Planning to hire employees in Brazil? Here’s a quick guide

Brazil is home to a large and dynamic talent market and has become a strategic hiring destination for U.S. companies looking to expand. With a young, tech-savvy, and cost-effective workforce, strong English proficiency, and favorable time-zone alignment, it makes sense for U.S. companies to explore their options for hiring employees in Brazil. 

But bringing on employees in Brazil also comes with legal complexities. Payroll, taxes, and compliance must all be considered before making any hiring decisions. 

In this guide, we walk you through the essentials: how to hire in Brazil, the key employment laws to be aware of, and how a global Employer of Record (EOR) like Payoneer Workforce Management can help you hire, pay, and manage Brazilian employees without setting up a local entity.

How to hire an employee in Brazil: Options for U.S. companies

U.S. companies that hire workers in Brazil can take several paths, each with its own cost, complexity, and compliance requirements.

1) Set up a legal entity in Brazil

Registering a local legal entity gives you full control to hire employees in Brazil directly and operate in-country. This approach makes sense if you have long-term plans to expand your business in Brazil.

However, setting up an entity is an expensive and complex process that requires strict compliance with Brazilian labor laws. It’s not ideal for companies looking for fast or flexible solutions.

2) Hire contractors in Brazil

Working with independent contractors is a flexible way to hire in Brazil for short-term projects. It usually involves less upfront setup and can be cost-effective.

However, if you go down this route, it’s critical to ensure you classify workers correctly. Brazil has strict rules around employment status, and if a contractor is treated like an employee, your company could face heavy penalties, fines, and legal issues.

3) Use an Employer of Record

An Employer of Record assists U.S. companies hiring in Brazil with support to onboard full-time employees without opening a local entity. The EOR acts as the legal employer on paper, helping handle payroll, benefits, taxes, and compliance, while your business manages the day-to-day work.

For more information, here’s everything to know about using an Employer of Record in Brazil.

Where to find employees in Brazil

Once you’ve decided how to hire an employee in Brazil, the next step is finding the right talent. These are some of the most common ways to find employees in Brazil.

Popular job boards in Brazil

Job boards are a great starting point for attracting candidates in Brazil, especially for tech, customer support, and administrative roles. 

Some of the most widely used platforms include:

• LinkedIn: A professional networking site that connects businesses with top talent
• Indeed Brazil: A leading job site that allows you to post jobs, screen candidates, and manage applications in one place
• Trabalha Brasil: A local job platform that allows you to message candidates directly for fast and easy outreach
• Vagas.com.br: A platform integrated with Google for Jobs, LinkedIn, and Jooble to reach a wide range of candidates
• Catho: Another local favorite that is free to use

Work with local recruitment agencies

If you’re looking to fill roles quickly or need help navigating the local market (and the local language), partnering with a recruitment agency in Brazil can be a smart move.

Don’t forget, though, that recruitment agencies charge fees, usually based on a percentage of the hired employee’s annual salary, so this option will incur additional costs.

Recruit through an EOR

If you’d prefer not to handle the recruitment process alone, an EOR like Payoneer Workforce Management may help. While you still lead the search and choose the candidate, the EOR may assist with employment contracts, onboarding, payroll, and benefits.

This option is especially helpful if you don’t have internal HR resources familiar with local labor laws.

Onboarding employees in Brazil

Once you hire employees in Brazil, it’s time for onboarding. This typically includes:

• Collecting required documents, including ID and tax registration number
• Adding them to payroll and local benefits programs, including registering them with the National Institute of Social Security (INSS) and tax authorities
• Providing an orientation or welcome session, including introducing the new hire to their manager and team, and configuring their IT equipment and access to work tools
• Sharing company policies, procedures, and handbooks, usually in both English and Portuguese

An EOR like Payoneer Workforce Management can help streamline onboarding in Brazil by managing the documentation, compliance support, payroll setup, and benefits enrollment on your behalf. 

Key employment laws and requirements in Brazil

Hiring employees in Brazil means complying with several labor laws designed to protect workers. Here are the key ones to keep in mind. 

Employment contracts

All employees must have a written employment contract that clearly outlines the terms of employment. Contracts must comply with Brazil’s labor laws, Consolidação das Leis do Trabalho (CLT), and should be provided in Portuguese.

