The complete guide to offering employee benefits in Brazil

Which employee benefits are mandatory in Brazil?

Statutory benefits are required by Brazilian labor laws. If you hire an employee in Brazil and fail to provide the mandatory benefits below, you could face government penalties. This goes for Brazilian nationals and foreigners based in Brazil.

Keep in mind that the benefits required by the government of Brazil are statutory minimums, and employers can always offer more than these mandatory employee benefits. Also, note that these benefits are mandatory for employees (full-time, part-time, and temporary). Independent contractors in Brazil aren't entitled to any benefits, but they can negotiate their contracts to include certain benefits, such as paid vacation time.

Social security and pensions

Brazilian employees are covered by the National Institute for Social Security (INSS). Both employees and employers make contributions to the INSS, but employers submit all contributions on their employees' behalf.

The standard contribution paid by employers is between 26% and 29% of an employee's monthly earnings, but contributions may be higher for certain industries or if the employee is subject to hazardous working conditions.

INSS contributions cover national pension plans, employment insurance, and disability pay for all employees in Brazil.

Severance funds

Brazil also requires employers to make contributions to severance funds for all employees, called Fundo de Garantia do Tempo de Serviço (FGTS). Typical contributions are 8% of an employee's monthly earnings.

If an employee is terminated, they must be paid severance equal to at least 40% of the total amount in their FGTS fund. If they choose to leave a job, they're entitled to 20% of the fund. FGTS funds can also be used to make payments to employees for retirement, real estate purchases, or if they're diagnosed with a long-term, chronic illness like cancer or HIV.

Overtime

Overtime pay is required under Brazilian labor laws. Any employee who works more than eight hours per day or 44 hours per week is entitled to overtime pay at 150% of their usual earnings, or 200% on holidays or weekends.

Time off, vacation, and vacation bonus

The amount of paid vacation time Brazilian employees are entitled to depends on how many unexcused absences they've had from work in the prior calendar year. Vacation time accrues over a one-year period, so employees who have worked for at least one year are entitled to:

• 30 calendar days of vacation leave if they've been absent five times or less
• 24 calendar days if they've been absent between six and 14 days
• 18 calendar days if they've been absent between 15 and 23 days

Employees who have accrued vacation time are also entitled to a vacation bonus, which is equal to one-third of their monthly earnings. Employers must pay out vacation bonuses at least two days before an employee's planned leave.

Employees can request up to 33% of their vacation bonus without going on leave. Any unused vacation time rolls over into the following year, and any unused vacation bonus must be paid out at a doubled rate by the end of the year.

Sick leave

Employers are required to allow employees up to 15 days of fully paid sick leave per year. Using statutory sick leave requires a signed medical certificate from a doctor. If an illness lasts longer than 15 days, employees can receive payments from social security.

Bereavement leave

Employees in Brazil are entitled to up to two consecutive days of bereavement leave following the death of a family member, including a husband or wife, child, parent, or sibling.

Marriage leave

Employees who are getting married are entitled to up to three consecutive days of paid leave.

Parental leave

Employers are required to pay for 120 days of maternity leave for all pregnant employees. They can extend this leave by an extra 60 days that are covered by tax benefits offered by the federal government. 

Fathers are entitled to five days of paid paternity leave, which can be extended by 15 days that are covered by federal government tax credits.

Voluntary blood donation

Employees in Brazil are entitled to one fully paid day every 12 months to make a voluntary blood donation. Employers may request a certificate from the medical center to justify the absence.

Electoral registration

Employees are entitled to two paid days per year if they provide service on an election day. They may volunteer their service, or the government may request it. 

Military service

Any Brazilian employee subject to mandatory military service must receive paid leave for the duration of their service.

Exame Vestibular

Employees who take Exame Vestibular, or university admission examinations, are entitled to paid leave for all days they can prove they were taking the exams.

Court proceedings

Any time employees in Brazil are required to participate in court proceedings, they're entitled to paid leave from their employer for any work they have to miss.

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Statutory holidays

Employees in Brazil are entitled to several nationwide statutory holidays. There may also be more holidays for certain cities or states.

Below are the statutory holidays that are recognized nationwide in Brazil.

13th month/Christmas bonus

Employees in Brazil who have worked for an employer for 12 calendar months are entitled to a 13th month salary, more commonly called a Christmas bonus. This should be equal to their average monthly pay and is typically paid in two installments between November and December.

Benefits that may be mandatory in Brazil

Several other benefits may be mandatory in Brazil, depending on work conditions, number of employees, and other factors.

Transportation vouchers

If employees commute to work on public transit and the cost of transportation surpasses 6% of their monthly wages, employers must provide a transportation voucher to cover all costs past 6%. These can be provided via pre-paid, rechargeable cards. Remote workers are not entitled to this benefit.

Daycare assistance

For companies that have more than 30 female employees, daycare assistance (called auxílio creche) is mandatory. Employers who are required to provide this benefit must provide daycare space on their premises (including space for breastfeeding employees) or provide an allowance or reimbursement equal to the average cost of private daycare in the area.

What employee benefits are optional in Brazil?

The statutory benefits we've covered so far are all minimums that must be provided by employers in Brazil. In addition to these required benefits, many Canadian employers also provide additional benefit plans and perks to help them attract and retain employees. Some of the most common supplementary benefits are below.

Private health insurance plans

Brazil's public health system, Sistema Único de Saúde (SUS), is universal and free for all citizens and foreign workers living in Brazil. However, private medical insurance provides access to higher-quality healthcare and is becoming a common benefit for employers to offer to help them attract and retain the best talent in Brazil.

Private pension

Some employers offer private pension or retirement plans on top of the pension provided by social security in Brazil. A common scheme is for employees to contribute up to 5% of their earnings to a supplemental retirement plan, with a 100% match from their employer.

Group life insurance

Group life insurance is another non-obligatory benefit that's become pretty standard in Brazil. Plans provide a lump sum payment based on the employee's gross yearly remuneration. Many group life insurance plans also contain riders for accidental death, dismemberment, and permanent and total disability.

Profit sharing

Profit sharing, known as the Profit and Results Sharing Program (PLR), is an optional but common benefit in Brazil. Employers are free to set their own conditions for profit sharing (which should be outlined in the employee's contract), but profit sharing is typically paid twice per calendar year.

Food vouchers

Many companies offer food vouchers based on the average cost of meals during the employee's working hours.

Wellness benefits

To make their workplaces more attractive, many employers offer wellness and self-improvement benefits. These can include gym memberships, healthy meals, continuing education, and other benefits.

Supplemental benefits for remote workers

As remote work has become more common, Brazilian employers now offer more benefits for remote workers, such as flexible schedules and home office allowances.

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Disclaimer: Rippling and its affiliates do not provide tax, legal or accounting advice. This material has been prepared for informational purposes only, and is not intended to provide, and should not be relied on for, tax, legal, or accounting advice. You should consult your own tax, legal, and accounting advisors before engaging in any related activities or transactions.