Employment Law in Brazil

Contracts

In Brazil, employment contracts can be fixed-term (temporário) or permanent (CLT), governed by the Consolidation of Labor Laws (CLT). Permanent contracts must include benefits such as FGTS (severance fund), 13th salary, 30 days of paid annual leave, and health/safety insurance. Fixed-term employees gain equal rights after 90 days. 

Brazil’s apprenticeship contracts (Law No. 10.097/2000) require medium/large firms to hire apprentices (5–15% of their workforce). Employers must: 

• Register apprentices with the National Apprenticeship Service (SENAI/SENAC)
• Pay at least minimum wage
• Limit work to six hours daily (eight hours for technical training)

Termination and notice periods

In Brazil, federal labor laws require employers to provide written notice of termination or pay in lieu of notice, with a minimum of 30 days for employees, plus an additional three days per year of service, up to a maximum of 90 days. In most cases, terminated employees are entitled to a fair process, and just cause for dismissal includes the following: 

• Theft
• Insubordination
• Habitual negligence of duty
• Lack of capability
• Prolonged illness
• Redundancy
• Serious misconduct 

Employees terminated without cause are entitled to severance pay, which includes a 40% fine on the total amount deposited in the employee’s FGTS (Fundo de Garantia do Tempo de Serviço) during the employment period, along with accrued vacation pay plus one-third, and a proportional 13th-month salary. There is no statutory gratuity payment in Brazil; however, additional compensation may be provided based on employment contracts or collective agreements. As your employer of record (EOR) in Brazil, we can assist you in managing employee terminations by providing legal guidance and a personalized process to ensure compliance with federal labor standards and minimize legal risks.

Probation periods

In Brazil, probationary periods are permitted for up to 90 days. This period can be divided into an initial term and one extension, provided the total duration does not exceed 90 days. If employment continues beyond this period without formal termination, the contract automatically converts into an indefinite-term contract.

Working hours and overtime

In Brazil, the standard workweek is typically Monday through Friday, with eight hours per day, totaling 44 hours per week. Employees are prohibited from working for more than eight hours a day without appropriate compensation.

Any work beyond eight hours a day is considered overtime, and employees are entitled to additional compensation of at least 50% over their regular hourly rate. For work performed on rest days or public holidays, the overtime pay rate is higher, as specified by the Consolidation of Labor Laws (CLT).

Taxes

In Brazil, withholding tax is known as Imposto de Renda Retido na Fonte (IRRF) and is deducted by employers before paying salaries to employees. Employers must deduct IRRF from employee salaries based on applicable income tax rates and submit it to the Federal Revenue Service.

Employer payroll contributions

Brazil’s social security system requires employer contributions that are dependent on the total number of employees, and these contributions cover pensions, medical care, disability insurance, and gratuity payments. In addition, workers’ compensation is financed by contributions from state governments, employers, and employees.