Key elements to include are:

• Job title and description
• Contract type (indefinite or fixed term)
• Start date
• Working hours and location (remote, hybrid, or in-office)
• Salary and payment frequency (ensure this is in the local currency)
• Benefits and entitlements
• Probation period (usually up to 90 days)
• Termination clauses

Employee benefits

Brazilian labor law requires a range of statutory benefits for full-time employees, including:

• Vacation leave and PTO: 30 days per year after 12 months of service
• Vacation bonus: Equivalent to ⅓ of the employee’s monthly salary during the leave period
• 13th-month salary: Annual bonus equivalent to 1 month’s salary
• Sick leave: Up to 15 days paid by the employer, then the INSS pays sickness benefits
• Maternity and paternity leave: 120 days and 5 days, respectively
• Public holidays: Brazil observes 13 public holidays, which are paid non-working days
• Pension and social security contributions: Employers must contribute to the National Institute of Social Security (INSS) and the FGTS severance fund

Working hours and overtime

Under Brazilian labor law, standard working hours are 8 hours per day, and 44 hours per week maximum. A 1-hour break is required for shifts longer than 6 hours. Overtime must be paid at a minimum of 150% of the regular hourly rate, or 200% if worked on Sundays or public holidays.

Tax obligations

Employers in Brazil are responsible for a number of tax and social security contributions and withholdings on top of gross salaries. These typically include:

• IRPF (income tax): Employers are responsible for withholding income tax from their employees’ salaries. The tax ranges from 0% to 27.5%, depending on income. The tax exemption threshold was increased in May 2025 to align with the increased minimum wage.
• INSS (social security): Both the employer and the employee contribute to Brazil’s social security program, helping to fund pensions, maternity leave, temporary disability benefits, and more. Employer contributions range from 20–22.5% depending on salary, while employee contributions are between 7.5–14% depending on the industry.

• FGTS (severance): As an employer, you also have to contribute 8% of your employee’s gross salary to their severance account every month.
• RAT (Work Accident Insurance): You also need to contribute between 1% and 3% to a work accident insurance policy, based on the level of occupational risk. 
• Social taxes (Third-party entities): To support programs like SENAI and SEBRAE, employers also contribute 5.8% to public institutions that provide professional training and development.

Brazil’s tax and payroll systems are complex, and rates can vary based on company size and sector. Working with an EOR like Payoneer Workforce Management helps streamline the process.

Termination and severance

Termination in Brazil is heavily regulated and must follow specific legal procedures to avoid disputes or penalties. An employer can legally terminate employment in Brazil in one of two ways.

1. With cause: For serious misconduct (e.g., fraud, insubordination), employers can terminate a contract with no prior notice or severance pay. However, strong documentation of the cause is essential. 
2. Without cause: Employers can terminate employees at any time but must provide notice (or payment in lieu) and severance pay. Notice periods depend on the length of service, though employees are usually given at least 30 days’ notice, plus 3 days for every year of service, up to a maximum of 90 days.

In most cases of dismissal without cause, employees are also entitled to:

• Unused vacation days + ⅓ bonus
• 13th-month salary (pro-rata)
• 40% fine on the FGTS balance, paid by the employer
• Release of FGTS funds
• Unemployment insurance eligibility (if applicable)

All payments must be made within 10 days of termination.

Payoneer Workforce Management helps hire employees in Brazil

Hiring employees in Brazil offers access to a large and skilled talent pool. But it also comes with complex labor laws, tax requirements, and administrative processes. From drafting compliant contracts to managing payroll, benefits, and severance, there’s a lot for U.S.-based companies to navigate.

Payoneer Workforce Management is a global workforce platform that helps companies hire full-time employees and independent contractors in over 160 countries, including Brazil, without the need to set up a local legal entity.

With Payoneer Workforce Management, you can:

• Onboard employees quickly and compliantly
• Run global payroll in one click, with visibility and control
• Manage timesheets and more

Ready to simplify hiring in Brazil? Book a demo with our team today.

FAQs

1) Can a U.S. company employ someone living in Brazil?

Yes, but U.S. companies that hire workers in Brazil must follow Brazilian labor laws. You can’t legally hire a Brazilian resident as a full-time employee without registering a local entity or using an Employer of Record. An EOR that acts as the legal employer in Brazil while you manage the day-to-day work.

2) How do I hire a Brazilian for a U.S. company? 

There are three main ways to hire employees in Brazil:

1. Set up a legal entity in Brazil to hire directly (can be costly and time-consuming).
2. Engage them as an independent contractor (which works for short-term or project-based work, but you must avoid misclassification).
3. Use an Employer of Record like Payoneer Workforce Management to hire them as a full-time employee compliantly, without setting up a local business.

3) How can an EOR help U.S. companies hiring in Brazil?

An Employer of Record assists with handling the legal and administrative side of employment so you can focus on finding and managing talent. With an EOR like Payoneer Workforce Management, you can:

• Hire full-time employees without opening a local entity
• Compliantly draft and manage employment contracts
• Handle local onboarding requirements and documentation
• Run compliant payroll and benefits
• Manage taxes, paid leave, severance, and more

An EOR helps streamline the hiring process, especially in complex markets like Brazil.