Brazil is Latin America’s largest economy and one of the most influential emerging markets worldwide. With a GDP of ~USD 2.1 trillion (2025), it is a leader in agribusiness, energy, aviation, finance, and technology. Brazil also has a thriving startup and fintech ecosystem, led by São Paulo, which is home to some of the region’s most valuable unicorns.

The country’s workforce is diverse, young, and highly skilled, offering expertise across engineering, finance, IT, and industrial sectors. However, employers face significant compliance hurdles under the Consolidação das Leis do Trabalho (CLT) labor code, one of the most protective labor regimes in the world. Payroll requires managing multiple taxes and contributions, while severance and benefit obligations add to employment costs.

Gloroots makes hiring in Brazil seamless by acting as your Employer of Record (EOR). With Gloroots, you can enter the market in days instead of months, remain compliant with CLT obligations, and focus on building your team while we manage contracts, payroll, and benefits.

What are the key facts about Brazil’s economy and workforce?

Economic Highlights

• GDP: ~USD 2.1 trillion (2025).
• Major Industries: Energy & Mining (Petrobras, Vale), Agribusiness (sugar, coffee, soy), Aerospace (Embraer), Finance (Itaú, Bradesco, Nubank), Technology & Fintech (São Paulo).
• Trade & Integration: Brazil is a top exporter of soybeans, iron ore, crude oil, and manufactured goods.
• Startup Ecosystem: São Paulo is Latin America’s largest startup hub with fintech, logistics, and e-commerce unicorns.

Workforce Characteristics

• Size: ~100 million employed individuals.
• Median Age: ~34 years.
• Education: Strong graduate output from USP, Unicamp, and FGV, with growing STEM emphasis.
• Languages: Portuguese (official), English moderate but improving in IT and finance sectors.
• Talent Hubs: São Paulo (finance, IT, startups), Rio de Janeiro (energy, media), Brasília (government, services), Porto Alegre & Campinas (engineering, R&D).

What is the work culture and talent pool like in Brazil?

Brazilian workplaces are often hierarchical yet collaborative, with personal relationships and trust playing a key role in business. While respect for authority is expected, younger professionals seek flexibility, merit-based recognition, and opportunities in global-facing industries.

White-Collar Talent Strengths

• Finance & Banking: São Paulo is a global financial hub.
• Technology & Startups: Rapidly growing developer and fintech talent pool.
• Engineering & Manufacturing: Aerospace, automotive, and heavy industries.
• Energy: Oil, gas, and renewable energy professionals.

Workforce Snapshot – Brazil

Work Visas in Brazil: How Gloroots Helps

Main Types of Work Visas

1. Temporary Work Visa (VITEM-V) – For foreign employees sponsored by a Brazilian company; valid up to 2 years, renewable.
2. Permanent Work Visa – For executives, directors, and specialized professionals.
3. Intra-Company Transfer Visa – For multinational employees relocating to a Brazilian subsidiary.
4. Investor Visa – For individuals making qualifying investments in Brazil.

Employer Challenges

• Only Brazilian entities can sponsor work visas.
• Sponsorship requires Ministry of Justice and Public Security approval.
• Processing may take 1–3 months, delaying hiring.

How Gloroots Helps

• Acts as the legal employer to sponsor foreign employees.
• Prepares contracts in compliance with CLT for visa applications.
• Manages visa filings and renewals with Brazilian authorities.
• Ensures employees are work-ready without entity setup delays.

Q: What is the process of setting up an entity in Brazil?

Direct Entity Setup

• Common forms: Limitada (Ltda.) or Sociedade Anônima (S.A.).
• Requires a local legal representative.
• Must register with:
  • Commercial Registry.
  • CNPJ (Corporate Tax ID) with Receita Federal.
  • INSS (Social Security).
  • FGTS (Severance Guarantee Fund).
• Timeline: 2–3 months or longer.
• Ongoing Compliance: Monthly payroll filings, CLT benefits administration, complex tax reporting.

Using Gloroots EOR

• Hire in 2–5 days without incorporation.
• Payroll, taxes, and benefits managed end-to-end.
• Full compliance with CLT while avoiding setup costs.

Direct Entity vs. Gloroots

Q: What are the key employment laws in Brazil?

Brazil’s employment framework is governed by the Consolidação das Leis do Trabalho (CLT). It is one of the most protective labor codes globally, setting strict rules on contracts, working hours, overtime, leave, and severance.

