Employer of Record Brazil: 6 Providers Compared
Hiring in Brazil through an employer of record: the thirteenth salary, FGTS, INSS, the vacation third, what a hire costs, and six providers compared.
Employer of Record Brazil: 6 Providers Compared
Why a Brazilian year holds thirteen salary payments rather than twelve, what an uncapped employer contribution does to a senior offer, and six employer of record providers compared on the prices they publish
The first Brazilian offer I priced, I took the monthly salary the candidate asked for, multiplied it by twelve, added a round percentage for payroll tax, and sent the number across. It was short by close to half. Brazil pays a thirteenth salary every December, adds an extra third of a month on top of vacation pay, and charges the employer a contribution that never stops rising with the salary.
An employer of record fixes the mechanics of that. The provider employs your hire through its own Brazilian entity, records the contract in the digital work card, files the monthly reporting events, runs payroll in reais, and carries the employer obligations, while you keep the work, the salary decision, and the relationship.
What it does not do is change the arithmetic underneath, or push the liability as far from you as the pitch suggests. This guide covers what Brazilian law adds on top of gross salary, the one liability rule a US buyer should read before signing anything, and six providers compared on the prices they actually publish. Every legal and contribution figure below was checked against Brazilian government sources in September 2026.
How an employer of record works in Brazil
An employer of record employs your Brazilian hire through a local entity it already holds, so you can put someone on a compliant payroll without opening a company in Brazil. You choose the person and the pay; the provider signs the contract and takes on the employer obligations.
The Brazilian mechanics run through one federal reporting system rather than a set of separate agency returns. Hires, pay runs, leave, absences, and terminations are all transmitted through eSocial, and the employment itself is recorded in the worker's digital work card. A late event is its own infraction, separate from whatever contribution sits underneath it, which is why providers ask for signed paperwork earlier than a US onboarding process would.
| Function | The provider | You |
|---|---|---|
| Employment contract | Drafts and signs it in Portuguese under the CLT, Brazil’s consolidated labor code | Agree the role, the contract type, and the salary |
| Registration | Records the hire in the digital work card and files the eSocial events | Return signed paperwork before the start date |
| Contributions and withholding | Pays the social security contribution and FGTS, withholds income tax, and files monthly | Fund each cycle |
| Thirteenth salary | Pays the advance between February and November and the balance by December 20 | Budget it as pay rather than as a bonus |
| Vacation | Schedules the thirty days and pays the constitutional third | Approve the dates and plan the cover |
| Collective agreement terms | Applies the floor, the allowances, and the benefits the category agreement requires | Decide anything above the minimum |
| Day-to-day management | Nothing | Objectives, direction, performance, and promotion |
| Termination | Executes it and calculates notice, the penalty, and accrued pay under Brazilian rules | Make the decision and give the provider warning |
The right-hand column is the part vendors underplay. A provider removes administration and legal exposure, not judgment. You still recruit, still decide, and still own whatever onboarding experience the person actually gets in their first month, five time zones or one away.
One row of that table has no US equivalent at all. Every Brazilian employee belongs to a professional category with a union on each side of it, and the collective agreement for that category can impose a salary floor, an annual adjustment date, a meal allowance, and a health plan that your offer has to honor. Ask which category your hire falls into before you agree the package, because the agreement binds the employer whatever the offer letter says.
Whether the arrangement is legal in Brazil
The model is lawful in Brazil, and has been since the 2017 labor reform opened outsourcing to any activity, including a company's core business. What the same statute does in its next article is leave the party buying the service subsidiarily liable for the labor obligations that arise while it is provided, and that is the sentence most US buyers never reach.
Article 4-A of Law 6,019 of 1974, as rewritten by Law 13,467 of 2017, permits a company to transfer the execution of any of its activities, its main activity included, to a service provider with economic capacity compatible with that execution. That wording ended a long argument in the Brazilian courts, and it is the ground the whole category stands on.
Article 5-A then adds the catch. Paragraph 5 makes the contracting company subsidiarily responsible for the labor obligations relating to the period in which the services were performed. If a provider fails to pay what your hire is owed, the claim has a path back to whoever bought the service. How far that path reaches a US company with no Brazilian footprint is a question for your own counsel, not for the vendor's sales engineer.
The second risk sits in the relationship rather than in the contract. Articles 2 and 3 of the labor code define employment by what actually happens: personal work, performed regularly, for pay, under another party's direction. Brazilian labor courts read facts. The common shortcut of engaging a Brazilian professional through a company of their own is under review at the Supreme Federal Court on general repercussion, which makes it a poor foundation for a team you intend to keep.
