🇧🇷 Hiring in Brazil

💡 Everything you need to know to hire and manage employees in Brazil through Toku. Toku handles payroll processing, tax withholding, social contributions, and statutory compliance. This guide covers what you need to plan costs and manage your team.

At a Glance

Onboarding a New Hire

Plan for 10-15 business days between submitting a new hire and their start date. Brazil requires a pre-employment medical exam (ASO) before hiring can be completed, so your new hire will need to attend the exam Toku arranges before their first day.

Submit the new hire through the Toku platform for the employment agreement, statutory registrations and payroll setup. See Onboard Contributors as a Client Admin in Toku for the steps. Toku will confirm the expected onboarding timing for your hire.

Employer Costs

Brazil has one of the highest employer payroll cost burdens in the world. On top of gross salary, employers pay:

As a rule of thumb, total cost of employment is roughly 135-140% of gross salary. On top of that, budget for the mandatory 13th salary (one extra month per year) and the one-third vacation bonus paid when employees take annual leave.

Employees pay their own social security (progressive rates of 7.5-14%, capped at BRL 988.09 per month) and income tax of up to 27.5%. These are withheld from gross salary, not paid on top. Toku calculates and remits all of the above.

Compensation & Payroll

Toku runs two payrolls per month in Brazil, and employees receive a detailed payslip each cycle. Salaries are paid in BRL.

The federal minimum wage for 2026 is BRL 1,621 per month; some states set higher minimums.

The mandatory 13th salary is paid in two installments: the first between February and November, and the second by December 20. When employees take vacation, they also receive a bonus equal to one-third of a month's salary, a constitutional right for all employees.

Employment Contracts & Probation

• Toku issues a compliant local employment agreement for every hire and registers the employment digitally with the authorities, as Brazilian law requires.
• Indefinite-term employment is the default. Fixed-term contracts are only allowed in specific circumstances, may not exceed two years, and can be renewed only once.
• Part-time employment is recognized, capped at 30 hours per week.
• Probation is 45 days, renewable once for another 45 days (90 days maximum), per Toku's employment agreement. During probation, either party may end the relationship without notice or severance penalty.

Working Hours

The standard limit is 8 hours per day and 44 hours per week, and many teams work a 40-hour, five-day week. Overtime is capped at 2 hours per day and paid at 150% of the regular wage on weekdays and 200% on weekends and holidays. Night work (10 PM to 5 AM) carries a 20% premium.

Employees must get a break of at least 60 minutes on shifts over six hours and 11 consecutive hours of rest between shifts. Overtime is generally paid in cash unless a formal time bank has been set up.

Leave Entitlements

Vacation can be split into up to three periods (one of at least 14 consecutive days), and employees may sell up to 10 days back to the employer. Vacation must be granted within 12 months of accrual or it becomes payable at double the rate, so plan leave proactively. From 2027, statutory paternity leave will gradually extend to 20 days by 2029.

Public Holidays (2026)

Brazil has 12 national public holidays in 2026, plus state and municipal holidays that vary by location. Carnival and Corpus Christi are technically optional at the federal level but are observed nearly everywhere.

Benefits

Public healthcare in Brazil is provided by SUS, the national public health system, which covers all residents; private health insurance is legally optional and supplemental. Social security coverage and the FGTS severance savings fund are statutory and included in Employer Costs above. Beyond these, many employee benefits in Brazil are driven by collective bargaining agreements (CBAs), which vary by industry and region and can mandate benefits such as life insurance, meal or food vouchers, and occupational health assessments. Benefits are administered directly through Toku's local payroll partner, who ensures compliance with the CBA that applies to each employee.

Benefits at a Glance

Statutory and CBA Benefits

• Transportation vouchers: employers must provide vouchers to cover commuting costs. Up to 6% of base salary can be deducted from the employee to offset this.
• Meal or food vouchers: not required by federal law, but many collective agreements require them.
• Pre-employment medical exam: required under occupational safety rules (Normas Regulamentadoras) and CBA requirements. The local partner coordinates the exam directly with the employee, and the employee can't begin work until the exam certificate (ASO) has been issued.

