Brazil has one of the largest developer markets in Latin America and a time zone that suits North American teams. It also has a strongly protective and relatively expensive employment system. If you hire an employee under Brazil’s labour code, the CLT, expect the true cost to be roughly 51% above the salary.
Employer contributions
| Contribution | Rate | Notes |
|---|---|---|
| INSS employer social security | 20% | No salary ceiling for the employer share |
| RAT/SAT work-accident insurance | 1–3% | Depends on risk class, adjusted by the FAP factor; 2% used in our calculator |
| Third-party contributions (Terceiros) | ≈3.3–5.8% | Sistema S, INCRA, salário-educação; 5.8% used in our calculator |
| FGTS severance fund | 8% | Deposited monthly into the employee’s FGTS account |
| Total | ≈35.8% | Before the 13th salary and vacation bonus |
Companies under Brazil’s payroll-tax relief regime (CPRB) pay differently, but that relief is being phased out through 2028, so most foreign employers and EORs should budget with the standard rates.
The 13th salary and vacation bonus
Every CLT employee receives a 13th salary — one extra month of pay each year, paid in two instalments: the first by 30 November and the second by 20 December. They also receive 30 calendar days of paid vacation with a constitutional one-third bonus on top of vacation pay. Together these add about 11.1% to the annual base salary.
Importantly, INSS and FGTS are also charged on the 13th salary and the vacation bonus. That is why the total employer contribution comes to about 39.8% of base salary rather than 35.8%.
Worked example: $36,000 a year
| Item | USD |
|---|---|
| Base salary (12 months) | $36,000 |
| 13th salary + one-third vacation bonus | $4,000 |
| Employer contributions (35.8% of $40,000) | $14,320 |
| True employment cost | $54,320 (+50.9%) |
| With an EOR fee of $599/month | $61,508 |
Calculate your own Brazil salary
Benefits developers expect
Beyond the statutory minimum, meal or food vouchers (VR/VA) and private health insurance are common in tech. The transportation voucher (vale-transporte) is statutory for commuting employees, though it matters less for fully remote roles. Budget for these when you compare offers.
Ending employment
If you dismiss a CLT employee without cause, you pay a penalty of 40% of the balance in their FGTS account, plus notice of 30 days and 3 additional days per year of service. Factor this into your planning, especially for roles you may restructure.
What about PJ contractors?
Many Brazilian developers invoice through their own company — a “PJ” — often under the Simples Nacional regime or as an MEI. It is much cheaper, but when a PJ works like an employee, labour courts frequently reclassify the relationship (known as pejotização) and order back-payment of the benefits and contributions listed above. Read our misclassification guide before choosing this route for a full-time role.
Key takeaways
- Budget about 1.51 times the base salary for a CLT employee, before EOR fees.
- Contributions apply to the 13th salary and vacation bonus as well as monthly pay.
- Brazil is rated high risk for contractor reclassification.
- Exchange rates move: the real traded around 5.51 per US dollar in November 2026.