Brazil’s payroll is famously expensive, and the numbers quoted range from 30% to 100%. This guide prices one hire properly for 2026 — charges, take-home pay and dismissal — compares the CLT, PJ and employer-of-record routes, and sets the result against the same role in Paraguay.
Ask ten people what a Brazilian employee costs on top of salary and you will hear anything from 30% to 100%. The spread is not ignorance; it is method. The statutory charges — social security, accident insurance, sector levies, the FGTS severance fund, the 13th salary and the vacation bonus — add about 51% to 55% to twelve months of salary for a regular company. Customary benefits that collective agreements usually require take that to roughly 70–80%. The famous “100%” figure comes from a different method that also counts paid days not worked.
For a foreign-owned company there is no shortcut: Simples Nacional, which folds most payroll charges into one payment, is closed to companies with a partner abroad or a corporate partner. This guide prices the three ways to put someone to work in Brazil — a CLT employee, a PJ contractor and an employer of record — and compares them with a team in Paraguay.
| Employer cost | Rate | Basis |
|---|---|---|
| Social security (CPP) | 20% of payroll, no ceiling | Law 8,212/1991, art. 22, I |
| Accident insurance (RAT/SAT) | 1–3% by risk class, × FAP 0.5–2.0 | Law 8,212/1991, art. 22, II |
| Third-party levies (“Sistema S”, education levy, INCRA) | About 5.8% for commerce and industry; varies by sector | Sector code (FPAS) |
| FGTS severance fund | 8% of pay, including 13th salary and vacation | Law 8,036/1990 |
| 13th salary | One extra month a year, in two instalments | Laws 4,090/1962 and 4,749/1965 |
| Vacation bonus | One third of a month’s pay on top of 30 days’ paid leave | Constitution, art. 7, XVII |
Applied to a R$10,000 monthly salary, assuming 2% accident insurance and 5.8% third-party levies:
| R$10,000 gross a month | Per year | Share |
|---|---|---|
| 12 salaries | R$120,000 | 100% |
| 13th salary and vacation third | R$13,333 | +11.1% |
| CPP, RAT (2%), third parties (5.8%) and FGTS on R$133,333 | R$47,733 | +39.8% |
| Statutory total | R$181,067 | +50.9% |
| Provision for the 40% FGTS fine on dismissal | R$4,267 | +3.6% |
| With the fine provision | R$185,333 | +54.4% |
| Typical benefits: meal voucher, health plan | Market-dependent | roughly +10–20 points |
Law and practice: Worked example; RAT/FAP and third-party levies depend on the company’s activity and accident record. Benefits are market estimates.
On the employee’s side, social security (INSS) is progressive from 7.5% to 14% up to a 2026 ceiling of R$8,475.55 a month, so it stops at about R$988. Income tax is withheld monthly at up to 27.5%. From 2026, Law 15,270/2025 exempts monthly income up to R$5,000 and reduces the tax up to R$7,350 — a large change for junior salaries, irrelevant for senior ones.
| Employee side, R$10,000 gross | Monthly |
|---|---|
| Social security (INSS), progressive to the R$8,475.55 ceiling | −R$988.09 |
| Income tax withheld (IRRF), 27.5% band | −R$1,569.55 |
| Take-home pay | R$7,442.36 (74%) |
Senior hires therefore negotiate in gross terms knowing they keep about three quarters; junior hires up to R$5,000 now keep almost everything after INSS.
Law and practice: INSS: Interministerial Ordinance MPS/MF 13/2026; income tax table and reduction: Law 15,270/2025.
Minimum wage
R$1,621 a month from 1 January 2026.
Hours
44 a week and 8 a day; overtime at least +50%.
Transport voucher
Mandatory if the employee asks; the employee contributes up to 6% of salary.
Meal voucher and health plan
Not required by statute, but usually required by the collective agreement for the category.
13th salary
Half by 30 November, the rest by 20 December.
Collective agreements
The union agreement for your category sets minimum pay, benefits and raises — read it before you budget.
Seventeen sectors — IT services, call centres and others — were allowed to pay a tax on revenue (CPRB) instead of the 20% CPP on payroll. That relief is being unwound: in 2026 such companies pay 10% CPP on payroll plus 60% of their old revenue rate; in 2027, 15% plus 40%; from 2028, the full 20%. No CPP is due on the 13th salary while the transition lasts, and the company must keep at least 75% of the prior year’s average headcount.
Law and practice: Law 14,973/2024, art. 9. Applies only to the sectors previously on CPRB.
Dismissal without cause is allowed, but it is priced in. The employer pays notice of 30 days plus 3 per year of service, up to 90; proportional 13th salary and vacation with the third; and a fine of 40% of the employee’s whole FGTS balance. Everything is due within 10 days, or a further month’s salary is owed as a fine.
For an employee on R$10,000 after three years, that is typically R$30,000–40,000 on top of the final salary. A dismissal by mutual agreement halves the notice and the fine to 20%, but the employee loses unemployment insurance — so it only works when both sides want out.
Law and practice: Labour Code (CLT), arts. 477, 484-A and 487; Law 12,506/2011; Law 8,036/1990, art. 18.
“PJ” means paying a person through their own legal entity, against invoices, instead of employing them. It is common, it is cheaper, and it is the single largest source of labour claims against foreign companies in Brazil. The test is substance: if there is personal service, regularity, pay and subordination — you set the hours, the tasks and the reporting line — the relationship is employment, whatever the contract says, and everything is owed retroactively with interest.
