Employer of record in Brazil: the real cost in 2026

EOR, own company or contractor?

There are three ways to work with someone in Brazil. Each one fits a different case.

Employer of record

The EOR employs the person for you and runs the payroll. You need no Brazilian company. But the rules on outsourcing limit this model (see the next section).Lei 6.019/1974, temporary work and outsourcingChecked 2 Oct 2026

Your own Brazilian company

A limited company (Ltda) can have one member. A foreign company that is a member needs a Brazilian tax number (CNPJ) and a representative who lives in Brazil. The managers can live abroad, with a representative in Brazil. The company reports the foreign investment to the Central Bank. A foreign company needs a federal authorisation to operate in Brazil through a branch.Civil Code, articles 1.052 and 1.134, DREI, manual for limited companies (PDF), Banco Central, Resolução BCB 278/2022Checked 2 Oct 2026

Contractor (PJ)

An employee is a person who works for an employer in a regular way, under its direction and for a salary. Direction through digital tools counts too. A contract that hides an employment is void. The Supreme Court has not yet decided its case on contracts with a person's own company (Tema 1389).Consolidation of Labour Laws (CLT), TRT-4, the Supreme Court case on PJ contracts (Tema 1389), 19 Jun 2026Checked 2 Oct 2026

Temporary work and outsourcing rules

An EOR is the legal employer, but the person works under your direction. Brazilian law allows this in two forms only, and each one has limits.

Temporary work

A temporary work company must register with the Ministry of Labour and have a capital of at least R$100,000. The client directs the work. But the law allows it only to replace permanent staff for a time, or for extra demand, and for at most 180 days plus 90 more.Lei 6.019/1974, temporary work and outsourcing, Decreto 10.854/2021, labour rules, gov.br, registration of a temporary work companyChecked 2 Oct 2026

Outsourcing (terceirização)

A company can outsource any activity, including its main activity. But the service company hires, pays and directs the work of its own workers. The client has a secondary liability for their pay.Lei 6.019/1974, temporary work and outsourcing, TRT-6, the Supreme Court thesis on outsourcing (Tema 725)Checked 2 Oct 2026

The court rule

The Superior Labour Court says that hiring workers through another company is illegal, except for temporary work. The employment link then forms with the client. There is no link with the client only when the client does not direct the worker in person.TST, Súmula 331 (LexML)Checked 2 Oct 2026

Employers of record

No official Brazilian source names employers of record. In a usual EOR service, you direct the work of the person for an open-ended period. That fits neither form above, so a court can find that the person is your employee.Lei 6.019/1974, temporary work and outsourcing, TST, Súmula 331 (LexML)Checked 2 Oct 2026

Ask each provider these questions before you sign:

• Under which law do you place the employee with us: temporary work or outsourcing?
• Who directs the daily work, and what does the contract say about it?
• Who pays if a court finds an employment link with us?

These rules are complex. Ask a Brazilian labour lawyer how they apply to your case.

Employment rules

Minimum wage

R$1,621 a month from 1 January 2026, or R$54.04 a day. A collective agreement or a state law can set a higher floor. The 2027 budget bill forecasts R$1,741 a month.Decreto 12.797/2025, the 2026 minimum wage, Agência Câmara, the 2027 budget bill, R$1,741 minimum wageChecked 2 Oct 2026

Working hours

At most 8 hours a day and 44 hours a week. Overtime pays at least 50% more, with at most 2 extra hours a day. A bill to end the 6-day week (the 6x1 schedule) is in the Senate, but it is not law.Constitution of Brazil, article 7, Consolidation of Labour Laws (CLT), Agência Brasil, the 6x1 schedule bill in the Senate, 2 Sep 2026Checked 2 Oct 2026

Vacation

30 days of paid vacation after each 12 months of work, with a bonus of at least 1/3 of the salary. The employer pays it at least 2 days before the vacation starts. The employee can split it into up to 3 periods.Constitution of Brazil, article 7, Consolidation of Labour Laws (CLT)Checked 2 Oct 2026

13th salary

1/12 of the December pay for each month of service. The employer pays half between February and November, and the rest by 20 December.Lei 4.090/1962, the 13th salary, Lei 4.749/1965, payment of the 13th salaryChecked 2 Oct 2026

Notice

30 days for up to 1 year of service, plus 3 days for each more year, up to 90 days. The employee gives 30 days. During the notice from the employer, the employee works 2 hours less each day, or takes 7 days off.Lei 12.506/2011, proportional notice, Consolidation of Labour Laws (CLT)Checked 2 Oct 2026

Dismissal without cause

The employer pays the notice, the vacation and the 13th salary that the employee has earned, and a penalty of 40% of all the FGTS deposits. It pays within 10 days. A dismissal by agreement halves the notice pay and the penalty.Consolidation of Labour Laws (CLT), Lei 8.036/1990, articles 15 and 18Checked 2 Oct 2026

Probation

A trial contract (contrato de experiência) can last up to 90 days, with one extension inside that limit.Consolidation of Labour Laws (CLT)Checked 2 Oct 2026

