What is CLT?
CLT stands for Consolidação das Leis do Trabalho (Decree-Law 5,452/1943), the statute that governs employment relationships in Brazil. In everyday usage, 'being CLT' means working as a formal, registered employee, under the set of rights and duties the law establishes for employees and employers.
The regime guarantees, among other things: pay never below the minimum wage, a standard 44-hour week with overtime paid at a minimum 50% premium, 30 days of annual vacation with the 1/3 bonus, the 13th salary, 8% FGTS deposited by the employer, paid weekly rest, maternity and paternity leave and protections upon termination.
For the company, hiring under CLT involves charges beyond the salary: employer INSS, FGTS, vacation and 13th-salary accruals — total cost usually lands well above the nominal salary. It is the counterpoint in the classic comparison with PJ contracting, which carries neither those rights nor those costs.
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A CLT contract at R$ 3,000 costs the company much more than that: besides the salary, there is FGTS (R$ 240/month), employer INSS and the accruals for vacation + 1/3 and 13th salary. In practice, the total monthly cost usually exceeds R$ 4,000, varying with the company's tax regime.
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What does it mean to be CLT in Brazil?
Being CLT means working as a formally registered employee under the Consolidation of Labour Laws: a registered contract, pay never below the minimum wage, up to 44 hours a week, 30 days of vacation plus one third, a 13th salary, 8% FGTS deposits and protection on dismissal.
What is the difference between CLT and PJ?
A CLT worker is an employee, with rights guaranteed by law and charges paid by the company. A PJ is a company hired to provide services, with no vacation, 13th salary, FGTS or notice pay, and handles its own taxes. A PJ with subordination, fixed hours and exclusivity can be reclassified as a CLT employee in court.
How much does a CLT employee cost the company?
Well above the salary: 20% employer INSS, 1% to 3% RAT, roughly 5.8% in third-party contributions, 8% FGTS and the accruals for vacation with one third and the 13th salary. In practice total cost usually lands between 1.6 and 1.8 times the nominal salary, before benefits.