Brazil is one of the largest economies in the world, with growth expected across all industries and business sectors. As the country’s economy continues to surge, Brazil has emerged as a logical destination for organizations that want to leverage one of the largest domestic markets to expand their global presence. But, with its tremendous economic potential, is also a complex country where doing business can prove to be difficult. In 2019,Brazil is ranked by the IMF at the 109th position (out of a total of 190 countries) on “Ease of doing business” (rating was 125th in 2018).The assessment on taxes is even worse: 184th position.

​

In order to reap the most benefit from the unlimited growth potential the country offers, employers must first gain a solid understanding of Brazil’s laws regarding compensation as well as their responsibilities as an employer.

​

Why brazilian taxes are among the world’s most tricky? Four main explanations for this:

 

• The organization is complex. It’s a Federal Republic; outside Brasilia (Federal District), there are 26 Federal States, and inside these States there are thousands of Municipalities. They all have strong powers of taxation.

• As a consequence of this very large number of actors on this topic, there are countless exceptions and many litigations (among other things, because States compete amongst each other to maximize budget income; and so do Municipalities).

• Rules, methods of calculation, and above all rates of taxes are constantly changing. The Brazilian industrial lobby (among its members are many international carmakers with factories on Brazilian soil), the exchange rate of the Brazilian currency against the USD, the growth of the economy, and many other indicators are the reasons of permanent changes in taxation.

• The Brazilian government has a protectionist policy. Taxes on importations can be very high; and on top of that, administrative procedures and the calculation of these taxes are exceptionally tricky.

​

The rights and duties of both employers and employees are established by the Consolidation of Brazilian Labor Laws. Known simply as CLT, this legislation was designed to establish labor rights in the country and covers all aspects of employment and payroll. Although the labor laws are extensive, the following are some of the most important considerations for employers hiring employees in Brazil.

​

To help clarify all these doubts, our team of experts developed a manual containing the main information regarding Payroll in Brazil. In this manual, you will find important information on the topics listed below:

LEGAL FRAMEWORK

Primary Labor Rights

Union Agreements

 

PAYROLL CONCEPTS

Monthly Salary

13th Salary

Annual Vacations

Employee Benefits

Profit Sharing Programs

Termination of Employment

 

eSOCIAL PAYROLL OBLIGATIONS

 

PAYROLL TAXES

Employer Contributions in Brazil

Employee Contributions in Brazil

 

PAYROLL REPORTS & CALCULATIONS

Payroll Analytic Report

Payslip Report

Vacations Receipt

Termination Report

​

​

 

​