Maternity and paternity leave

120 days of maternity leave. The employer pays the salary and deducts it from its contributions. The job is protected from the confirmation of the pregnancy until 5 months after the birth. 5 days of paternity leave in 2026, and 10 days from 1 January 2027. Companies in the Empresa Cidadã programme add 60 days and 15 days.Consolidation of Labour Laws (CLT), Lei 8.213/1991, article 72, Lei 11.770/2008, Empresa Cidadã, Lei 15.371/2026, paternity leaveChecked 2 Oct 2026

Public holidays

The federal list for 2026 has 10 national holidays. States and cities add their own.Portaria MGI 11.460/2025, holidays for 2026 (DOU)Checked 2 Oct 2026

Transport voucher

If the employee asks for it, the employer pays the cost of the commute above 6% of the base salary. The voucher is not salary, so no contributions apply to it.Lei 7.418/1985, the transport voucher, Decreto 10.854/2021, labour rulesChecked 2 Oct 2026

Payroll and taxes

The employer, or the EOR, reports each new employee in eSocial before the first day of work, and the monthly payroll by the 15th of the next month. It pays the social security contributions and the FGTS by the 20th of the next month, and the contributions on the 13th salary by 20 December. It withholds income tax (IRRF) and pays it by the end of the second 10-day period of the next month.

The employer pays INSS of 20%, work accident insurance (RAT) of 1% to 3% by its main activity, contributions to third parties of 5.8%, and FGTS of 8%, on all pay. The RAT rate goes up or down with a factor (FAP) of 0.5 to 2. For the supply of human resources to third parties, the RAT is 2%, so the total is 35.8%.

The employee pays INSS of 7.5% to 14%, on pay up to R$8,475.55 a month. Income tax applies from R$2,428.81 a month, at rates up to 27.5%. In 2026, a new reduction removes the tax on pay up to R$5,000 a month.

Some IT companies can pay part of their contribution on their revenue until 2027. The supply of human resources to third parties is not on that list.

Sources: eSocial, guidance manual S-1.3 (PDF), gov.br, the FGTS Digital payment guide, gov.br, DCTFWeb, Lei 11.196/2005, article 70, Lei 8.212/1991, articles 22 and 28, Decreto 3.048/1999, articles 202 and 202-A, Decreto 3.048/1999, Annex V (RAT by activity), IN RFB 2.110/2022, Annex III (FPAS 515), Portaria Interministerial MPS/MF 13/2026, the 2026 INSS table (DOU), Receita Federal, the 2026 income tax tables, Lei 14.973/2024, the end of the payroll tax reliefChecked 2 Oct 2026

Payroll in Brazil: an EOR or a local payroll company?

A local payroll company calculates the pay, the tax and the contributions, and it files the returns. It does not employ the person. Your company stays the legal employer, with all the duties of an employer under Brazilian law.

Registration

eSocial identifies an employer that is a company only by its CNPJ, the tax number of a company in Brazil.eSocial, guidance manual S-1.3 (PDF)Checked 2 Oct 2026

A foreign company

A foreign company cannot operate in Brazil, even through a branch, without a federal authorisation. It also needs a permanent representative in Brazil.Civil Code, articles 1.052 and 1.134Checked 2 Oct 2026

We found no official route for a foreign company without a Brazilian entity to register as an employer. A payroll company can run the payroll of a company that already has a CNPJ. Without one, the choice is an EOR or your own Brazilian company. Ask a tax adviser if an employee in Brazil creates a taxable presence for your company.

Sources: eSocial, guidance manual S-1.3 (PDF), Civil Code, articles 1.052 and 1.134Checked 2 Oct 2026

Benefits

The law requires the INSS and FGTS contributions, the 13th salary, 30 days of vacation with the bonus of 1/3, and the transport voucher if the employee asks for it.

No federal law requires meal vouchers. Companies can join the workers' meal programme (PAT) for a tax benefit. Collective agreements often require meal vouchers and other benefits. Ask your provider which agreement applies.

Sources: Lei 8.212/1991, articles 22 and 28, Lei 8.036/1990, articles 15 and 18, Lei 4.090/1962, the 13th salary, Constitution of Brazil, article 7, Lei 7.418/1985, the transport voucher, Lei 6.321/1976, the workers' meal programme (PAT), Decreto 10.854/2021, labour rulesChecked 2 Oct 2026

How hiring through an EOR works

1. Compare providers and ask for quotesAsk for the monthly fee in Brazil, the deposit or the severance accrual, the exchange rate and the notice period of the EOR contract. Ask how the provider deals with the outsourcing rules.
2. Agree the employment termsAgree the monthly salary, the start date and the trial period with the candidate. The salary must meet the minimum wage and any floor of the collective agreement.
3. The EOR signs the contractThe EOR becomes the legal employer. It reports the employee in eSocial before the first day of work.
4. The EOR runs the payrollEach month, the EOR pays the salary and takes out the employee's INSS and income tax. It pays the contributions and the FGTS. It pays the 13th salary by 20 December and the vacation bonus before each vacation.
5. You manage the daily workYou set the tasks and the goals. The EOR handles the employment administration.

Sources: eSocial, guidance manual S-1.3 (PDF), gov.br, the FGTS Digital payment guide, Lei 4.749/1965, payment of the 13th salaryChecked 2 Oct 2026