Key Employment Regulations

• Employment Contracts
  • Must be in writing, in Portuguese.
  • Standard contracts are indefinite; fixed-term contracts limited to 2 years.
  • Probation: up to 90 days.
• Working Hours
  • Standard: 44 hours per week (8 hours/day, Mon–Fri, 4 hours Sat).
• Overtime
  • 150% pay on weekdays, 200% on Sundays/holidays.
• Minimum Wage (2025)
  • ~BRL 1,510/month (regional variations apply).
• Annual Leave
  • 30 days after 12 months’ service, plus vacation bonus of 1/3 salary.
• Public Holidays
  • 12+ national holidays; states/cities may declare additional ones.
• Sick Leave
  • Employer pays first 15 days.
  • After that, INSS covers sickness benefits.
• Maternity Leave
  • 120 days paid (extendable to 180 days for companies in “Empresa Cidadã” program).
• Paternity Leave
  • 5 days paid (extendable to 20 days under Empresa Cidadã).
• Severance (FGTS)
  • Employer contributes 8% monthly salary into FGTS account.
  • Termination without cause: employee receives balance + 40% penalty paid by employer.

Employment Law Snapshot – Direct Employer vs. Gloroots

<table><tr><th></th><th>Direct Employer</th><th>Gloroots (EOR)</th></tr><tr><td>Employment Contracts</td><td>Drafted in Portuguese; employer ensures CLT compliance</td><td>Gloroots provides compliant bilingual contracts</td></tr><tr><td>Working Hours</td><td>Employer tracks hours and overtime manually</td><td>Gloroots automates time & overtime compliance</td></tr><tr><td>Leave & Benefits</td><td>Employer administers annual leave, maternity/paternity rules</td><td>Gloroots manages leave and benefit compliance</td></tr><tr><td>Severance (FGTS)</td><td>Employer funds FGTS monthly + 40% penalty on dismissal</td><td>Gloroots ensures accurate FGTS contributions & severance payouts</td></tr><tr><td>Litigation Risk</td><td>High – labor courts favor employees</td><td>Low – Gloroots ensures compliant processes</td></tr></table>

Q: What are the risks of misclassification in Brazil?

Misclassification is a common risk in Brazil, where companies engage workers as “contractors” to avoid CLT obligations. However, if the working relationship reflects employment (fixed hours, supervision, salary-like payments), courts can reclassify contractors as employees.

Reclassification triggers severe financial penalties, including back pay of benefits, FGTS contributions, and social security taxes.

Criteria for Employment vs Contractor

A worker is considered an employee if:

• They work under employer direction and schedule.
• They are integrated into company operations.
• They receive regular fixed payments.
• They cannot subcontract or delegate work.

A genuine contractor should:

• Work independently with business risk.
• Use their own tools.
• Invoice multiple clients.
• Pay their own taxes/social contributions.

Penalties for Misclassification

• Retroactive INSS contributions (20% employer, 8–11% employee).
• FGTS contributions + 40% penalty.
• 13th-month salary back pay.
• Vacation + 1/3 bonus back pay.
• Fines from labor inspectors.
• Risk of reinstatement lawsuits.

Misclassification: Direct Contractor vs. Gloroots

Check your risk with our Misclassification Calculator.

Q: How does an EOR help you run payroll in Brazil?

Payroll in Brazil is one of the most complex in the world. Employers must manage multiple mandatory contributions, monthly filings via eSocial, and strict timelines. Mistakes can lead to audits, fines, and disputes before labor courts.

Gloroots ensures accurate, timely, and compliant payroll processing for employees in Brazil.

Payroll Compliance Requirements

• Payroll Cycle: Monthly (by the 5th business day).
• Payslips: Must detail salary, deductions, and employer contributions.
• Mandatory Contributions:
  • INSS: 20% employer, 8–11% employee.
  • FGTS: 8% employer.
  • RAT (Work Accident Insurance): 1–3%.
  • Third-party contributions: ~5.8%.
• Mandatory Benefits:
  • 13th-month salary.
  • Vacation + 1/3 bonus.
  • Profit-sharing (PLR) if in CBAs.

How Gloroots Simplifies Payroll

• Automates gross-to-net salary calculations.
• Deducts and remits INSS, FGTS, RAT, and other contributions.
• Prepares compliant payslips in Portuguese.
• Files monthly reports via eSocial.
• Ensures timely payment of 13th salary and vacation bonus.

Payroll: Direct Employer vs. Gloroots

Q: How does tax compliance work in Brazil?

Brazil has a complex tax system with high employer contributions and multiple layers of regulation. Employers must withhold employee income tax, remit employer social contributions, and comply with strict reporting under Receita Federal and eSocial.

Gloroots ensures all tax obligations are met, reducing the risk of fines and disputes.

