Establishing and managing a payroll in Brazil
As the largest country in South America and possessing a diverse economy with high potential for growth, Brazil is an excellent place for businesses to expand.
However, the process of hiring and setting up your Brazil payroll outsourcing system can be difficult for foreign companies, with administrative hurdles, a different language, and regular unexpected delays often slowing progress.
At Horizons, we help businesses of all kinds to expand their operations into the country with our Brazil payroll outsourcing services. We can take care of your organization’s payroll setup and management, giving you the flexibility to work on your expansion into Brazil even if you don’t have an established entity in Brazil.
Why choose the Horizons payroll solution?
If you have an entity
For any organization that already has an established entity in Brazil, Horizons can set up your Brazil payroll outsourcing and manage the associated HR, administration, and compliance work for you.
This service is a great choice for larger businesses interested in committing long-term to their Brazilian expansion.
If you don’t have an entity
For organizations that have not established an entity in Brazil, we provide full support to help set up, manage a payroll, and hire your local workforce. Through our Brazilian subsidiary, you can hire and pay your staff, giving you greater flexibility and a low-risk route of entry into the Brazilian market.
Hire borderless talent with Horizons
Brazil payroll guide
Taxation and withholdings in Brazil
Brazil has a relatively high tax rate. Employers generally need to make contributions of about 80% of each employee’s salary towards social benefits funds.
The corporate tax rate is 15% of taxable profits, and there is an additional 10% surcharge above a certain level of income. Beyond this, there are mandatory pension contributions for each employee.
For employees, the income tax rate varies from 0% to 27.5% depending on income level.
Social Security (INSS)
|
28%
|
FTGS
|
8%
|
Third Party Companies
|
5.8%
|
Payroll Taxes, Pension, Work Accident, and Severance
|
45.59%
|
Total Employer Cost |
Up to 87.39% |
Social Security (Contributions for Private Sector Until February 29, 2020)
|
8% – 11%
|
Contributions for Private Sector beginning March 2020
|
7.5% – 14%
|
Total Employee Cost
|
14% |
Up to 1,903.98 BRL
|
0.00%
|
1,903.98- 2,826.65 BRL
|
7.50%
|
2,826.65 – 3,751.05 BRL
|
15.00%
|
3,751.06 – 4,664.68 BRL
|
22.50%
|
4,664.68 BRL and above
|
27.50%
|
Entitlements and terminations rules in Brazil
Brazil has complex and extensive employee protections compared to many countries, so it is important for employers to fully understand the relevant rules and follow them closely.
We strongly recommend that you write up a formal contract for every employee, detailing everything from compensation to benefits, entitlements, and termination terms.
These contracts should always be in Portuguese and use local currency (BRL) when referencing money.
How to establish Brazil payroll outsourcing
To establish and run a Brazil payroll system yourself, your organization will need to follow a complex set of regulations and administrative procedures that are unique to Brazil. It may require traveling to the country, and you will need to officially register with the authorities, open bank accounts, and hire staff.
Alternatively, you can outsource everything to Horizons. Our experts can take care of the entire Brazil payroll outsourcing process for you, from setup to management, HR, and hiring, whether or not your business has an entity in Brazil.
Manage payroll in Brazil
Whether it’s EOR service or just payroll management, Horizons’ employment experts can help you get started in 24h.