What Toku Provides

• Life insurance (Seguro de Vida): while not universally mandated by federal law, many sectors require it via CBAs. All employees are enrolled automatically through Toku's local payroll partner to ensure compliance with local standards, with no action needed from you or the employee.
• Health coverage: Toku offers fully sponsored international health coverage through Remote Health by SafetyWing. See 🌍 Global Coverage: Remote Health by SafetyWing for coverage, costs and enrollment.
• Supplemental private health insurance: Toku can also provide local supplemental health coverage depending on the role and compensation package. Contact [email protected] to scope a plan and pricing for your Brazil hires.

Costs & Who Pays

Exact benefit requirements and costs depend on the CBA applicable to your employee's industry and region. Because coverage is arranged per hire through the local partner, ask [email protected] for a quote when planning a Brazil hire.

What You Need to Know About Benefits

• Check which collective bargaining agreement applies to your employee's role and region early, as it can add mandatory benefits and costs.
• Budget for the pre-employment medical exam in your onboarding timeline; your new hire can't start until it's completed.
• Life insurance enrollment is automatic through the local partner; you and the employee don't need to do anything.
• Group health insurance is widely expected by Brazilian employees even though it isn't legally required. For the full employee-facing detail of Remote Health, see Remote Health, Your Global Insurance Plan for coverage details and enrollment.

Common Extras

Common extras in Brazil include group health insurance (widely expected by employees and often required by collective agreements), dental and life insurance, meal or food vouchers, private pension plans, and profit-sharing (which has favorable tax treatment). Toku can advise on the cost impact of any of these.

Ending Employment

Brazil provides strong protections against dismissal, and termination costs are among the highest globally. Termination without cause is permitted but triggers significant payouts, and protected categories (including pregnant employees and those recovering from work accidents) cannot be dismissed. Involve Toku early so we can manage the process compliantly. For the process, see How to Terminate an Employee or Contractor.

For termination without cause, expect to pay outstanding salary and benefits, the proportional 13th salary, accrued vacation plus the one-third bonus, notice (worked or paid in lieu), and a penalty equal to 40% of the employee's accumulated FGTS balance. A mutual agreement termination route is also available with a reduced 20% FGTS penalty. Toku will calculate the full exit cost for you before anything is signed.

Annual Leave at Termination

This section describes statutory annual leave. Any additional contractual or company-provided leave above the statutory minimum may follow different carryover, expiry, or payout rules under the employee's agreement or applicable policy, subject to local law.

Statutory leave termination payout: Required and potentially high-cost. Acquired and proportional vacation is generally included in the termination settlement, together with the statutory one-third vacation premium.

Statutory carryover / look-back: Brazil uses a 12-month accrual period followed by a statutory period in which the employer must grant the vacation. If vacation becomes overdue, the financial exposure can increase significantly.

Admin responsibility: Track each employee's accrual and vacation-granting periods separately and schedule leave before it becomes overdue. Do not allow acquired vacation to accumulate without review.

Important exceptions: Termination type can affect the broader final settlement, but overdue statutory vacation cannot be solved through a forfeiture policy. Toku should calculate the full vacation and termination exposure before amounts are communicated.

See the Annual Leave / PTO Carryover & Termination Payout Guide for the cross-country framework.

Hiring Someone from Overseas?

Foreign nationals need a work visa, which requires prior authorization from the Ministry of Labor before the candidate can apply; processing takes roughly 4-12 weeks. Nationals of Mercosur member and associated states benefit from simplified work authorization. Talk to Toku before extending an offer to a candidate who needs sponsorship.

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Last updated November 5, 2026 (onboarding link only). Last verified October 2026. This guide is for general information and doesn't constitute legal or tax advice. Your Toku account manager can confirm specifics for your situation.