The thirteenth salary and the third a US budget forgets
Brazilian law puts two extra pay events on top of the twelve monthly salaries: a full thirteenth salary paid in December, and an additional third of a month attached to vacation. Between them they are worth 11.1 percent of an annual pay bill before a single contribution is counted, and neither is discretionary.
The thirteenth salary comes from Law 4,090 of 1962, and Law 4,749 of 1965 splits the payment in two. An advance of half the salary is paid at some point between February and November, at the employer's choosing, and the balance falls due by December 20. An employee who asks in January can take the advance with their vacation instead, which is a useful piece of goodwill that costs nothing.
The vacation third comes from the Constitution, whose article 7 entitles every worker to annual paid vacation with at least one third more than normal pay. It is not an expense allowance and it is not a productivity bonus. The thirty calendar days of rest are paid at full salary, and the third is paid on top of them.
| Payment | What it is worth | When it lands |
|---|---|---|
| Thirteenth salary | One extra month of pay, 8.33% of a year | An advance of half between February and November, the balance by December 20 |
| Vacation constitutional third | One third of a month, 2.78% of a year | Paid with the vacation pay, before the rest period starts |
| Vacation pay itself | Thirty calendar days at full salary | Not an extra cost, but it is thirty days of cover to plan for |
| FGTS on both | 8% of every payment, including the thirteenth | Deposited by the 20th of the following month |
| Sold vacation days | Up to ten of the thirty days, at the employee’s request | Paid with the vacation, and it does not reduce the third |
| Contributions on both | About 34.8% of the extra pay | Charged in the month each payment falls |
That last row is the part that turns 11.1 percent into almost 15. The extra pay is not exempt from anything: article 15 of the FGTS law names the Christmas gratification in the deposit base in so many words, and the social security contribution follows the remuneration itself rather than stopping at twelve salaries. Budget the thirteenth as a thirteenth month of fully loaded payroll, not as a bonus line.
What a Brazilian hire costs on top of gross
Statutory employer costs add roughly 50 percent to gross pay for a typical Brazilian hire at the lowest workplace risk rate. The structure differs from a US payroll tax in one way that matters more than the headline: none of the main employer contribution is capped, so the load does not thin out as the salary rises.
Article 22 of Law 8,212 of 1991 sets the employer contribution to the national social security institute, the INSS, at 20 percent of the total remuneration paid during the month, and adds a workplace risk contribution of 1, 2, or 3 percent according to whether the company's main activity is rated light, medium, or severe. Law 10,666 of 2003 then multiplies that risk rate by a performance factor that can cut it by half or double it.
| Employer cost | Share of 12 months of pay | Notes |
|---|---|---|
| INSS employer contribution | 20.00% | On total remuneration, with no ceiling of any kind |
| Workplace risk contribution | 1.00% to 3.00% | Set by the main activity, then adjusted by a factor between 0.5 and 2.0 |
| Third-party levies | Up to 5.80% | The education fund plus the training and support bodies, by activity code |
| FGTS | 8.00% | Into an account in the employee’s name, by the 20th of each month |
| Thirteenth salary | 8.33% | One extra month, in two installments |
| Vacation constitutional third | 2.78% | One third of a month, on top of the thirty paid days |
| Contributions on the extra pay | 3.87% | The thirteenth and the third carry the same charges as salary |
| Total employer load | About 50% | At a 1% risk rate, before the provider fee and any currency markup |
The contrast with the employee side is the detail worth holding onto. A worker's own contribution is progressive and stops at a statutory ceiling on the contribution salary, under article 28 of the same law. The employer's 20 percent stops nowhere. A senior Brazilian hire therefore costs proportionally exactly what a junior one costs, and a US cost model built on capped payroll taxes understates the senior offer by the widest margin.
Run it on a real number. A salary of R$ 10,000 a month is R$ 120,000 across twelve payments, plus R$ 10,000 for the thirteenth, plus R$ 3,333 for the vacation third, which is R$ 133,333 of pay. Employer charges of 34.8 percent on that total add R$ 46,400, so the annual cost is about R$ 179,700, or roughly US$35,300 against a headline salary of about US$23,600.
A $599 monthly platform fee then adds $7,188 a year on top, billed in dollars against a payroll denominated in reais, so a currency markup lands on top of that again. Comparing providers on the headline fee alone misleads badly, because the fee is a fraction of the story and the true cost of employing someone is fixed by Brazilian law long before you pick a vendor.
Hours, leave, and public holidays in Brazil
The Brazilian statutory package is a 44-hour week, thirty calendar days of paid vacation a year, and nine national public holidays. None of it is negotiable downward, and no provider can soften it for you.
