How does the 13th salary work in Brazil?

Every employee earns a 13th salary equal to one month's pay. Employers pay it in two installments: the first by 30 November and the second by 20 December. Social security and income tax are withheld from the second installment, and new hires receive a pro-rated amount.

What does it cost to dismiss an employee in Brazil?

Without cause, you pay a penalty equal to 40% of the employee's FGTS balance, plus notice of 30 days plus 3 days per year of service, up to 90. Accrued vacation, the one-third vacation bonus, and the proportional 13th salary are also due.

How does Good Balance Global hire employees in Brazil?

As your Employer of Record (EOR), we hire your team under a Consolidation of Labor Laws (CLT) contract, register them in eSocial, and pay INSS, FGTS, and IRRF each month. You direct the work, and we handle payroll, benefits, and compliance with collective agreements.

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Payroll and benefits guide

Brazil

CapitalBrasília

Fiscal Year1 January - 31 December

Date Formatdd/mm/yyyy

CurrencyBRL (Brazilian Real)

Payroll FrequencyMonthly

Employer Taxes34.8% – 36.8%

Employee Costs7.5% – 14%

Overview

Languages: Portuguese
Income tax: 0% – 27.5%
VAT: No single rate; Brazil has no single VAT. ICMS (state, often 17%–23%), ISS (municipal, 2%–5%), and PIS/COFINS apply, and the new CBS and IBS taxes are being phased in from 2026

Contributions

Employer

20%

Social security (INSS)No cap; 22.5% for financial institutions

1% – 3%

Work accident insurance (RAT)Set by activity risk and adjusted by the company's accident factor (FAP)

About 5.8%

Third-party contributionsEducation allowance and the S System; varies by activity

Severance fund (FGTS)Deposited monthly into the employee's FGTS account

34.8% – 36.8%

Total employer costTypical range before the FAP adjustment

Employee

7.5% – 14%

Social security (INSS)Progressive brackets; contribution base capped at BRL 8,475.55/month (2026)

7.5% – 14%

Total employee cost

Authority Payments

Authority PaymentPaid ToDue DateMethod

Authority Payment

Receita Federal

Paid To

Employer and employee INSS, third-party contributions, and income tax withheld (IRRF)

Due Date

By the 20th of the following month

Method

eSocial and DCTFWeb filings with DARF payment

Authority Payment

Caixa Econômica Federal

Paid To

FGTS deposits

Due Date

By the 20th of the following month

Method

FGTS Digital platform

Minimum Wage & Working Hours

Minimum wage: BRL 1,621 / Monthly; Effective 1 January 2026 (Decree 12,797/2025); some states and collective agreements set higher floors
Standard working hours: 8 hours per day, 44 hours per week
Overtime: At least a 50% premium; 100% on Sundays and public holidays. Generally capped at 2 hours per day

Leave

Annual leave30 calendar daysAfter 12 months of service, paid with an extra one-third vacation bonus. Can be split into up to 3 periods
Sick leaveAs medically certifiedThe employer pays the first 15 days; INSS pays a benefit from day 16
Maternity leave120 daysPaid at full salary by the employer and offset against INSS contributions. 180 days at companies in the Empresa Cidadã program
Paternity leave5 days20 days at companies in the Empresa Cidadã program. A law signed on 31 March 2026 raises statutory leave to 10 days in 2027, 15 in 2028, and 20 in 2029, paid by INSS as paternity pay (salário-paternidade)
Public holidays10 national holidaysIncludes Good Friday and Black Consciousness Day (20 November). States add their own holiday, and municipalities can declare up to 4 religious holidays. Carnival is an optional day off (ponto facultativo) at the federal level

Leave type	Duration	Notes
Annual leave	30 calendar days	After 12 months of service, paid with an extra one-third vacation bonus. Can be split into up to 3 periods
Sick leave	As medically certified	The employer pays the first 15 days; INSS pays a benefit from day 16
Maternity leave	120 days	Paid at full salary by the employer and offset against INSS contributions. 180 days at companies in the Empresa Cidadã program
Paternity leave	5 days	20 days at companies in the Empresa Cidadã program. A law signed on 31 March 2026 raises statutory leave to 10 days in 2027, 15 in 2028, and 20 in 2029, paid by INSS as paternity pay (salário-paternidade)
Public holidays	10 national holidays	Includes Good Friday and Black Consciousness Day (20 November). States add their own holiday, and municipalities can declare up to 4 religious holidays. Carnival is an optional day off (ponto facultativo) at the federal level

Termination

Probation period: Up to 90 days
Notice period: 30 days, plus 3 days per year of service, up to 90 days
Severance pay: Dismissal without cause requires a penalty of 40% of the FGTS balance, plus accrued vacation, the vacation bonus, and the proportional 13th salary
13th salary: Mandatory: one month's salary, paid in two installments by 30 November and 20 December
Notes: Notice can be worked or paid in lieu

Benefits

Transportation voucher (vale-transporte)Mandatory
Covers commuting costs; the employee contributes up to 6% of base salary
Meal or food allowanceCommon
Very common and often required by collective agreements
Private health insuranceCommon
Expected for most professional roles

Visas & Work Permits

Temporary work visa with residence authorization
Requirements
Job offer from a Brazilian employer and approval from the Ministry of Justice
The local employer usually sponsors the application
Digital nomad visa
Duration
Up to 1 year, renewable
Requirements
Remote work for a foreign employer with proof of income
Does not allow work for a Brazilian employer

FAQ

Sources

Last updated: November 1, 2026

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