Employer of record in Brazil: what a hire really costs

Where Brazilian payroll breaks from US habits

Brazil pays monthly, but a year costs more than 12 paychecks, for four reasons:

1. Two mandatory extras. The 13th salary is 1/12 of December pay for each month worked, so one full extra month a year (Lei 4.090/1962). Vacation is paid at normal pay plus at least one-third (Constitution art. 7, XVII).
2. Charges with no ceiling. Employer INSS is 20% of total pay, RAT is 1%, 2% or 3% by activity risk times a FAP factor of 0.5 to 2.0 (so 0.5% to 6% in practice), terceiros add 5.8%, and FGTS adds 8%. None has a salary cap.
3. A dismissal fine built into the deposits. FGTS is deposited by the 20th of the following month, and dismissal without cause adds a 40% fine on everything deposited (Lei 8.036, art. 18).
4. The tax regime matters. Companies in Simples Nacional (outside Annex IV) pay employer INSS inside one monthly DAS charge and skip terceiros. FGTS is still due. Ask which regime the EOR's Brazilian entity uses; our figures assume the regular one.

The minimum wage is BRL 1,621.00 a month from January 1, 2026 (Decreto 12.797).

We have not yet confirmed Brazil's notice period, probation limit, annual leave days or standard work week from an official source: planalto.gov.br and the labor courts rate-limited our requests on October 17, 2026. Check those with the Ministry of Labor and Employment (MTE) before you sign a contract.

Employment costs and rules in Brazil

What an EOR charges to employ someone in Brazil

The 50.89% stack on a BRL 16,940 monthly salary

Assumptions: regular tax regime, a commerce or services company (FPAS 515), RAT of 2% with a FAP of 1.0. The charges apply to base pay, the 13th salary and the vacation one-third together: 203,280 + 16,940 + 5,646.67 = BRL 225,866.67.

Across the full RAT x FAP range of 0.5% to 6%, the on-cost runs from 49.22% to 55.33%. We include employer INSS on the vacation one-third but have not confirmed that treatment on an official page; without it, the INSS line falls by 20% x 5,646.67 = BRL 1,129.33.

Benefits set by the union's collective agreement are not priced here. Run your own salary through the employee cost calculator for other countries.

Should you open a Brazilian company instead?

The EOR fee is BRL 36,536.60 a year per person at $599 a month: 36,536.60 / 306,726.93 = 11.9% on top of the total employment cost above. A small Brazilian company of your own that qualifies for Simples Nacional (outside Annex IV) would pay FGTS plus the 13th salary and one-third, 20.0% on top of base pay, with its social security folded into a DAS charge priced on revenue rather than payroll. That gap, not the fee alone, is the number to model; our guide to EOR versus your own entity shows how.

Paying a Brazilian contractor

A contractor invoice carries none of the BRL 103,446.93 above. If a full-time contractor working under your direction is treated as an employee, the FGTS deposits, 13th salaries and vacation bonuses for the whole period are the exposure. For a hire that is really independent, compare contractor management tools; to hand the classification risk to a provider, a contractor of record runs $325 a month at Remote and $400 at Multiplier on annual billing (checked October 2026).

Which EOR to trust with Brazil

Ask every provider for its Brazil cost breakdown and compare it with the table above. On October 16, 2026, Remote's Brazil country page showed employer INSS and FGTS at 0.0%, even though its own severance section says FGTS is 8%; it listed terceiros as 0% to 3% instead of 5.8% and the minimum wage as BRL 1,518. Multiplier's Brazil page (updated October 8, 2026) gets FGTS and the BRL 1,621 minimum right, but quotes INSS as both "about 26.8%" and "20% to 28.8%", and its BRL 10,000 worked example leaves out the EOR fee.

By our scoring method, Multiplier ranks first (79/100): $459 a month billed annually or $499 monthly, with a deposit calculated from costs, fees and notice periods and refunded within 60 days. Oyster is second (64/100) at $699 flat, with a deposit of at least one month of total service cost under its terms (its pricing page, in the fee table, gives no amount). Read the Remote review, Deel review and Oyster review for contract terms, or see the ranked list of EOR providers. Regional comparisons: Mexico and Argentina.