Short answer. Hiring in Brazil carries significant employer-side charges on top of salary — chiefly employer social security (INSS), the FGTS severance fund, and risk/third-party contributions. A foreign company budgeting Brazilian headcount should model the fully-loaded cost, not just gross pay.
The core employer charges
- Employer INSS (social security). The standard employer contribution is 20% on payroll, funding social security. [Source: Lei 8.212/1991 — Planalto]
- RAT (occupational-risk). An additional 1%–3% depending on the activity’s risk level. [Source: Lei 8.212/1991]
- “Terceiros” (Sistema S and others). Contributions to entities such as SESI/SENAI, typically around 5.8%, varying by sector. [Source: Lei 8.212/1991]
- FGTS. An 8% monthly deposit into the employee’s severance fund (FGTS). [Source: Lei 8.036/1990 — Planalto]
Layered together, employer charges commonly add a substantial percentage on top of base salary, before accounting for vacation, the 13th salary and other CLT entitlements.
The payroll-tax-relief phase-out (2025–2028)
For about 17 designated sectors, Brazil had a payroll-tax relief (desoneração) allowing a contribution on gross revenue (CPRB) instead of the 20% on payroll. That relief is being phased out gradually: the payroll-based contribution returns at 5% in 2025, 10% in 2026, 15% in 2027, and the full 20% from 2028, with the revenue-based contribution shrinking in parallel. If you operate in an affected sector, your payroll cost is rising on a schedule. [Source: Lei 14.973/2024 — Planalto]
Practical takeaway
Build a fully-loaded labor cost model: base salary + employer INSS (~20%) + RAT + terceiros + FGTS (8%) + accrued 13th salary and vacation. If you are in a relief sector, factor the 2025–2028 ramp to full payroll taxation. Payroll obligations are also reported digitally (eSocial/EFD-Reinf/DCTFWeb), so compliance bandwidth matters too.
FAQ
What is the employer social-security rate in Brazil? Generally 20% on payroll (INSS), plus RAT (1–3%) and third-party contributions (~5.8%).
What is FGTS? A mandatory 8% monthly employer deposit into the employee’s severance fund.
Is payroll-tax relief still available? It is being phased out: the payroll-based contribution returns at 5% (2025), 10% (2026), 15% (2027) and full 20% from 2028 for the affected sectors.
Sources
Official sources reviewed for this brief: the social-security funding law (Lei 8.212/1991), the FGTS law (Lei 8.036/1990), and the law phasing out payroll-tax relief (Lei 14.973/2024).