Employer of Record in Brazil

For companies building teams of 10 or more across business, technical, and operational functions — not for individual hires.
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Why companies build teams in Brazil

Lundi's Brazilian base — São Paulo for finance, fintech, and corporate; Recife and Belo Horizonte for engineering; Florianópolis for tech. Built for companies needing Brazilian market presence, Portuguese-language coverage, or Latin America's largest single talent pool — accepting CLT complexity and ~65–75% all-in benefit loading.

Languages

Portuguese

Payroll Frequency

Monthly, Bi-Weekly

Currency

BRL

Capital City

Brasília

Employer Tax Rate

40.00%

Brazil is Latin America's largest talent market — deep across finance, engineering, fintech, and operations. The flip side: CLT (Consolidação das Leis do Trabalho) is one of the world's most protective labor codes, with mandatory 13th salary, 1/3 vacation premium, FGTS severance fund (8% monthly), and complex termination procedures pushing all-in employer cost 65–75% above gross. For companies needing Brazilian market presence, Portuguese-language customer service, or fintech engineering depth, the talent pool justifies the complexity. For companies building teams of 10+, not individual hires.

Why companies build teams here

Brazil is the largest single talent market in Latin America — by population, by professional depth, and by fintech and engineering ecosystem maturity. Nubank, Itaú, iFood, Mercado Livre, Stone, PagSeguro, plus a deep multinational presence (every Fortune 500 has Brazil operations) create a substantial senior talent base.

Multiple hubs, different specializations.

São Paulo (Sampa) is the financial, corporate, and product capital — Faria Lima and Itaim Bibi concentrate financial services, fintech, and corporate operations. Nubank, Itaú, Bradesco, Santander Brasil, plus consulting and Big Four. Highest cost, deepest senior talent.

Recife is the engineering hub — Porto Digital tech park is one of Brazil's deepest software development concentrations, with strong fit for backend, full-stack, and mobile engineering at meaningfully lower cost than São Paulo.

Belo Horizonte (BH) is the engineering and operations hub for many international companies — strong fit for engineering and back-office at lower cost than São Paulo.

Florianópolis is the emerging tech hub on the southern coast — lifestyle-driven, growing software development scene.

Rio de Janeiro retains specialised depth in energy (Petrobras), media, and entertainment.

Operating context. Brazil is on BRT (UTC-3), one hour ahead of US East Coast in summer (Brazil doesn't observe DST in most states; US does), so seasonal time-zone alignment shifts. Full US Eastern Time overlap most of the year. English proficiency varies dramatically by city and function: São Paulo and Recife tech sectors are strong; smaller cities and non-tech roles generally require Portuguese. Brazil vs Mexico: Brazil has a larger absolute talent pool and Portuguese-language coverage for Lusophone markets; Mexico wins on US business integration, English breadth, and operational simplicity. Brazil vs Argentina: Brazil offers larger scale and political stability; Argentina offers significantly lower senior compensation (currency volatility risk).

Employer cost reality. Total employer-side contributions are among the highest in the Americas: INSS (~20% capped, plus 8.8% for general INSS), RAT (1–3% accident insurance), Sistema S contributions (~2.5–5.8%), FGTS (8% monthly to employee severance fund), plus mandatory 13th salary, vacation pay with 1/3 vacation premium, and customary benefits (VR meal voucher, VA food voucher, transport, health insurance). All-in employer cost typically lands 65–75% above gross. Mid-level engineers in São Paulo run R$15,000–R$28,000/month gross; senior engineers R$25,000–R$45,000; engineering leads R$40,000–R$70,000+. Recife and BH discount roughly 20–30%.

Employment Structure: EOR, Entity, or Build–Operate–Transfer

Brazilian employment is governed by the CLT (Consolidação das Leis do Trabalho) — one of the most protective labor codes in the Americas, with extensive employee entitlements baked into statutory law. Termination requires either just cause (narrowly defined), without-cause termination with significant indemnification, or mutual termination.

EOR works well up to 15–20 headcount. Lundi's Brazilian employment infrastructure handles INSS registration, FGTS deposits (8% monthly to employee severance fund), IRRF withholding, 13th salary, vacation pay plus 1/3 vacation bonus, and statutory benefits. Brazilian payroll is operationally complex — the EOR ceiling reflects the administrative burden more than economic considerations.

Local entity (Ltda or SA) makes sense at scale or for Lei do Bem / IT services structures. A Brazilian Ltda is the standard structure. Setup is bureaucratic (typically 3–6 months) but unlocks tax incentive structures, equity participation, and direct payroll control. Lundi's BOT pathway can guide entity setup at handover.