The working week is capped by the Constitution at eight hours a day and forty-four a week. Overtime is limited to two hours a day and carries a premium of at least 50 percent. Night hours, meaning 10 p.m. to 5 a.m., attract a further 20 percent on top, and the night hour itself is counted as fifty-two and a half minutes rather than sixty, so seven clock hours of night work are paid as eight. Covering a US afternoon from São Paulo is a scheduling decision with a price attached to it.
| Term | Brazilian position | What a US employer usually expects |
|---|---|---|
| Standard week | 8 hours a day and 44 hours a week | 40 hours a week |
| Overtime | Two hours a day maximum, at a 50% premium | Time and a half past 40 hours, for nonexempt staff |
| Night work | 10 p.m. to 5 a.m., at a 20% premium, with the night hour counted as 52.5 minutes | A shift differential, if the company chooses to pay one |
| Paid vacation | Thirty calendar days a year, plus a third of a month in cash | 10 to 15 days of paid time off |
| Late vacation | Paid double if granted after the twelve-month deadline | It rolls over, or it is forfeited by policy |
| Public holidays | Nine national days, plus municipal and state ones | 11 federal holidays, not all of them paid |
| Maternity leave | 120 days, extendable to 180 by an employer that opts in | 12 unpaid weeks under federal law |
| At-will employment | Does not exist | The default in almost every state |
Scheduling the rest is the employer's job, not the employee's. Article 130 of the labor code grants the full thirty days to anyone with no more than five unjustified absences in the qualifying year, and with the employee's agreement the period can be split into as many as three blocks, one of at least fourteen consecutive days and the others no shorter than five. Miss the twelve-month deadline for granting it and article 137 doubles the pay, so leave tracking in Brazil is a budget control rather than an administrative nicety.
The holiday list is shorter than most people expect. Nine days are national: New Year's Day, April 21, May 1, September 7, October 12, November 2, November 15, November 20, and December 25. Carnival is not among them, despite the reputation, because it is a custom and a municipal holiday in many cities rather than a federal one. Maternity leave runs 120 days under the Constitution and paternity leave five days, though Law 15,371 of March 31, 2026 lifts paternity leave to ten days from January 1, 2027, fifteen from 2028, and twenty from 2029 if a fiscal target is met. Dismissal without cause is barred from the confirmation of a pregnancy until five months after the birth.
Notice, the FGTS penalty, and the price of an exit
Ending a Brazilian contract without cause costs notice, a penalty equal to 40 percent of every FGTS deposit ever made during the employment, and all accrued entitlements settled within ten days. There is no at-will dismissal and no negotiating the formula.
The one window that resembles a US trial period is the trial contract, capped at ninety days by article 445 of the labor code. After it, notice is owed on a sliding scale set by Law 12,506 of 2011: thirty days for an employee with up to a year of service, plus three days for every further year, to a ceiling of ninety days. Notice can be worked or paid in lieu, and paying it in lieu is the usual choice.
The penalty is where the real money sits. Paragraph 1 of article 18 of the FGTS law requires an employer dismissing someone without a proven just cause to deposit a further 40 percent of all the deposits made during the contract, adjusted and with interest. That is the whole historical balance, not a single year of it, so the cost of an exit grows every month the person stays. On a year of employment it is worth about 3.6 percent of annual salary; on five years it is five times that.
There is a middle route the 2017 reform added, and it is underused by US employers. Article 484-A allows a termination by mutual agreement, in which the indemnified notice and the FGTS penalty are both halved, everything else is paid in full, and the employee may withdraw up to 80 percent of the fund balance. If you are used to treating severance pay as a negotiated courtesy, this is the Brazilian version of that conversation, with a statutory shape around it.
Employer of record providers for Brazil compared
Six providers, compared on the fees they publish rather than the fees a salesperson mentions. All six publish a rate for employment, which is unusual in this category, though four of them publish a floor rather than a fixed number.
| Provider | Published employment fee | Contractor fee | Notes |
|---|---|---|---|
| Deel | From $599 per employee monthly | $49 per contractor monthly | Contractor of record at $325 per month and a US PEO product at $125 per employee monthly |
| Remote | $699 per employee monthly | $29 per contractor monthly | Says it owns all of its legal entities; publishes a Brazil country page and payroll at $29 |
| Papaya Global | From $499 per employee monthly | From $5 per contractor monthly | Lowest published employment fee among the full platforms here; keeps a Brazil country reference |
| G-P | From $599 per employee monthly | From $39 per contractor monthly | Says volume discounts are available; keeps a Brazil country reference of its own |
| Oyster | $699 per employee monthly | Free for 30 days, then $29 monthly | Annual discounts offered; project-based HR advisory metered at $300 an hour |
| RemoFirst | From $199 per employee monthly | Free, or $25 on the premium tier | Lowest published fee here, and the vendor says it can vary by country |
Two patterns show up immediately. The published band runs from $199 to $699 per employee monthly, a spread of $6,000 a year on a single Brazilian hire, which is real money at small headcount. And the more useful question in Brazil is not price at all: it is which entity signs the contract and whether the provider owns it, because the buyer of the service carries subsidiary liability for the labor obligations either way.
