Brazilian payroll, eSocial and FGTS: how each month is calculated and filed

Each month the employer works out gross pay, withholds the employee’s INSS contribution and income tax, adds its own charges, reports every figure through eSocial and then pays the government and the worker by fixed dates. CLT art. 459 §1 lets the employer pay salary as late as business day five of the following month, so a June payroll is normally paid in the first days of July.

Three federal systems carry the load. eSocial receives the employment and pay data, DCTFWeb turns the social security figures into a DARF payment slip, and FGTS Digital produces the guide for the FGTS (Fundo de Garantia do Tempo de Serviço), a severance fund. Nothing is filed on paper and very little is keyed twice, because each system reads what eSocial already holds.

Figures in reais are written the Brazilian way: R$ 15.000,00 means fifteen thousand reais, with the comma marking centavos. Rates are 2026 values from the Receita Federal, the Ministério da Previdência Social and the statutes linked below.

Two amounts are withheld from a CLT salary: the employee’s INSS contribution and IRRF (Imposto de Renda Retido na Fonte, income tax withheld at source). Voluntary items such as a health-plan co-payment or the employee’s share of transport vouchers come off afterwards.

INSS for employees is progressive and is calculated slice by slice. For 2026, Portaria Interministerial MPS/MF nº 13 sets 7.5% on pay up to R$ 1.621,00, 9% on the slice up to R$ 2.902,84, 12% on the slice up to R$ 4.354,27 and 14% on the slice up to the ceiling of R$ 8.475,55. Pay above the ceiling attracts no further employee contribution, so the most anyone pays in a month is R$ 988,09.

IRRF is then worked out on pay after INSS. The 2026 monthly table exempts the first R$ 2.428,80 and climbs through 7.5%, 15% and 22.5% before reaching 27.5% on income over R$ 4.664,68, each band with its own fixed deduction. An employee may subtract R$ 189,59 for each dependant, or take a simplified discount of R$ 607,20 instead of the legal deductions, whichever helps more.

From January 2026, Lei 15.270/2025 adds a monthly reduction on top of the table. Taxable income up to R$ 5.000,00 ends up with no tax at all, and the reduction then tapers in a straight line until it disappears at R$ 7.350,00. Receita Federal publishes the formula and the tables on its 2026 tax tables page.

Two smaller items appear on lower payslips. Where the employee asks for vale-transporte (the commuting voucher), up to 6% of basic salary is deducted and the employer covers the rest of the fare. Employees earning up to R$ 1.980,38 also receive salário-família of R$ 67,54 for each child up to 14; the employer pays it through payroll and recovers it by offsetting the amount against its INSS bill.

The employer’s own contributions come to roughly 35.8% of pay for a typical services business outside Simples Nacional, on lucro real or presumido. Four items make up that figure, and none of them is capped.

• INSS patronal, 20% of everything paid in the month, uncapped, under art. 22, I of Lei 8.212/1991.
• RAT, 1% to 3% depending on the accident risk of the company’s main activity, adjusted by a company-specific factor called the FAP. The 35.8% figure assumes RAT of 2% with a neutral factor; ask the employing company for its actual rate.
• Terceiros, 5.8% for FPAS 515 (commerce and most services): salário-educação, INCRA, SENAC, SESC and SEBRAE combined. Other FPAS codes carry different totals.
• FGTS, 8% of pay, deposited into an account in the worker’s name and never deducted from the employee.

These charges apply to more than the twelve monthly salaries. The 13º salário (a thirteenth monthly payment) and the holiday pay with its one-third bonus are remuneration too, which is why a Brazilian budget built on twelve months of charges comes out short. Each levy has its own page: employer charges, INSS and FGTS explained.

Companies in the Simples Nacional regime or on the payroll-tax relief scheme pay differently. The figures here assume neither applies, which matches the usual position of an established employing company.

eSocial is the single entry point, and the other two systems draw their numbers from it. The employer sends events: S-2200 registers an admission before work starts, S-1200 carries each worker’s remuneration for the month, S-1210 records payments made, and S-1299 closes the period. Terminations go in as S-2299.

Once the period is closed, DCTFWeb assembles the social security contributions from eSocial and from EFD-Reinf, the channel for withholding on payments to service providers. DCTFWeb replaced the old GFIP return and generates the DARF that the employer pays at the bank. Since the January 2025 period, the annual DIRF withholding return has been abolished, because eSocial and EFD-Reinf already hold the same data.