Lei do Bem — Brazil's R&D tax incentive. Brazilian companies engaging in qualified R&D activities can claim significant CIT reductions — up to 60% deduction of qualifying R&D expenditure (with bonuses for patent registration and university partnerships). Material for engineering-heavy operations.

IT services regime and special structures. Several state and federal programs offer reduced ICMS, ISS, or CIT for qualifying technology operations — particularly Manaus Free Trade Zone for hardware/electronics, and various tech-focused incentive programs. Lundi advises on qualification.

Mandatory benefit loading. Beyond INSS (~28%), Brazilian employers carry FGTS (8%), 13th salary (1 month), vacation pay plus 1/3 (1.33 months), plus customary VR/VA (meal vouchers) and transport benefits. Total all-in loading typically lands 65–75% above gross — one of the highest in the Americas. Buyers used to US 1.25–1.35x loading need to model this correctly.

Why HRBP infrastructure is non-negotiable in Brazil. CLT performance management, termination procedures, union interactions (sindicatos), and the ever-present risk of trabalhista lawsuits require Portuguese-fluent, CLT-literate operators. Every Lundi Brazil team includes a named HRBP from day one.

Cost of Employment in Brazil

What it costs to employ someone through Lundi.

Lundi's cost is the all-in cost of the employee — gross salary plus statutory employer contributions plus customary benefits — and a Lundi management fee on top. The management fee depends on team size and scope: smaller teams pay a higher per-head rate, teams of 20+ get materially better unit economics, and Build–Operate–Transfer engagements are structured separately.

The alternative paths look like: setting up your own local entity (meaningful months of legal and accounting work, plus ongoing in-country HR, payroll, and compliance infrastructure), engaging a local recruitment agency on contingency (typically a percentage of first-year compensation, paid once, with no ongoing employment relationship), or hiring as a contractor (lower upfront cost, real misclassification risk in most jurisdictions). Lundi is faster than entity setup, structurally different from contingency recruitment, and lower-risk than contractor arrangements.

Talk to us for specific pricing.

Talk to us about Brazil

Employer Tax Costs in Brazil

The total social contributions for employers in Brazil are between 35% and 40%. This includes social security, severance indemnity, and other common contributions like life Insurance, labour accident insurance, meal allowance, medical and dental, and social assistance.

Employee Income Taxes in Brazil

Employees in Brazil are taxed between 0% and 27.5% depending on their income bracket. Employees also pay 14% in social security contributions.

Employee Probation in Brazil

In Brazil, the probation period is 45 days, but can be extended to 90 days.

Employee Overtime in Brazil

A workweek in Brazil is eight hours per day or 44 hours per week.Any hours worked in excess of eight per day is considered overtime and is paid at the rate of 150% of the regular pay. Work on a holiday is paid at the rate of 200% of the regular pay.Overtime is limited to up to two hours per day.The positions that are exempt from the overtime requirement are those who occupy a position of trust (e.g. management, supervisors, anyone who has a high-level position in a company) and those who work outside of an office (e.g. field sales reps, employees working from home).

Employee Notice in Brazil

In Brazil, the notice period for dismissals is 30 days for employees in their first year, plus three additional days for each additional year worked (up to a maximum of 60 additional days).

For resignations, the notice period is 30 days. 

The notice period is halved if the termination is under mutual consent.

Termination in Brazil

There is no mandatory severance pay in Brazil, however an employee must receive pro rata amounts of holiday pay, 13th month pay, and vacation pay. An employer can also provide pay in lieu of notice.‍Each month, employers must contribute 8% of an employee's salary to the Severance Fund (FGTS), which employees may access upon dismissal. However, when terminating an employee without just cause, an employer must also pay a penalty into the fund in the amount of 40% of the balance in the employee's FTGS account. When the separation is mutually agreed, the employer still must pay a 20% penalty.

How Lundi works in Brazil

Build

We scope your team and recruit the right people in-country — finance, accounting, HR/payroll, BD, ops, or IT.
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Operate

We employ the team via our local entity and run the day-to-day — payroll, compliance, HR, and performance management.
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Transfer

When you're ready, we transition the team to your own legal entity. Or stay on Lundi's infrastructure indefinitely — your choice.
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Why Companies Choose Lundi

If you need help with anything, we're here for you

Who is Lundi for?

Lundi works with companies building teams of 10 or more across business, technical, and operational functions . Not for one-off hires or individual placements.

How is this different from an EOR?

EOR platforms employ individuals for you. Lundi recruits, employs, and operates concentrated teams — including day-to-day management, HR, and an optional path to your own entity. It's the operating model for companies that have outgrown the EOR ceiling.

Still have any questions? Talk to us.