Employee Taxation

• Income Tax (IRRF): Progressive rates:
  • Up to BRL 2,112 → 0%
  • BRL 2,113–2,826 → 7.5%
  • BRL 2,827–3,751 → 15%
  • BRL 3,752–4,664 → 22.5%
  • Above BRL 4,664 → 27.5%
• Employee Contributions:
  • INSS: 8–11% of salary.

Employer Contributions

• INSS: 20% of payroll.
• FGTS: 8% of payroll.
• RAT: 1–3% depending on risk level.
• Third-party contributions: ~5.8%.
• Total employer burden: ~28–30% of payroll.

Tax Compliance: Direct Employer vs. Gloroots

Q: What benefits and entitlements do employees in Brazil receive?

Brazil’s CLT labor code guarantees some of the most comprehensive benefits globally. These include the 13th-month salary, paid vacation with bonus, and severance contributions (FGTS). Employers often add private health insurance, meal allowances, and transport stipends to remain competitive.

Gloroots ensures all statutory entitlements are covered while helping you design attractive benefit packages that meet market expectations.

Statutory Benefits

• 13th-Month Salary: Mandatory, paid in two installments (Nov & Dec).
• Annual Leave: 30 days after 12 months’ service, plus 1/3 salary bonus.
• Vacation Bonus: 33% of monthly salary.
• Public Holidays: 12+ national holidays (state/city holidays may add more).
• FGTS Severance Fund: 8% of salary monthly + 40% penalty on dismissal.
• Sick Leave: First 15 days paid by employer; thereafter INSS covers.
• Maternity Leave: 120 days paid (extendable to 180 days under Empresa Cidadã).
• Paternity Leave: 5 days paid (extendable to 20 days under Empresa Cidadã).

Common Supplemental Benefits

• Private health & dental insurance.
• Meal and transport vouchers.
• Life insurance.
• Gym and wellness stipends.
• Performance bonuses and PLR (profit-sharing).

Benefits: Direct Employer vs. Gloroots

Q: What’s involved in hiring and onboarding employees in Brazil?

Hiring in Brazil requires Portuguese employment contracts, payroll registration, and enrollment in INSS and FGTS. Employers must comply with labor law, union agreements, and onboarding documentation rules.

Gloroots ensures new hires are onboarded quickly and compliantly, managing everything from contracts to payroll setup.

Key Steps in Hiring & Onboarding

1. Employment Contract
   • Must be in Portuguese, compliant with CLT.
   • Should include role, salary, benefits, and termination terms.
2. Probation Period
   • Up to 90 days, renewable once.
3. Social Security Registration
   • Employees must be registered with INSS and FGTS.
4. Payroll Setup
   • Employees added to employer’s CNPJ and eSocial reporting.
5. Onboarding Compliance
   • Health & safety orientation.
   • Delivery of required equipment (laptops, access).
   • Union registration (if applicable).

Hiring & Onboarding: Direct Employer vs. Gloroots

Q: How do you successfully manage a workforce in Brazil?

Summary Info Section

Managing employees in Brazil requires balancing strict compliance with CLT and adapting to a relationship-driven workplace culture. Employees expect strong benefits, regular communication, and professional development opportunities. Unions are influential, and employers must comply with collective bargaining agreements (CBAs).

Gloroots helps global employers by combining compliance management with cultural expertise, ensuring high retention and engagement.

Key Considerations

• Compliance: Track overtime, benefits, and payroll contributions closely.
• Workplace Culture: Personal relationships, collaboration, and recognition are important.
• Benefits & Retention: Employees expect supplemental benefits like health insurance.
• Performance Management: Regular reviews and career growth opportunities matter.
• Union Involvement: Active in many sectors; CBAs may add to CLT requirements.

How Gloroots Supports Workforce Management

• Manages payroll, leave, FGTS, and INSS compliance.
• Provides HR guidance aligned with Brazilian norms.
• Helps design market-competitive benefits.
• Acts as your local HR partner, supporting employee relations.

Q: What are the key steps and requirements in terminating employees in Brazil?

Summary Info Section

Termination in Brazil is highly regulated. Unless for just cause, employees are entitled to significant severance benefits under CLT and FGTS rules. Mishandling terminations can result in lawsuits, as labor courts strongly favor employees.

Gloroots ensures all exits are managed legally, fairly, and with proper documentation.

