🇧🇷 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 your new hire through the Toku platform and we take it from there: local employment agreement, statutory registrations, and payroll setup. See Onboard Contributors as a Client Admin in Toku for the step-by-step process, and the Country Readiness Live Tracker for lead times across all countries.

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: Required vs. Common Extras

Statutory (included in employer costs above): social security coverage and the FGTS severance savings fund. In addition, employers must provide transportation vouchers to cover commuting costs (up to 6% of base salary can be deducted from the employee to offset this), and many collective agreements require meal or food vouchers.

Toku offers fully sponsored international health coverage through Remote Health. See Remote Health, Your Global Insurance Plan for coverage details and enrollment.

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.

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 verified July 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.