Who this guide is for
This guide is for foreign companies that will have staff in their Brazilian company, local hires or people sent from abroad.
For the work authorization of a foreign professional, see the guide on sending employees to Brazil.
Short answer. A Brazilian company that hires an employee under the CLT pays the salary and, on top of it, rights and charges that are part of the contract: the 13th salary, vacation with at least one third extra, FGTS and the employer's social security contribution on payroll. A service contract with an independent provider does not carry these items, but it only works when the relationship really is a service relationship.
General information as of November 2026. It does not replace the analysis of each case.
Run the numbers: CLT or service contract: cost comparison
What the employee is entitled to, and what it costs
| Item | Source | Effect for the employer |
|---|---|---|
| 13th salary | Constitution, art. 7, VIII; Law 4,090/1962 | A salary bonus paid in December every year, about one extra monthly salary |
| Annual vacation | Constitution, art. 7, XVII; CLT, arts. 129 and following | Paid vacation with at least one third more than the normal salary |
| FGTS | Law 8,036/1990, art. 15 | The employer deposits 8% of the remuneration in the employee's account |
| Employer social security | Law 8,212/1991, art. 22, I | 20% on the total remuneration paid |
| Work-accident contribution (RAT) | Law 8,212/1991, art. 22, II | 1%, 2% or 3% according to the risk of the company's main activity |
| Contributions to third parties | Specific rules | Additional contributions that vary by activity. We confirm them in the payroll set-up. |
Example: a monthly salary of R$ 10,000
A simplified calculation, with every charge applied to the whole annual remuneration (12 salaries, the 13th and vacation with one third) and the lowest work-accident rate (1%):
| Item | Annual amount |
|---|---|
| 12 monthly salaries | R$ 120,000.00 |
| 13th salary | R$ 10,000.00 |
| Vacation one third | R$ 3,333.33 |
| Employer social security (20%) | R$ 26,666.67 |
| Work-accident contribution (1%) | R$ 1,333.33 |
| FGTS (8%) | R$ 10,666.67 |
| Total, before third-party contributions and benefits | R$ 172,000.00 |
The result is about 43% above twelve salaries. In payroll, some items have specific calculation bases, so the real figure can differ. Treat the example as an order of magnitude, not as a quote.
And a service contract?
A contract with an independent provider has no 13th salary, paid vacation or FGTS. The provider issues invoices and pays their own taxes, and the contracting company's cost is the fee.
The difference is not a saving by itself. Labour inspectors and courts can look at how the work is really done, not only at the name of the contract. The model fits a provider who works independently, for several clients, with their own organisation. It does not fit a person who works in practice as an employee. For a foreign professional, the work authorization is a separate matter, covered in our guide on sending employees to Brazil.
Can the company use the Simples Nacional?
A company whose owner or partner is domiciled abroad cannot opt for the Simples Nacional (Complementary Law 123/2006, art. 17, II). A company that has another legal entity in its capital is also excluded from the favoured treatment of the law (art. 3, §4, I). So a foreign-owned company is normally taxed under presumed or actual profit, and its payroll follows the general rules above.
How we work
We set up the payroll, calculate the charges with the real data of the activity, issue the monthly obligations and include the staff in the accounting. Before hiring, we compare the cost of each model with the numbers of your case.
Legal basis and sources
- Constitution of 1988, art. 7, VIII and XVII.
- Law 4,090/1962: 13th salary.
- Consolidation of Labour Laws (CLT), arts. 129 and following: vacation.
- Law 8,036/1990, art. 15: FGTS.
- Law 8,212/1991, art. 22, I and II: employer contribution and work-accident contribution.
- Complementary Law 123/2006, art. 3, §4 and art. 17: Simples Nacional.