The law has moved in the PJ direction since the 2017 labour reform, and the Supreme Court has repeatedly overturned labour-court findings of employment. Its general ruling on the question — Theme 1389 — was still pending in mid-2026: lower labour courts were allowed to resume such cases in June 2026, while cases at the Superior Labour Court remained frozen until the thesis is fixed. Until then, the risk is real and case-specific.
Fits PJ
A specialist with several clients, own tools and own hours, paid for deliverables.
Does not fit PJ
Someone full-time on your team, in your systems, reporting to your manager.
The contractor’s tax
Simples Nacional from 6% of revenue for many services; the MEI micro-regime (limit R$81,000 a year) excludes most professional occupations.
New in 2026
PJ owners taking more than R$50,000 a month in dividends from one company now suffer 10% withholding.
Law and practice: CLT, arts. 3 and 9; Laws 13,429/2017 and 13,467/2017; STF, ARE 1,532,603 (Theme 1389); Law 15,270/2025.
An employer of record (EOR) is a Brazilian company that formally employs your person under the CLT, runs payroll, eSocial, FGTS and benefits, and invoices you for the full cost plus a fee. The statutory charges do not go away; you pay them through the EOR.
| Provider (list prices, October 2026) | Monthly fee per employee | Deposit |
|---|---|---|
| Deel | US$599 | 1–1.5 months of total cost |
| Remote | From US$599 | Not stated |
| Oyster | US$699 | About 1 month |
| Multiplier | US$459–499 plus processing fees | At its discretion |
| Pebl, Papaya Global | From US$399–499, quoted per country | Not published |
Good for
One to a few hires, testing the market, or bridging until your own company exists.
Not a tax shield
It does not let you invoice in Brazil or solve a tax-presence question.
Watch the union
The EOR’s collective agreement applies, which may not match your activity.
Check the entity
Some providers use local partners rather than their own Brazilian company.
Law and practice: Published list prices compiled October 2026; enterprise terms differ.
For roles that do not need to sit in Brazil — finance, support, engineering, regional sales — the comparison is stark.
| One employee, as a multiple of gross salary | Brazil (regular company) | Paraguay |
|---|---|---|
| Employer social charges | 35.8% on 13.33 salaries a year | 16.5% on 12 salaries |
| Extra salaries | 13th + vacation third | Aguinaldo (no IPS on it) |
| Annual cost ÷ 12 monthly salaries | ≈ 1.51 (1.54 with the FGTS-fine provision) | ≈ 1.25 |
| Employee deductions | INSS up to R$988 + income tax up to 27.5% | IPS 9% + IRP 8–10% on net income above PYG 80 million a year |
| Notice and severance | Notice up to 90 days + 40% of the FGTS balance | Notice up to 90 days + 15 days’ pay per year of service |
| Minimum wage (2026) | R$1,621 a month | PYG 3,044,000 a month (from July 2026) |
Paraguay has no FGTS and no vacation bonus, IPS stops at 16.5% for the employer, and the aguinaldo carries no social security. Working hours are longer (48 a week). The trade-off is a smaller talent pool and Spanish rather than Portuguese as the working language. A common pattern is to run Brazil-facing support or back office from Paraguay — sometimes under the service maquila regime — and keep only customer-facing roles in Brazil.
Law and practice: Paraguay minimum wage: Decree 6225/2026; IPS 16.5% employer and 9% employee; IRP under Ley 6380/2019. Figures exclude benefits in both countries.
| Situation | Usually best |
|---|---|
| Testing the market with one or two people | Employer of record |
| A genuine independent specialist with several clients | PJ contract, carefully drafted |
| A full-time person working only for you, on your schedule | CLT employee — treating them as PJ is the classic lawsuit |
| A team of five or more, or a long-term commitment | Your own Ltda with a CLT payroll |
| Back-office or regional roles that do not need to sit in Brazil | A team in Paraguay |
If you bring in a foreign employee to Brazil, add a work-residence authorisation from the Ministry of Labour before the visa — typically one to three months. And if you end up with a team, the next step is your own company: see opening a Ltda from abroad.
About 51–55% on top of twelve monthly salaries in statutory charges for a regular company, and roughly 70–80% with customary benefits such as meal vouchers and health plans.
No. Companies with a partner domiciled abroad or a corporate partner are excluded from Simples Nacional.
R$1,621 a month from 1 January 2026.
On R$10,000 gross, about R$7,442 after social security and income tax. From 2026, monthly income up to R$5,000 is exempt from income tax.
Contracting a genuine independent business is legal. If the person works like an employee — with subordination, regular hours and exclusivity — courts can reclassify the relationship and order all employment charges retroactively. The Supreme Court’s general ruling (Theme 1389) was still pending in 2026.
List prices run from about US$400 to US$700 per employee per month, plus the full salary and statutory charges, and often a deposit of one month or more.
Notice of 30 days plus 3 per year of service (up to 90), proportional 13th salary and vacation, and a fine of 40% of the FGTS balance, paid within 10 days.
For roles that can sit outside Brazil, usually yes: employer charges are about 25% on top of salary in Paraguay against about 51–55% in Brazil, before benefits.
When you actually need a Brazilian company.
The entity a CLT payroll runs on.
Tell us which roles you need and where they must sit. We map Brazil, Paraguay or both — entity, payroll and contracts — with a fixed quote within one business day.
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