How an employer of record for Brazil hires works, and what you still decide

An employer of record for Brazil hires puts a person on a Brazilian payroll without you opening a company there. Hiring with Employer of Record Brazil means the contract is signed under the Consolidação das Leis do Trabalho (CLT, the federal labour code) by the employer of record; its signature is what makes it the legal employer of the candidate you chose. You keep choosing who to hire and what they work on.

The employer of record’s side of the arrangement is mostly paperwork that Brazil treats as non-negotiable. It logs the start of employment in the worker’s carteira de trabalho (CTPS, the now-digital work record), reports the hire to eSocial (the federal digital payroll reporting channel), withholds income tax and social security from each payslip, and pays into the employee’s Fundo de Garantia do Tempo de Serviço account (FGTS, a severance fund) each month.

For the person joining, the result is an ordinary CLT job. They get a registered contract, a Brazilian payslip, paid férias (annual leave) with its one-third bonus, the 13º salário and the protections that come with CLT status. Nothing about their rights is reduced because the business directing their work sits abroad.

The same applies to a foreign national you want to bring in, with one extra stage: a work-linked autorização de residência, which the MJSP (justice ministry) grants under CNIg Resolução Normativa nº 2/2017. Once that person lands on a temporary visa tied to a job contract, Brazil counts them as tax resident from the first day and uses the ordinary rate table.

The employer of record carries the employer duties that the CLT and the tax rules attach to whoever signs the contract. Most of them run on fixed monthly dates, and a missed date usually costs interest or a fine.

• Complete the CTPS entry for the new contract, covering start date, salary and any special conditions, inside 5 business days (CLT art. 29), which in practice means filing the S-2200 admission event ahead of day one.
• Settle every month’s pay by the fifth working day after the month closes, counting business days only (CLT art. 459).
• Deposit 8% of pay into FGTS through FGTS Digital no later than day 20 of the following month, without deducting it from the employee.
• Withhold employee INSS (7.5% to 14% by band in 2026) and IRRF income tax, and settle employer contributions through a DARF generated in DCTFWeb by the 20th.
• Pay the 13º salário, plan 30 calendar days of férias per 12-month period and add the constitutional one-third when leave is paid.
• Handle notice, the final settlement and the eSocial termination event (S-2299) when employment ends.

The monthly reporting chain runs from eSocial into DCTFWeb for contributions and into FGTS Digital for the fund, so errors in one event travel into the others. An employer of record that treats the S-1299 monthly closing as routine saves you a lot of reconciliation later.

Your business keeps the commercial relationship with the worker: you pick the candidate, set the role, agree the salary budget and review the work. The employer of record does not decide what your team builds or sells, and it has no say in your product or clients.

You also keep the cost. Salary, the employer charges that sit on top of it, any benefits a sector-level convenção coletiva de trabalho (CCT) requires and the cost of any dismissal are passed through to you, plus the monthly service fee and, as a rule, a set-up fee charged once. Budget for those items from the start rather than treating the monthly salary as the whole figure.

Decisions that change the contract, such as a pay rise, a switch to teletrabalho (remote work) or a dismissal, are yours to initiate and the employer of record’s to execute and record. Teletrabalho is one example: CLT arts. 75-A to 75-F require it to appear in the individual contract, and equipment and expenses to be agreed on paper. Agree early how the contract will deal with inventions and software the employee creates, and take Brazilian advice on the wording.

Brazil has no statute or regulation that deals with employer of record arrangements as such, and that gap is the main risk you should weigh before hiring this way. Lei 6.019/1974 holds the only statutory rules on one business supplying workers to another, and it deals with two situations.

One is trabalho temporário (temporary work): placements made by an agency holding a Ministério do Trabalho licence, limited to transitory needs and to 180 days plus a 90-day extension. The other is terceirização (outsourced services), in which the supplier itself recruits, pays and manages the people doing the work (art. 4-A). Under a typical employer of record model it is the client’s managers who give instructions each day, so the arrangement does not sit neatly inside either framework.