FGTS Digital went into production on 1 March 2024 and replaced the SEFIP and GRRF files for the severance fund. It reads the eSocial remuneration events, calculates the 8% deposit for each worker and issues a GFD guide that is paid by Pix. The official overview sits on the eSocial portal.

The practical effect is that an error in an eSocial event travels. A wrong salary code on S-1200 produces a wrong DARF and a wrong FGTS guide in the same month, so corrections are made at source and the downstream figures are regenerated. For a foreign company reading its first Brazilian cost statement, this chain explains why the invoice lines mirror the eSocial codes rather than a simple salary-plus-tax split.

Two dates govern almost everything: the 5th business day for wages and, for contributions, day 20 of the month after the pay period. Work backwards from those and the rest of the month falls into place.

• During the month: collect hours, overtime, absences, new starters and leavers; register each admission on eSocial before the first day of work.
• Up to business day five of the next month: pay net salaries and issue payslips (CLT art. 459 §1).
• After closing the period on eSocial: DCTFWeb and FGTS Digital pick up the figures and produce the payment guides.
• No later than the 20th of the month after: pay the DARF for employer INSS and terceiros, and the FGTS deposit through FGTS Digital. A date that falls on a non-business day is brought forward for the DARF.

Withheld income tax is paid to the Receita Federal as well. Confirm the current IRRF payment date and the DCTFWeb filing date with the Receita before building a calendar, because those two dates are set by normative instruction and can move.

Some months carry extra runs. The 13º salário adds a thirteenth payment to the year, and the month in which an employee takes férias (annual leave) carries holiday pay plus the one-third constitutional bonus. Each of these goes through eSocial and attracts the same employer charges as ordinary salary.

For a São Paulo city employee paid R$ 15.000,00 monthly in 2026, the payslip shows R$ 988,09 of INSS, R$ 2.944,55 of IRRF and a net payment of R$ 11.067,36. The employer adds R$ 5.370,00 in charges, so the month costs R$ 20.370,00 before benefits.

The assumptions behind those figures: CLT contract, no dependants, legal deductions used because the R$ 988,09 of INSS beats the R$ 607,20 simplified discount, and no Lei 15.270 reduction because pay is well above R$ 7.350,00. The employer is on lucro real or presumido under FPAS 515 with RAT of 2% and a neutral FAP. No vale-transporte, meal vouchers or health plan are included.

Income tax works like this: R$ 15.000,00 minus R$ 988,09 of INSS leaves a base of R$ 14.011,91; 27.5% of that is R$ 3.853,28; subtracting the top band’s fixed deduction of R$ 908,73 gives R$ 2.944,55. On the employer side, FGTS takes R$ 1.200,00, INSS patronal R$ 3.000,00, the terceiros levies R$ 870,00 and RAT R$ 300,00.

A monthly view understates the year. The holiday month and the 13º salário add payments that carry the same charges, which lifts the annual employer cost to R$ 271.600,00 in this example. We reconcile the year line by line in our São Paulo CLT cost breakdown.

Lower salaries behave differently because of the progressive tables. At R$ 5.000,00 of taxable income the Lei 15.270 reduction removes income tax altogether, and at the national minimum of R$ 1.621,00 only the 7.5% INSS band applies. A payroll team therefore checks each employee against the INSS slices, the IRRF table and the new reduction every month, rather than applying one flat percentage to the whole staff list. The same checks run again whenever a new table takes effect in January.

Under Employer of Record Brazil, your new hire is employed by us as employer of record, holding the CLT contract. We register the worker, run the monthly calculation and make the eSocial, DCTFWeb and FGTS Digital submissions as employer. Your side of the month is the information that only you hold.

• Approve salary changes, bonuses and commissions before the cut-off each month.
• Confirm overtime, unpaid absence and any leave dates your manager has signed off.
• Tell us early about a planned exit, since notice and severance items change the final payroll.
• Fund the invoice, which passes salary and statutory charges through at cost alongside the starting fee, from USD 560, per employee per month.

The admission step, from offer to the S-2200 event, is walked through in CLT onboarding through an EOR. Our payroll team applies the tables in force each month; you keep oversight of the numbers through the payslips and the cost statement that accompany each invoice.