Global employers and recruiters like you are on the hunt for Brazilian employees. The developing country’s skilled labor force and surprisingly low hiring costs are two of the main reasons for this. Then there’s the fact that a substantial portion of Brazil is multilingual and tech-savvy. 

So, how do you break into this labor market? There are countless things you can do, but among the most important is attracting Brazilian candidates with a great benefits package. That’s where we can help.

Read on as we go over employee benefits in Brazil. We’ll explore the country’s official labor law sources, mandatory employee benefits, supplemental benefits to consider, and tips for how to build a benefit plan that helps you achieve your recruiting goals.

Where to Find Brazil Labor Laws

Brazil’s official labor law – Consolidation of Labor Laws (1943) – is in Portuguese, which could be seen as a barrier for those who don’t speak the language. Luckily, there are reputable organizations out there that have translated the law into English so foreigners can understand it.

On the International Comparative Legal Guides (ICLG) website, you can find the labor code text in English. The site is user-friendly, organized, and run by a team of legal experts.

Here’s the unadulterated Portuguese text and general information about Brazil from the International Labor Organization (ILO).

Mandatory Employee Benefits in Brazil

By law, there are several employee benefits that employers must offer Brazilian employees. Those who don’t include the below benefits in their worker benefit plans will be met with legal consequences.

13th Month Salary

The 13th-month salary is known as The Christmas Bonus in Brazil, and the law mandates it for all Brazilian employees, regardless of their position in the company or their wage amount. The worker should receive a lump sum twice per year – the first lump sum by November 30th and the final one by December 20th. The amount should be 1/12 of the employee’s salary – taxes should be taken out of the second lump sum.

Vacation Time

Vacation time for Brazilian employees is 30 days per year with pay. It only applies if the employee has been working for your company for at least a year. 30 days of vacation are accrued every 12 months. The pay for this benefit is the employee’s regular pay plus ⅓ of the salary for that month.

Public Holiday Pay

In Brazil, employees are allowed to take 9 national holidays off at a minimum. Depending on where the employee resides, they could be entitled to additional time off for regional holidays. According to World Data, these are all of the mandatory public holidays:

  • January 1st – New Year’s Day
  • Monday or Tuesday before Ash Wednesday – Carnival
  • Friday Before Easter Sunday – Good Friday
  • April 21st – Tiradentes Memorial Day
  • May 1st – Labor Day
  • September 7th – Independence Day
  • October 12th – Apparition of the Blessed Mother Mary
  • November 15th – Proclamation of the Republic 
  • December 25th – Christmas Day

Severance Indemnity Coverage

When one of your Brazilian employees is terminated and it’s not their fault, they may be entitled to severance pay. Each employee’s severance account will be funded by their employer through monthly contributions of 8% of the employee’s salary.

The employee may not withdraw the money unless the law allows it. The amount of the severance payments will depend on the circumstances surrounding the employee’s termination.

Social Security Contributions

Brazilian employees should be signed up for Social Security benefits shortly after being hired. The accounts under the Brazilian Social Security agency are funded by both the employer and the employee.

Benefits included through social security include health insurance, pension, accident, unemployment, and family-centered benefits. You can expect to contribute either 20% or 22.5% – your business’s industry dictates the official percentage.

Transportation Vouchers

If your employees have to pay more than 6% of their monthly paycheck on public transportation for their work commute, you are required to give them a voucher for transportation. You’ll only pay enough to cover the portion that exceeds 6% of the employee’s monthly wage. Of course, this benefit doesn’t apply if your employee pays less than 6% of their monthly salary on work transportation.

Maternity and Paternity Leave

Both female and male employees are entitled to leave when they welcome a new child into the family. Female employees get 120 days of maternity leave and can begin the leave whenever they want, so long as it’s within a month of their due date.

