bargaining requirements, working hours, overtime, vacation, 13th salary, FGTS, INSS, benefits, and payroll requirements.
Step 5: Calculate Total Employment Cost — Do not budget only for the employee's monthly salary. Consider: Salary + statutory employer costs + 13th salary + vacation-related costs + benefits + payroll administration. This gives the company a much more realistic picture of the cost of the hire.
Step 6: Prepare the Employment Documentation — Prepare the appropriate employment documentation before the employee begins work.
Step 7: Set Up Payroll — Payroll should be ready before the first salary payment. The company should have processes for monthly salary, taxes, INSS, FGTS, vacation, 13th salary, benefits, and other applicable deductions and contributions.
Step 8: Onboard the Employee — A professional onboarding process should explain job responsibilities, working schedule, payroll, benefits, vacation, company policies, communication tools, security procedures, and reporting structure.
Step 9: Maintain Compliance — Hiring is not a one-time event. Companies need ongoing processes for payroll, benefits, employee records, leave, and changes to Brazilian employment rules.
When Does an EOR Make Sense in Brazil?
An EOR can be one option for companies that want to hire in Brazil without immediately establishing their own local employment infrastructure. It may be worth evaluating when:
- You are making your first Brazilian hire
- You do not have a Brazilian entity
- You want to test the Brazilian market
- You want to expand gradually
- You need local payroll administration
- You want assistance with local employment compliance
Deel's current Brazil information states that companies normally need a local entity for direct employment, while its EOR solution allows companies to hire through its local structure.
👉 Explore Deel's Brazil EOR solution
EOR vs. Local Entity in Brazil
Consideration | EOR | Own Brazilian Entity |
|---|---|---|
Own local entity required | Generally no | Yes |
Payroll administration | Provider-managed | Company-managed |
Local employment administration | EOR-managed according to arrangement | Company responsibility |
Initial setup | Generally simpler | More administrative work |
Direct local employer | EOR | Company |
Suitable for initial market testing | Can be considered | Depends on business plans |
Long-term local operation | Depends on strategy | Can support a permanent operation |
The appropriate structure depends on the company's business plans, number of employees, expected duration of operations, budget, and legal requirements.
How Much Does It Cost to Hire an Employee in Brazil?
There is no single percentage that accurately describes the total cost of every employee in Brazil.
The total cost can depend on: base salary, FGTS, social security contributions, 13th salary, vacation and the additional one-third, benefits, collective bargaining requirements, payroll administration, and EOR fees (if applicable).
For example, Deel currently publishes an estimated employer-cost figure of 35.90% of employee salary plus meal voucher on its Brazil hiring page. This is a Deel-specific estimate, not a universal Brazilian employer-cost rate.
Companies should obtain an actual payroll calculation based on the employee's salary, location, employment structure, and applicable benefits before approving a hiring budget.
Common Mistakes International Companies Make When Hiring in Brazil
Mistake 1: Looking Only at the Monthly Salary — The monthly salary is only one part of the employment cost. 13th salary, vacation-related payments, FGTS, social security, and other obligations also need to be considered.
Mistake 2: Forgetting the 13th Salary — Companies unfamiliar with Brazilian employment practices may budget for 12 monthly salary payments only. The 13th salary should be included in the annual budget where applicable.
Mistake 3: Ignoring Collective Bargaining Agreements — The applicable employment package may depend on an industry or occupational collective agreement.
Mistake 4: Using a Foreign Employment Contract — A contract written for the US, UK, or another country may not reflect Brazilian requirements.
Mistake 5: Treating a Contractor Like an Employee — A contractor arrangement should reflect a genuine independent relationship. Companies should obtain local advice when the classification is unclear.
Mistake 6: Assuming Every Brazilian Employee Has the Same Compensation Package — Salary, benefits, collective agreements, and other conditions can vary. A company should evaluate the specific position rather than applying a single package to every employee.
Brazil Hiring Checklist
Recruitment: Job description prepared, salary range established, employee location confirmed, working hours defined, benefits package considered.
Employment Structure: Own Brazilian entity or EOR? Contractor model reviewed if applicable. Employment structure confirmed.
Compliance: Minimum wage checked, collective agreement checked, working hours reviewed, overtime rules reviewed, vacation requirements reviewed, 13th salary included, FGTS considered, INSS obligations considered.
Payroll: Salary calculation prepared, employer contributions calculated, employee deductions considered, payroll process ready, vacation payments planned, 13th salary planned.
Onboarding: Employment documentation ready, payroll information collected, benefits explained, company policies provided, equipment and systems ready, manager and team introduced.
Frequently Asked Questions
Can a US company hire an employee in Brazil?
Yes. A US company can employ workers in Brazil, but it needs an appropriate employment structure and must comply with applicable Brazilian employment requirements. The company can evaluate establishing its own Brazilian entity or using an EOR arrangement.
An EOR can provide a structure for a foreign company to employ workers in Brazil without establishing its own local entity. The exact legal and commercial arrangement should be confirmed with the EOR and appropriate Brazilian advisers.
Brazil's national minimum wage is R$1,621 per month from January 1, 2026. The corresponding daily amount is R$54.04, and the hourly amount is R$7.37. However, professional salaries and applicable collective agreements can result in higher pay.
The 13th salary is an annual employment benefit generally paid in two installments. The first installment is due by November 30 and the second by December 20 under the general rules.
Yes. Annual paid vacation is a basic employment right, together with an additional one-third payment.
Can I hire someone in Brazil without opening a local company?
What is the minimum wage in Brazil in 2026?
What is the 13th salary in Brazil?
Do employees in Brazil receive paid vacation?
What is FGTS?
FGTS is Brazil's employment fund. Employers have obligations to make the applicable FGTS deposits for covered employees.
The normal working period is generally limited to 8 hours per day and 44 hours per week, subject to applicable legal and collective arrangements.
Yes. Government information states that overtime is generally paid with a premium of at least 50% over the normal hourly rate, subject to applicable rules and agreements.
No. A recruitment agency helps a company find candidates. An EOR provides an employment structure in which the EOR can serve as the local employer and manage specified employment administration. A company may use a recruitment agency to find a candidate and then use an EOR to employ that person.
How many hours can an employee work in Brazil?
Is overtime paid in Brazil?
Is an EOR the same as a recruitment agency?
Final Thoughts: Hiring in Brazil Requires More Than a Salary Offer
Brazil offers international companies access to a large labor market, but hiring successfully requires an understanding of the local employment framework.
Before making an offer, companies should consider employment structure, local employment requirements, payroll, 13th salary, vacation, FGTS, INSS, working hours, benefits, and collective bargaining requirements.
For companies with an established Brazilian operation, direct employment through their own entity may fit their business model.
For companies making their first hire without a local entity, an EOR is another structure to evaluate.
The most important step is to understand the employment model before hiring and calculate the complete employment cost rather than looking only at the monthly salary.
Planning to hire in Brazil? Start with the employment structure—not just the job post.
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