Ensuring Compliance When Using EOR Services in Brazil

An employer of record (EOR) lets a foreign company hire people in Brazil before it has a Brazilian entity. The EOR becomes the legal employer under the CLT (Consolidação das Leis do Trabalho). It signs the contract, registers the employee in eSocial, runs payroll and pays contributions, while you direct the work. Brazil is one of the costliest and most regulated places to employ people in Latin America, so here is what that involves in 2026.

How an EOR works in Brazil

• The EOR signs a CLT employment contract with the employee and records it in the digital work card (CTPS Digital) through eSocial.
• It calculates salary, withholdings and employer contributions each month and files them through eSocial and DCTFWeb.
• You sign a service agreement with the EOR and pay the full employment cost plus its fee.

What employing someone costs in Brazil

• Minimum wage: R$1,621 a month from 1 January 2026 (Decreto 12.797/2025). Some states and collective agreements set higher floors.
• INSS (employer): 20% of payroll for companies outside Simples Nacional, plus work-accident insurance (RAT, 1% to 3%, adjusted by the FAP factor) and third-party contributions, usually around 5.8%.
• FGTS: 8% of gross pay deposited every month in the employee’s FGTS account.
• Employee withholdings: INSS at progressive rates from 7.5% to 14%, plus income tax at source.
• 13th salary: one extra month’s pay a year, in two instalments (by 30 November and 20 December).
• Vacation: 30 days’ paid vacation a year, with a bonus of one third of salary.

Contracts and working time

Most roles use an indefinite CLT contract. Fixed-term contracts are limited to specific cases and up to two years, with a probation (experience) contract of up to 90 days. The standard working week is 44 hours and 8 hours a day, and overtime is paid at a premium of at least 50%.

Ending employment

• Notice: 30 days, plus 3 days per full year of service, up to 90 days (Law 12.506/2011). It can be worked or paid in lieu.
• Dismissal without cause: the employer pays a fine of 40% of the FGTS balance, plus accrued vacation and 13th salary.
• Termination is reported through eSocial, and the employee can then withdraw the FGTS balance and claim unemployment insurance.

Easyco provides EOR services in Brazil and can later move your team to your own Brazilian company.

EOR or your own company?

An EOR is a quick way to hire your first people in Brazil. Once you plan a larger team, need to invoice Brazilian clients or want to hold contracts in your own name, it is usually better to set up your own company (usually a Ltda.) and move payroll to it. See our employer of record and PEO services in Latin America and our payroll outsourcing in Brazil guide.

Get help from Easyco

Easyco coordinates the company setup in Brazil up to the issue of the CNPJ, and supports companies afterwards with tax, accounting, payroll and company compliance, including a registered office address. Request a quote.