Hiring in Brazil: CLT, PJ or Foreign Contractor

A foreign company has four main ways to hire people in Brazil: hire under the CLT (formal employment) through its own Brazilian company; hire under the CLT through an employer of record (EOR), which is the formal employer on your behalf; hire the person as a PJ (a company providing services); or pay a contractor directly from abroad. The choice depends on how many people, for how long and how much control you have over the work, because Brazilian law looks at the reality of the relationship, not the name of the contract.

The four options

Option	Need a company in Brazil?	Cost	Risk
CLT through your company	Yes	Salary + charges and provisions	Low, if done right
CLT through an employer of record (EOR)	No	Salary + charges + EOR fee	Low
PJ (legal entity)	Not necessarily	Contract amount	High, if the relationship is employment
Contractor paid from abroad	No	Contract amount	Medium, depends on the relationship

CLT: how formal employment works

The CLT (Consolidation of Labor Laws) and the Constitution guarantee employees, among other rights:

• 13th salary: one extra salary per year, paid in two parts by December;
• 30 days of paid vacation per year, with a bonus of one third of the salary;
• FGTS: a monthly deposit of 8% of the salary into an account linked to the worker;
• INSS contributions (social security), paid by the company and the employee;
• notice period and a 40% penalty on the FGTS balance in dismissals without cause;
• a standard working week of up to 44 hours.

How much a CLT employee costs

The cost goes beyond salary. According to an employee cost guide published by ValorFinal in 2026:

• provisions for the 13th salary, vacation and the vacation bonus, plus FGTS, add about 27% on top of salary under any tax regime;
• companies outside Simples Nacional also pay 20% employer INSS, workplace accident insurance (1% to 3%) and third-party contributions (about 5.8%);
• in total, the cost runs around 50% to 60% above gross salary, before benefits such as meal vouchers and health insurance.

Companies with a foreign partner cannot opt for Simples Nacional, so they generally pay the full bill. See how to open a company in Brazil as a foreigner. Do the exact math with your accountant, because collective bargaining agreements for each category may add salary floors and benefits.

The national minimum wage in 2026 is R$ 1,621 per month. Qualified technology, sales and marketing professionals earn well above that.

Employer of record (EOR)

An EOR is a Brazilian company that hires the professional under the CLT on your behalf: it is the formal employer, handles payroll, taxes and obligations, and charges a monthly fee per person. For companies just starting in Brazil, it is the fastest way to have employees with legal certainty, without opening a company. It gets expensive as the team grows, and then having your own company usually pays off.

PJ: the shortcut with risk

Hiring as a PJ is common in Brazil, especially in tech: the professional opens a company and issues a nota fiscal for the services. The cost is lower and the relationship more flexible.

The risk: if, in practice, the relationship has the features of employment defined in the CLT (personal, habitual, subordinate and paid work), the Labor Courts may recognize an employment relationship and order the company to pay all rights retroactively. Warning signs:

• fixed hours and time tracking;
• direct subordination, like an employee;
• exclusivity and working only for you, indefinitely;
• benefits identical to employees'.

PJ hiring is also under discussion at Brazil's Supreme Court. Use PJ for genuinely independent providers and consult a labor lawyer.

Contractor paid from abroad

Your foreign company can hire a Brazilian professional or company as a service provider and pay from abroad. For the provider, this is usually an export of services, with its own tax treatment. It is a good solution for freelancers and projects, but the same employment rules apply: if the relationship looks like employment, there is risk.

Which to choose

Situation	Most common option
Testing the market with 1 or 2 people	EOR or contractors
Freelancers and fixed-term projects	Contractor (PJ or from abroad)
A permanent team of several employees	Your own company with CLT
Long-term local salesperson or manager	CLT (via EOR or your own company)

Summary

Hiring in Brazil means looking beyond salary: charges, guaranteed rights and the risk of an employment relationship. To start, an EOR and contractors give you speed. For a stable team, a Brazilian company with CLT contracts is the safest path. Before building the team, define the structure with an accountant and lawyer. If you want help planning your operation in Brazil, talk to BrazilDoor. And if you are still deciding your entry model, see can you sell in Brazil without a local company?.