The six providers reviewed
Deel publishes its employment rate, which in this category is not universal, and for a US company making a first Brazilian hire the practical draw is that contractor management and employment sit in one account. The common Latin American shape of two contractors in Mexico or Argentina and one employee in São Paulo does not need two vendors, and converting someone from contractor to employee is a change of product rather than of supplier.
What to press on is Brazil specifically. The pricing page says nothing about who holds the Brazilian entity, and that answer decides who is accountable if an eSocial event is filed late or a dismissal is challenged. Ask for the Brazilian contract template too, read the intellectual property clause, because your hire contracts with the provider rather than with you, and ask which collective agreement the provider will apply to the role.
Remote states on its own pricing page that it owns all of its legal entities and does not rely on third parties to employ workers. That claim, if it holds for Brazil specifically, is worth more here than in most markets, because subsidiary liability follows the service contract: a shorter chain between your agreement and the entity on the employment card is a shorter chain for a claim to travel. It also publishes a Brazil country page, so the local detail is checkable before a sales call rather than after one.
The trade is price. At $699 per employee monthly it is the joint highest published fee here, roughly $1,200 a year above the $599 tier on one Brazilian employee. It also publishes a payroll product at $29 per employee monthly for companies that already hold a local entity, which is the product you move to if you eventually incorporate in Brazil.
Papaya Global publishes an employment rate starting at $499 per employee monthly, which undercuts every other full platform here by at least $1,200 a year per head. Its architecture was built around payments and reporting first, and that suits Brazil better than most markets, because the employer load is not one number: the INSS contribution, the risk rate, the third-party levies, FGTS, the thirteenth salary, and the vacation third all have different bases and different due dates.
Read the word in front of the price, though. A starting rate is not a Brazil quote, the contractor products are priced separately, and a mixed team of employees and contractors needs both lines added before the comparison means anything. It maintains a Brazil entry in its public country reference, which is a reasonable place to start checking how carefully a vendor keeps its local detail up to date.
G-P publishes a starting rate of $599 per employee monthly and says openly that volume discounts are available, which is the honest version of what most of this category does quietly. It also keeps a Brazil country reference of its own, so the local detail is auditable before a sales conversation rather than after one.
The shape of that pricing tells you who it suits. A discount that arrives with volume is worth nothing on a single hire and quite a lot on five, so G-P reads better as a choice for a Brazilian team you expect to build than for a one-off. Its AI compliance assistant is priced separately from $500 per seat monthly, which is a line to leave out of the comparison unless you actually want it.
Oyster publishes a rate, gives contractors a free first month before charging $29, and states on its pricing page that setup, onboarding, talking to its HR experts, and processing terminations carry no extra charge. That suits a founder who wants one Brazilian employee and no standing vendor relationship to manage, and the purchase path is among the least sales-heavy in this group.
The hourly advisory rate is the tell about the model. Project-based HR advice is metered at $300 an hour rather than bundled, so if you expect to lean on the provider through a contested exit, price that in. A Brazilian termination is exactly the moment you want a person rather than a ticket, because notice, the penalty, accrued vacation, and the proportional thirteenth all have to be calculated correctly inside ten days.
RemoFirst publishes the lowest fee in this group by a wide margin, starting at $199 per employee monthly, and says the rate applies no matter the company size with no hidden fees. On one Brazilian hire that gap is roughly $4,800 a year against the $599 tier and $6,000 against the $699 tier, which is real money at small headcount.
Two things to check before the number decides it. RemoFirst says openly that it works through in-country partners rather than entities it owns, which lengthens exactly the chain that Brazilian subsidiary liability runs along, and it confirms on its own pricing page that the fee can vary by country. Ask for the Brazil figure in writing, ask which entity signs the contract, and ask what deposit applies, because a low monthly fee paired with a large deposit is not a low-cost arrangement.
