An EOR in Brazil employs your hire under the CLT, the consolidated labour law that governs almost all Brazilian employment, and carries one of the heavier statutory cost stacks in the Americas: employer social security at 20% of payroll with no ceiling, monthly FGTS severance-fund deposits of 8%, a mandatory 13th salary, and 30 days of paid vacation with a further one-third bonus on top. Employment in Brazil is document-heavy and litigious, which is exactly why the EOR model is popular there: the provider's local entity absorbs the compliance machinery. The figures below come from published Brazilian legal and payroll guides; contracts and current law control, and nothing here is legal advice.
What an EOR does in Brazil
A Brazilian EOR employs the worker under a CLT contract, registers the employment in the government's digital systems, and runs the monthly cycle: salary, the employer's INSS contribution of 20% of payroll plus workplace accident insurance of 1% to 3% depending on risk, and the FGTS deposit of 8% of gross salary into the employee's individual severance account under Lei 8.036/1990. CLT employment attaches when work is personal, regular, subordinate and paid, regardless of what a contract calls itself, which is why long-term contractor arrangements in Brazil are fragile and why converting contractors to CLT employment through an EOR is a common first use of the product there.
The pay calendar: 13th salary and vacation with a third
The 13th salary, established by Lei 4.090/1962, is one extra month of pay per year, normally paid in two instalments toward the end of the year, and accrues pro rata from the first month of service, so it is budgeted as an additional 8.33% of salary every month. Vacation is 30 calendar days after each 12 months of service, and the Federal Constitution adds a bonus of one-third of a month's pay when leave is taken. Together these mean a Brazilian salary understates annual base cost by well over a month of pay before any contributions, and a serious EOR quote accrues both items monthly on the invoice rather than presenting them as year-end surprises.
Termination: notice ladders and the 40% FGTS fine
Notice on employer-initiated termination starts at 30 days and grows by 3 days per year of service up to a maximum of 90 days under Lei 12.506/2011. Dismissal without just cause additionally triggers a fine of 40% of the employee's accumulated FGTS balance, paid by the employer on top of the balance the employee withdraws, which means exit cost grows automatically with tenure since the FGTS pot is fed at 8% of salary every month. An illustrative employer cost build-up for Brazil reaches roughly 1.4 times gross salary once INSS, FGTS, the 13th salary and the vacation bonus are added, before termination reserves. Ask any EOR how it accrues and invoices these termination exposures, because the difference between accrual and billing-at-exit lands on your cash flow at the hardest moment.
What to check in a Brazilian EOR provider
Confirm the provider employs through a Brazilian entity and files through the government's digital payroll systems, and ask for the cost build-up in writing: gross salary, INSS at 20% plus the accident-insurance rate for the role's risk class, FGTS at 8%, the 13th salary and vacation bonus accrued monthly, and the fee as separate lines. Ask how the provider handles Brazil's active labour courts: who defends a claim, who pays an award, and what the indemnities in the service agreement actually cover. Check the contract's working-time terms against the CLT and ask specifically about the notice ladder and the 40% FGTS fine in the offboarding process, since a provider that cannot walk through a termination cost calculation on request will not manage one well in practice.
Questions people ask about eor brazil
What does an employer pay on top of salary in Brazil?
The main statutory items are INSS at 20% of payroll with no ceiling, workplace accident insurance at 1% to 3%, FGTS deposits at 8% of gross salary, the 13th salary accruing at 8.33% monthly, and a one-third bonus on 30 days of annual vacation. Illustrative build-ups reach roughly 1.4 times gross salary.
What is the FGTS?
A government-managed severance fund: the employer deposits 8% of gross salary monthly into the employee's individual account under Lei 8.036/1990. On dismissal without just cause the employer also pays a fine of 40% of the accumulated balance, so exit cost grows with tenure.
What notice applies to dismissal in Brazil?
A baseline of 30 days plus 3 additional days per year of service, capped at 90 days, under Lei 12.506/2011. Notice can be worked or indemnified, and it stacks with the 40% FGTS fine and prorated 13th salary and vacation entitlements in the final settlement.
Can I engage Brazilians as contractors instead?
Only where the relationship is genuinely independent. CLT employment attaches on the facts, personal, regular, subordinate, paid work, whatever the contract says, and Brazil's labour courts hear reclassification claims routinely. Permanent directed roles belong in CLT employment, via your entity or an EOR.