Local entity or EOR, mandatory CLT contracts, a total cost of about 1.7 times salary, the 13th salary, vacation and eSocial: the roadmap for hiring in Brazil without building up labour liabilities.
First: who will be the employer
A foreign company cannot register an employee in Brazil directly. Either it opens a local entity with a CNPJ tax number (branch or subsidiary), which becomes the employer, or it hires through an Employer of Record, a Brazilian company that registers the employee in its own name and passes the cost through. The first option pays off after a handful of hires; the second gets the first contract signed in weeks.
The shortcut of hiring the person as a PJ contractor, paying against invoices, is the most expensive mistake. Where there are fixed hours, subordination and exclusivity, the labour courts recognise an employment relationship and award every CLT entitlement for the period, with penalties, and a foreign company with no local presence still answers through whoever represents it. PJ works for independent consulting, not for the core team.
What the CLT requires you to pay
A salary never below the national minimum wage (R$ 1,621 in 2026) or the floor set by the collective agreement of the category, paid in reais by the fifth working day of the following month. A schedule of up to 44 hours a week, overtime with a premium of at least 50% and a paid weekly rest day.
A 13th salary in two instalments (by 30 November and 20 December), 30 days of vacation a year with a one-third bonus, 8% FGTS deposited every month into an account in the employee name, and a transport voucher whenever the employee commutes by public transport. Meal vouchers and health plans are not required by law, but usually are by the collective agreement and by the market.
On dismissal without cause: 30 to 90 days of notice, a 40% penalty on the FGTS balance, prorated vacation and 13th salary and access to unemployment insurance. Open-ended contracts are the rule; a probation contract lasts at most 90 days.
What it really costs
On every real of salary the company pays 20% employer INSS, 1% to 3% RAT according to the risk of the activity, about 5.8% in third-party contributions and 8% FGTS. Adding the accruals for the 13th salary and vacation with one third, the monthly cost lands between 1.6 and 1.8 times the nominal salary, before benefits. Companies under the Simples Nacional regime do not pay the employer INSS share, which cuts the bill considerably.
A R$ 8,000 salary therefore costs somewhere between R$ 13,000 and R$ 14,500 a month. The Avos net salary calculator shows the other side: how much of that gross reaches the employee after 2026 INSS and IRRF.
Monthly obligations and eSocial
Every hire, payroll run, leave and termination is reported to the government through eSocial, the unified labour bookkeeping system. A hire goes in by the day before work starts; the month payroll by the 15th of the following month; a termination within 10 days. From eSocial come the INSS and IRRF return (DCTFWeb, paid by the 20th) and FGTS Digital (also the 20th).
A monthly payslip, an annual income statement and time tracking for companies with more than 20 employees complete the routine. A payroll system that already talks to eSocial does this on its own; without one, it is a local accountant doing everything by hand, every month.
A five-step roadmap
Decide between a local entity and an EOR. Define the role, the salary in reais and the applicable collective agreement. Sign a CLT contract with a probation period and file the hire in eSocial before day one. Set up payroll with the right charges, benefits and accruals. Close payroll every month, pay by the fifth working day and settle the returns by the 20th.
Avos was built for exactly this operation: multi-country payroll with the full Brazilian engine, eSocial, digital payslips in five languages and the parent company seeing everything in a single account.