A provider or your own Brazilian company
Use a provider while your Brazilian headcount is small, and model your own company once it is not. The fee scales with every head you add, while most of the cost of running a company does not, and the crossover usually arrives sooner than founders expect.
| Route | What it takes to start | What it costs to run | When it wins |
|---|---|---|---|
| Employer of record | A contract, plus any deposit the provider requires, since it already holds the entity | $199 to $699 per employee monthly plus the Brazilian employer load | One to a handful of people in Brazil |
| Your own Brazilian company | A federal tax registration, a board of trade filing, and a resident legal representative for foreign shareholders | Local accounting, monthly reporting, and corporate tax at 15% plus a 10% surcharge and a 9% social contribution | Sustained headcount in Brazil |
| Independent contractors | A services contract, if the relationship is genuinely independent | Contractor platform fees of $5 to $49 per person monthly | Genuinely project-based work only |
The contractor row deserves a warning rather than a recommendation. Engaging someone in Brazil on a services contract while directing their hours and methods is the fastest route to a misclassification finding, and the consequences are concrete: a recognized employment relationship backdated to the first day, plus the contributions, FGTS, thirteenth salaries, and vacation the person would have accrued. The product you buy does not decide the classification; the relationship does.
Two practical notes on the entity route. The reporting cadence is monthly and unforgiving, so a local accountant is not optional, and the collective agreement covering your employees applies to your own company exactly as it applies to a provider. Incorporation removes the platform fee and the subsidiary liability question. It does not remove one line of Brazilian labor law.
What to ask before you sign
Before you choose
FirstHR is not an employer of record. We hold no entity in Brazil, employ nobody on your behalf, and take on no employer liability, so if you need someone on a Brazilian payroll next month, the providers above are the category to shortlist. FirstHR is an onboarding and HR platform, not a payroll provider.
The reason this section exists is that the provider decision and the HR decision are separate, and people conflate them. A provider handles the Brazilian legal employment. It does not run the first-week experience, own the signed documents, deliver the training the role requires, or keep employee records in a state where you can find them a year later.
That layer stays yours whichever route you take, and it is what we built FirstHR for: onboarding with e-signature, document management, training with completion tracking, and an employee record that holds together for a small business without a dedicated HR person, at a flat $98 to $198 per month.
Frequently Asked Questions
What is an employer of record in Brazil?
The party named as employer on the Brazilian contract, the payslip, and the digital work card, while the person works for you in every practical sense. It signs in Portuguese, files the monthly reporting events, pays the statutory extras on their own calendar, and carries the exposure that a US company with no Brazilian presence cannot carry itself.
How much does an employer of record cost in Brazil?
Published fees among the six providers here run from $199 to $699 per employee monthly, with four of them quoting from a floor rather than a fixed rate. Add the Brazilian employer load of roughly 50 percent on gross, any deposit the provider requires, and a currency markup, since the fee is billed in dollars against a payroll denominated in reais.
What is the minimum wage in Brazil?
The national floor is R$ 1,621 a month, in force since January 1, 2026, which is about US$318 at the central bank rate for September 11, 2026. It matters less as a budget input than as a reference point, because almost every professional hire sits far above it. The floor that binds a real offer is the one in the collective agreement covering the employee's professional category.
What is the thirteenth salary in Brazil?
An extra month of pay owed every year by law, split into an advance paid between February and November and a balance due by December 20. It is proportional for a partial year, it carries the full 8 percent of FGTS and 20 percent of employer contribution, and it is worth 8.33 percent of twelve monthly salaries before those charges.
What is FGTS?
A severance fund built from monthly employer deposits of 8 percent, banked in the worker's own name rather than paid through the payslip, with the deposit due by the twentieth of each month. It becomes an employer cost twice: once as the 8 percent itself, and again as the 40 percent penalty on the accumulated balance when a dismissal has no proven just cause.
What are employer social security contributions in Brazil?
Twenty percent of total monthly remuneration, uncapped, plus 1 to 3 percent for workplace risk depending on the main activity and up to 5.8 percent in third-party levies. A performance factor can halve or double the risk element. The employee contributes separately at progressive rates, on a base that does stop at a ceiling, which is the opposite of how the employer side behaves.
How much vacation and how many public holidays do employees in Brazil get?
Every employee earns a full month of rest, thirty calendar days of it, once they complete twelve months of service, and the national calendar adds nine public holidays. The rest can be split into up to three periods by agreement, one of them at least fourteen days, and up to ten days can be converted into cash. Granting the vacation late costs double pay, so the scheduling obligation carries a real price.
Should I use an employer of record or set up a Brazilian company?
A provider first, and a company once the fee per head costs more than running one. Your own entity means a tax registration, a board of trade filing, a resident legal representative, monthly reporting, corporate tax at 15 percent with a 10 percent surcharge and a 9 percent social contribution, and the ongoing administration that comes with all of it.