Brazil Employee Cost Calculator (2026)
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Hiring in Brazil costs far more than the salary on the offer letter. This calculator breaks down every mandatory employer charge for a CLT employee in 2026 — the FGTS severance fund, the 13th-salary and vacation provisions, employer social security with the RAT risk rate and third-party levies — and returns the real cost multiplier, which differs sharply between the Simples Nacional and Lucro Presumido tax regimes.
What a Brazilian employee really costs
A CLT employment contract — the standard Brazilian labor regime — carries statutory charges that no employer can opt out of. On top of the gross salary, the company deposits 8% into the employee’s FGTS severance account every month, accrues one twelfth of the salary for the mandatory 13th salary, and accrues 1.333 twelfths for annual vacation, which by constitutional rule is paid with a 33% bonus on top.
Those three items alone add roughly 29% to payroll. Companies outside the Simples Nacional simplified regime pay a second layer: 20% employer social security (INSS patronal), a 1–3% occupational risk rate (RAT), and around 5.8% in third-party levies that fund vocational training and education programs. That layer pushes the total to roughly 1.62× the salary before any benefits.
Benefits are negotiated rather than statutory, but in practice most Brazilian employers provide transport vouchers, meal vouchers and private health insurance. Budget an extra R$400–R$1,500 per employee per month depending on seniority and city.
The two tax regimes that change everything
Simples Nacional is a simplified regime for companies with revenue up to R$4.8 million a year. Under annexes I, II, III and V, the 20% employer social-security contribution is already bundled into the single monthly DAS tax, so it is not charged again on payroll. Annex IV — construction, cleaning, security and legal services — is the exception and still pays the 20% separately.
Lucro Presumido and Lucro Real are the standard corporate regimes used by larger companies and by most subsidiaries of foreign groups. They pay the full stack: 20% + RAT + 5.8%, applied not only to the salary but also to the 13th salary and vacation pay, including the constitutional bonus (Brazilian Supreme Court, Theme 985).
For a foreign company planning a Brazilian hire, this is usually the single most important budgeting variable: the same R$5,000 salary costs about R$6,450 per month under Simples Nacional and about R$8,110 under Lucro Presumido.
Cost reference table
Total monthly employer cost by gross salary, excluding negotiated benefits, assuming a 2% RAT rate:
| Gross salary | Total cost — Simples Nacional | Total cost — Lucro Presumido/Real | Multiplier (LP) |
|---|---|---|---|
| R$1,621.00 (minimum wage) | R$2,091.09 | R$2,629.35 | 1.62× |
| R$3,000.00 | R$3,870.00 | R$4,866.17 | 1.62× |
| R$5,000.00 | R$6,450.01 | R$8,110.29 | 1.62× |
| R$10,000.00 | R$12,900.00 | R$16,220.56 | 1.62× |
Costs beyond the monthly payroll
Termination without cause triggers a 40% penalty on the entire accumulated FGTS balance, plus indemnified notice of 30 days increased by 3 days per year of service (capped at 90), plus pro-rated vacation and 13th salary. Prudent employers accrue an extra 4% of salary per month to cover the FGTS penalty alone.
Also budget for mandatory occupational health exams on hiring, periodically and on termination, plus equipment, training and the administrative cost of running Brazilian payroll — eSocial reporting, union agreements and annual collective-bargaining adjustments, which frequently raise salaries above inflation in the month set by each category’s agreement.
Many foreign companies avoid setting up a Brazilian entity by hiring through an Employer of Record, which typically charges a fee on top of the fully loaded cost shown here. The statutory charges themselves do not change — only who administers them.
Frequently asked questions
What is the total employer cost of hiring in Brazil?
Roughly 1.29× the gross salary for companies under the Simples Nacional regime and 1.62× for companies under Lucro Presumido or Lucro Real, before negotiated benefits. Adding transport, meal and health benefits typically brings the loaded cost to 1.5–1.9× the salary.
What is FGTS and who pays it?
FGTS is a severance fund equal to 8% of gross pay, deposited monthly by the employer into an account in the employee’s name. It is never deducted from the employee. On termination without cause the employer additionally pays a 40% penalty on the accumulated balance.
Why is the 13th salary in the calculation?
Brazilian law requires a 13th monthly salary paid in two installments, in November and December. Because it is mandatory and predictable, the standard accounting practice is to accrue one twelfth of salary each month, which is how this calculator treats it.
Do these charges apply to contractors (PJ)?
No. A genuine service contract with an incorporated contractor costs only the invoice amount. But if the relationship shows subordination, exclusivity and fixed hours, Brazilian labor courts can reclassify it as employment and charge all back contributions with penalties and interest.
Sources
Estimates based on Brazilian legislation in force in 2026 (Laws 8,036/1990 and 8,212/1991, Complementary Law 123/2006 and Supreme Court Theme 985). Third-party levy rates vary by sector and the RAT rate is adjusted by each company’s FAP multiplier. Confirm with a Brazilian accountant before making hiring decisions.
Related calculators
Also available in Portuguese: Calculadora de Custo de Funcionário para a Empresa (2026)