Brazil is the largest country in South America with 200 million people, and the 12th largest economy in the world. The official language is Portuguese, which is the main language used for newspapers, TV, business and administration purposes.
With a labor force of over 107 million people, Brazil offers unique opportunities for expansion and growth. But expanding and managing payroll in Brazil isn’t as easy as it sounds, as it is a developing nation with lagging infrastructure and technology, and a slow and cumbersome legal system. Language is an important part of the national identity and culture, and they are the only country in the Americas with Portuguese as the official language.
Payroll and Labor Considerations in Brazil
- Employment agreements are typically an indefinite term and at will, so any party may terminate without cause with a mandatory prior notice and payment of severance
- Written contracts are not mandatory, but a document is necessary for the employee to get a social security card
- The average work day is 8 hours, or 44 hours maximum per week, with specific overtime rules
- The minimum wage is 1,045 BRL per month and the government setting the minimum wage through a decree for employees who are not covered by collective bargaining agreements
- Overtime work must be paid at least 50% higher than the regular hourly wage
- Employees are entitled to termination pay when dismissed. Pay varies depending on the duration of the contract and the type of termination
- Brazil has a progressive monthly income tax. The rate is between 0-27.5% for residents and a flat rate of 25% for non-residents
HR and Statutory Requirements
- Employees are entitled to annual paid leave after 12 months working with the same employer. The amount of time varies depending on how many days of absence for that year
- Sick leave is paid by the employer for the first 15 days of illness, after that sickness benefit is funded from Social Security
- Female employees are entitled to 120 days of paid maternity leave
- In the private sector, male employees are entitled to 5 consecutive calendar days of paid paternity leave for birth or adoption of a child
- The standard retirement age is 65 for men and 62 for women. The benefit is 70% of their average earnings plus 1% of average earnings for each year of contributions up to 100%
Holidays in Brazil
- January 1 – New Year’s Day
- February 28 – Carnival Monday
- March 1 – Carnival Tuesday
- March 2 – Carnival end (until 2pm)
- April 15 – Good Friday
- April 21 – Tiradentes Day
- May 1 – Labor Day / May Day
- June 16 – Corpus Christi
- September 7 – Independence Day
- October 12 – Our Lady of Aparecida / Children’s Day
- October 28 – Public Service Holiday
- November 2 – All Souls’ Day
- November 15 – Republic Proclamation Day
- December 24 – Christmas Eve (from 2pm)
- December 25 – Christmas Day
- December 31 – New Year’s Eve (from 2pm)
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