Termination Rules

• Grounds
  • Just cause (misconduct, dishonesty).
  • Without cause (employer discretion, but severance applies).
• Notice Period
  • 30 days, plus 3 days per year of service (max. 90 days).
• Severance Pay
  • FGTS balance + 40% employer penalty.
  • Accrued 13th salary and vacation pay.
• Probation Termination
  • Easier process, but requires proportional payments.
• Final Settlement
  • Must be paid within 10 days of termination.

Termination: Direct Employer vs. Gloroots

Q: What is the offboarding process in Brazil?

Offboarding in Brazil must strictly follow the CLT and associated regulations. Employers are required to observe notice rules, calculate all final entitlements correctly (FGTS, 13th salary, accrued vacation + 1/3 bonus), file eSocial events on time, and deliver compliant documentation. Errors can trigger fines, labor claims, or reinstatement orders. Gloroots manages every step to ensure a compliant, respectful exit.

Key Steps in the Offboarding Process

1. Formal Termination Grounds & Documentation
   • Define just cause vs. without cause and document evidence.
2. Notice Period / Pay in Lieu
   • 30 days + 3 days per year of service (capped at 90); pay in lieu permitted.
3. Final Payroll Settlement (Finiquito/Rescisão)
   • Outstanding salary; proportional 13th salary; unused vacation + 1/3 bonus; overtime/allowances; applicable severance.
4. FGTS & Unemployment Eligibility
   • Deposit severance; pay 40% penalty on FGTS balance for terminations without cause; issue forms for unemployment where eligible.
5. eSocial and Government Notifications
   • File termination event; update INSS/FGTS systems.
6. Certificates & Records
   • Deliver termination receipt, payment proofs, and employment certificate upon request.
7. Assets & Access
   • Collect equipment, revoke access, ensure secure data return and handover.

How Gloroots Simplifies Offboarding

• Calculates all statutory payouts precisely and on time.
• Files eSocial termination events and manages INSS/FGTS workflows.
• Issues compliant receipts and documentation in Portuguese.
• Coordinates asset return and secure data offboarding.
• Minimizes disputes through clear communication and audit-ready records.

Offboarding: Direct Employer vs. Gloroots (EOR)

Q: What costs and financial planning do you need with an Employer of Record in Brazil?

Summary Info Section

Brazil’s total cost of employment (TCE) includes base salary plus significant statutory items—INSS, FGTS, RAT, third-party levies, 13th salary, vacation bonus, and potential PLR under CBAs. Accurate planning avoids year-end surprises and cash-flow strain at termination. Gloroots consolidates all expenses into a transparent monthly invoice and aligns budgeting with payroll best practices and global compliance.

Typical Cost Components (illustrative)

• Base salary (market-driven by city/role).
• Employer social charges:
  • INSS ≈ 20% of payroll
  • FGTS 8% of payroll (plus 40% penalty on dismissal without cause)
  • RAT 1–3% (industry risk)
  • Third-party contributions ≈ 5.8%
• Mandatory benefits: 13th salary (two instalments), vacation + 1/3 bonus.
• Optional/market benefits: private health & dental, meal/transport vouchers, life insurance, PLR.
• One-off events: severance on termination, accrued bonuses, equipment.

How Gloroots Optimizes Cost Planning

• Single monthly invoice covering salary, taxes, benefits, and fees.
• Proactive severance accruals and forecasting.
• Market-aligned benefits design to control spend without hurting attraction/retention (employee benefits guide).
• Clear view of EOR fees and statutory components (EOR pricing explainer).

Cost Planning: Direct Employer vs. Gloroots (EOR)

Q: What challenges might you face, and how do you solve them using an EOR in Brazil?

Summary Info Section

Brazil offers unmatched scale—but CLT complexity, layered payroll taxes, active unions, and strict terminations create operational risk. Non-compliance can lead to audits, fines, and litigation. Gloroots neutralizes these challenges by owning the employer-of-record liability, running compliant payroll, and guiding policy to local norms so you can scale confidently.

Key Challenges & Gloroots Solutions

Conclusion

Brazil is Latin America’s largest and most dynamic labor market, offering unmatched scale, talent diversity, and industry expertise across finance, energy, agribusiness, aerospace, and technology. But employers must navigate the complex CLT labor code, high payroll taxes, unionized environments, and strict termination rules.

With Gloroots as your Employer of Record in Brazil, you can:

• Hire employees in days instead of months.
• Stay fully compliant with CLT, INSS, and FGTS obligations.
• Offer both mandatory and supplemental benefits seamlessly.
• Simplify payroll, tax filings, and HR administration.
• Focus on scaling your Brazil operations while Gloroots manages compliance and workforce complexity.

Gloroots makes hiring in Brazil simple, compliant, and fast.

Hire employees in Brazil with Gloroots