How to Hire in Brazil

hire in brazil

Brazil has the eleventh-largest economy in the world, valued at around US$ 2.18 trillion because of its natural resources. Despite a recession in 2015 and 2016 that ranked as the worst in the country’s history, Brazil’s GDP grew by 1% in 2017 and inflation fell to an all-time low of 2.9%. Its potential and data indicate that it could become a top country for global business expansion. And for any business to grow, hiring employees in Brazil presents unique challenges and opportunities.

Companies expanding to Brazil must understand the country’s tax system and compliance requirements, which can be complex. The Brazilian government promotes foreign investment in scientific and technological infrastructure. Brazil’s moderate climate, excellent infrastructure, supportive government, and wealth of natural resources make it a highly favored destination for foreign investment.

How can businesses hire in Brazil?

Hiring employees in Brazil gives businesses access to skilled workers and a strategic location for expansion into the LATAM region. Brazil is the largest economy in Latin America. In 2021, 9.69% of Brazilian employees were active in the agricultural sector, 20.63% in industry, and 69.68% in the service sector.

Supported by a favourable external environment benefiting exports and a strong labor market, Brazil is one of the best countries for international expansion. Globally, Latin American tech is undergoing a transformation led by Brazil. As the nation’s remote workforce increases by 70%, it is becoming a major player in the outsourcing market. By 2025, substantial growth is expected.

The three options for employers planning to hire employees in Brazil are:

  • Independent contractors
  • Direct employees
  • Global Professional Employer Organization (PEO)

We’ll break down each option to help you make the best decisions for your business growth.

Independent Contractors

Hiring independent contractors in Brazil is a flexible way to expand. However, not following Brazil’s employment law can lead to misclassification and result in fines and legal issues. These include:

  • Contractors can work for several companies together and cannot be limited to working entirely for your business.
  • Contractors are liable for their working status and schedule—the business cannot determine specific hours of operation.
  • Contractors must be project-based, or they must work for shorter periods. If a contractor extends their time with a company, they run the risk of being classified as an employee.

Although it can seem straightforward at first, there are several challenges associated with hiring contractors abroad. The government considers it a misclassification if an employee does not meet the criteria listed above. If those conditions are violated, the employee can sue the company for benefits, overtime, and holiday pay during their employment duration.

Related: Independent contractors: Understanding the risk

If the agreement is not followed or clear, the government typically rules in favor of the contractor. In addition to these costs, the business may also face fines and penalties for the breach.

U.S. companies hiring in Brazil need international contractors to fill out the IRS Form W-8BEN. This certifies their foreign worker status in the U.S. government’s eyes. Although this step will resolve tax compliance for the employer in the U.S., the business will still need to abide by Brazilian labor law.

Hiring an independent contractor in Brazil can be a convenient strategy for employment if the above guidelines are met.

Related: 1099 for international contractors? Requirements for hiring and paying foreign workers

Direct Employees

If you plan to hire part-time or full-time employees in Brazil, you will need to establish a legal entity. Incorporation can be an expensive and time-consuming process and can take anywhere between 10 weeks and six months.

Legal entities are the foundation of all operations within a country. They can influence every feature of a business, including IT, accounting, finance, and other supply chain functions. If this is the direction your business decides to follow, it’s highly recommended that you partner with an expert in this process.  This ensures that the structure isn’t ineffective or costly to retain.

Related: Global employment classifications: Contractor vs. Employee vs. PEO

In general, there are three essential components to incorporating a business in Brazil:

  1. Incorporation and Registration
    • This includes arranging the right registration documents, corporate governance structure, tax ID, business licenses, and more.
  2. Post Incorporation
    • The work doesn’t stop once the legal entity is formed. After incorporation comes the banking, account setup, payroll setup, benefits registration, and more
  3. Corporate Annual Compliance
    • Finally, after all the setup is complete, the entity will need to be reviewed annually. This includes payroll, tax, and statutory returns, along with other essential fiscal statements.

Related: Incorporation Services in Brazil: How to Establish a Company

Outsource to a Global PEO/EOR Provider

If your company is looking to expand into Brazil without setting up a legal entity, outsourcing employment to a global Professional Employer Organization (PEO), also known as an Employer of Record (EOR), can be a great solution.

A PEO hires workers on your behalf and shoulders much of the administrative burden related to the HR function of a business. This reduces the potential risks and liabilities. With a PEO, the company retains control over its employees’ daily activities, freeing up time and resources for other tasks.

By leveraging an active network of legal entities, employers can depend on a PEO to ensure immediate hiring, employee benefits, payroll administration, and more, without forgoing compliance. Here are a few of the administrative services a PEO offers:

  • Fast international hiring
  • Payroll management
  • In-country compliance
  • Reduced risks with international contractors
  • Global talent acquisition
  • Best-in-class HR technology for the international workforce
  • Brazilan employment contracts

Related: Brazil employer of record

Employment Law in Brazil

Brazil’s Employment Contracts

Brazil’s employment law is governed by provisions of the 1988 federal constitution and the 1943 Consolidation of Labor Laws and its amendments. These laws cover many topics related to employment.

Under Brazilian law, employment contracts are required to be in writing only for professional athletes, professional artists, and apprentices. Otherwise, an employment relationship may be created by written contract, oral promise, or tacit agreement.

Working Hours

The normal working hours set by the federal constitution are eight per day and 44 per week.

Probation Period

Brazil has a 90-day probation period, and it may be renewed once upon requirement.

Minimum Wage

Effective January 1, 2024, the monthly minimum wage is 1,412 reals.


Employees get a year-end bonus referred to as a “13th month salary” or Christmas bonus equivalent to one month’s pay. The Christmas bonus is divided into two instalments:

  • The first is payable between February 1 and November 30
  • The second before December 20.

Typically, half the bonus is paid in November and the other half in December.

Holiday Entitlement

Per the Brazilian Labor Law, employees are entitled to up to 30 days of paid annual leave after 12 months of service.

In addition to the annual leave, employees receive eight paid public holidays:

  • New Year’s Day
  • Tiradentes
  • Labor Day
  • Independence Day
  • Our Lady of Aparecida Day
  • All Souls Day
  • Proclamation of the Republic Day
  • Christmas

Brazil also recognizes the following optional holidays and optional partial holidays:

  • Carnival (the two days before Ash Wednesday)
  • Ash Wednesday (44 days before Good Friday)
  • Good Friday (two days before Easter)
  • Corpus Christi (on a Thursday about two months after Easter)
  • Public Service Day (date may vary according to Ministry of Planning ordinance)
  • December 24 after 2 p.m.: Christmas Eve
  • December 31 after 2 p.m.: New Year’s Eve

Additionally, Brazilian employees also receive the following leaves:

  • Maternity Leave
  • Paternity Leave
  • Sick Leave

Work with Global PEO Services

Growing globally can be an exciting and overwhelming time for an organization, especially with all the requirements and risks. Global PEO Services, a Safeguard Global company, can help reduce the challenges and stress of international expansion, while . also helping you stay in control of your daily operations.

Staying updated on the laws and regulations in Brazil can be difficult. This can make hiring employees in Brazil, challenging. The difficulty arises from the need to comply with the many legal and tax requirements.

We manage all the legal requirements and payroll, while the business manages the international team on their daily tasks. For companies hoping to hire and pay in Brazil, GPS can help you grow and remain compliant.