In certain cases (if you and the employee agree), you can extend the employee’s leave and get a tax break equal to the amount you paid during the leave extension. As far as paternity leave, new fathers are entitled to a minimum of 5 days. This duration may be extended to 15 days, but only through a collective bargaining agreement.

Note: These same benefits apply when an employee is adopting a child.

Here’s a chart demonstrating the above:

Leave Type Leave Duration Leave Start Date
Maternity Leave 120 days Within a month of due date
Paternity Leave 5-15 days Any time after the child is born
Adoption Leave Same as maternity and paternity leave (120 days/5-15 days) Same as above

Daycare Assistance

If your company employs more than 30 female workers, Brazilian law mandates that you provide daycare assistance to your employees. You’re expected to pay 5% of the employee’s salary per child. The benefit is typically paid to the mother from the time the child is born until they are 6 months old.

Sick Leave

Unlike in other countries, there’s no set number of days employees can take for sick leave. If an employee gets sick, they’ll see a doctor who will let them know how long their sick leave should be. To prove that they need the leave, the employee should bring in a note from their medical practitioner.

For the initial 15 days of leave, the employer is expected to pay 100% of the employee’s salary for each day. After those 15 days, the government social security program will take over the sick leave payments.

Work Accident Insurance (RAT)

Work accident insurance (Riscos Ambientais do Trabalho – RAT), commonly known as “workers’ compensation insurance,” is mandatory for Brazilian workers. It’s for workers who get hurt on the job or fall ill because of an incident that happened at work.

The employer contribution for this benefit ranges from about 1% to 12% of the employee’s salary. The more dangerous your business’s industry, the higher the contribution amount will be.

Minimum Wage, Working Hours, and Overtime

The current minimum wage in Brazil is 1,621 Brazilian reals, which equates to 295 USD. Per the law, Brazilian employees shouldn’t work longer than 8 hours per day or 44 hours per week. But if they do go over this allotment, it’s considered overtime, and they should receive at least 1.5 times their regular pay.

Supplementary Employee Benefits in Brazil

Yes, the Brazilian government has many mandatory requirements that employers have to abide by to remain compliant. But that doesn’t mean other companies aren’t going above and beyond for their employees. If you want to get employees’ attention, offer them some supplementary benefits to sweeten the deal. 

Here are some great ones to start with:

  • Private health insurance with vision and dental add-ons. 
  • Mental health support in the form of counseling or therapy sessions. 
  • Profit-sharing opportunities with your company. 
  • More PTO or holiday leave or pay than outlined in Brazilian law. 
  • Working hour flexibility. 
  • Reimbursement for relevant education credits. 
  • Language classes for interested employees. 
  • Birthday gifts, time off, or other perks. 
  • Exclusive employee discounts at local businesses. 
  • Retreats, workshops, and other team-building events.

How to Build a Good Brazil Employee Benefits Plan

Ready to get started building your Brazil employee benefits plan? It’s easy to become overwhelmed if this is your first time navigating the process in a foreign country. But that doesn’t have to be the case. Read up on the following tips to learn how to craft an employee benefit plan that works for your purposes and doesn’t violate Brazil labor laws.

  • Read up on the actual laws in your potential employees’ regions. Though it’s great to read blogs and scholarly resources like this one, there’s no better source of truth than the official law text. 
  • Note all of the mandatory benefits you’ll need to include. We’ve outlined them above, but sometimes the benefit requirements will change based on the situation.  
  • Choose supplementary benefits. Take the time to ensure that they are economically feasible for your business and relevant to the types of candidates you want to attract. 
  • Compile all necessary information into a central document – digital is often better than physical – and save it in a secure location that only authorized people can access. 
  • Distribute the benefit plan as needed.

There’s a good chance that you’ll need help along the way. Lawyers, HR professionals, employers of record, professional employer organizations, tax professionals, and international business consultants may come in handy. 

So, there you have it – employee benefits in Brazil. We hope you found all the information you were looking for, and we wish you the best as you enhance your workforce with valuable talent from the Brazilian workforce.