What is severance pay (verbas rescisórias)?

Severance pay (verbas rescisórias) covers all the amounts owed to the worker when the contract ends. The basic package includes the salary balance (days worked in the month), accrued and proportional vacation with the 1/3 bonus and the pro-rated 13th salary. What else comes in depends on the type of departure.

In a dismissal without cause, prior notice (worked or paid in lieu) and the 40% penalty on the FGTS balance are added, along with the release of the withdrawal and unemployment insurance. On resignation, the worker receives the basics, but no penalty, withdrawal or insurance. For cause, only the salary balance and accrued vacation remain. In the legal mutual agreement (art. 484-A), notice and penalty are halved and the FGTS withdrawal is 80%.

The payment deadline is up to 10 calendar days after the end of the contract — delay costs a penalty of one month of the employee's salary (art. 477 of the CLT). Getting the math wrong is expensive too: severance differences are among the most common claims in Brazilian labor courts.