The practical exposure is a claim that an employment relationship (vínculo empregatício) exists directly with your business. The CLT defines an employee by personal, non-occasional, paid work under the employer’s direction (art. 3), and treats acts aimed at defeating the code as null (art. 9). Even inside genuine terceirização the client stays subsidiarily liable for the provider’s labour obligations for the period of service (art. 5-A), which tells you how Brazilian law tends to spread responsibility. Labour courts look at how the work actually runs, not at the labels in the contracts. Take Brazilian legal advice on your own set-up, and read our note on PJ or CLT misclassification risk for the contractor side of the same question. The Supremo Tribunal Federal is also reviewing, under Tema 1389, whether engaging people via their own companies or as self-employed contractors holds up; no ruling on the merits had been given by 25 September 2026.

Leave works exactly as it would for any CLT employee, and the employer of record administers it through payroll and eSocial. Your managers approve dates; the employer of record calculates and pays.

A full 12-month acquisition period gives the right to 30 calendar days off on férias (CLT art. 130), paid with the one-third terço constitucional. Licença-maternidade (maternity leave) is 120 days, and since Lei 15.222/2025 the 120 days count from discharge when a birth-related hospital stay of the mother or newborn lasts more than 2 weeks. The employer pays salário-maternidade and offsets it against INSS contributions.

Licença-paternidade is 5 days in 2026. Lei 15.371/2026 raises it to 10 days from 1 January 2027 and 15 days from 1 January 2028, with a further step to 20 days from 2029 that depends on fiscal targets, and protects the father from dismissal from the first day of that leave until a month after it finishes. Where the employing company has joined Empresa Cidadã, mothers get 60 more days and fathers 15 more, so ask whether the employer of record has opted in.

The CLT also lists short paid absences, such as 3 consecutive days for marriage and 2 for the death of a close relative (art. 473). Carnaval is a ponto facultativo in São Paulo’s 2026 calendar, not a public holiday, unless a CCT or local law says otherwise.

A CLT hire costs noticeably more than the headline salary, because Brazil pays 13 and a third salaries a year and puts employer charges on every one of them. Our São Paulo worked example uses a monthly salary of R$ 15.000,00 for 2026 and assumes the employer is on lucro real or lucro presumido, classified FPAS 515, paying RAT at 2% multiplied by a FAP of 1.0.

On those assumptions the employer charges come to 35.8%: INSS patronal 20% with no ceiling, RAT 2%, contributions to third-party entities (terceiros) of 5.8% and FGTS 8%. Annual gross pay is R$ 200.000,00 (twelve monthly salaries, one 13º salário and the one-third added to férias pay), charges add R$ 71.600,00, so the employer spends R$ 271.600,00 over the year, close to R$ 22.633,33 a month. Meal vouchers, health plans and other CCT benefits are excluded and would add to it.

Two assumptions move the total most. Every extra or missing point of effective RAT (the rate once FAP is applied) shifts the yearly cost by around R$ 2.000,00, and an employer under FPAS 566, whose terceiros rate is 4.5%, would spend roughly R$ 2.600,00 a year less. On the employee side the same salary produces an annual net of about R$ 147.500,68 after employee INSS and IRRF, with no dependants.

The EOR fee sits on top of that: from USD 560 a month for each employee, which converts to about R$ 2.901,24 using ECB reference rates of 24 September 2026. Statutory items are recharged at what they cost. The line-by-line workings are in our São Paulo cost breakdown, and the fee terms are set out on our pricing page.

Your own Brazilian company becomes the better route once you plan a team large enough, and a presence long enough, to justify running a local business with its own bookkeeping, tax regime and payroll. A per-head fee suits one to a handful of hires; a fixed-cost entity starts to pay off as numbers grow.

An entity also removes the question of who directs the worker, because your company would be the employer on the CTPS. Government data from the Mapa de Empresas puts the average time to open a company in Brazil at about 23 hours, but that average mixes every kind of company and is dominated by Brazilian founders, so ask your adviser for a realistic timetable for a foreign-owned company. An entity brings every CLT duty in-house at the same time, including eSocial reporting, FGTS Digital and labour claims, which a former employee may file within 2 years of leaving, claiming rights from the previous 5 years.

Many businesses start with an employer of record to test the market and move to their own company later. The trade-offs are set out in EOR or Brazilian LTDA, and the practical first weeks of a hire are described in our onboarding walkthrough.