Employers in Brazil are required to contribute to Instituto Nacional do Seguro Social (INSS) for social security (generally 20% of salary), Fundo de Garantia do Tempo de Serviço (FGTS) at 8%, and pay for statutory benefits such as 13th salary, paid annual leave (30 days), and paid public holidays. Additionally, employers must provide maternity/paternity leave, sick leave, and ensure compliance with health and safety regulations.

Payroll taxes in Brazil include a 20% INSS employer contribution, 8% FGTS, and additional contributions to entities like SESI, SENAI, and others, which can add 5.8% to 8.8% depending on the sector. Employee INSS contributions are withheld on a progressive scale (7.5% to 14%), and income tax (Imposto de Renda Retido na Fonte - IRRF) is withheld at source based on salary brackets defined by Receita Federal.

Hidden costs include the mandatory 13th salary (Christmas bonus), vacation bonus (one-third extra salary during annual leave), and potential severance payments under the CLT regime, such as a 40% penalty on FGTS balances upon dismissal without cause. Employers should also budget for costs related to payroll administration, employee meal/transportation vouchers, and collective bargaining agreement obligations.

Brazilian law sets a national minimum wage (salário mínimo), currently updated annually, and enforces strict working hour limits (44 hours per week, with overtime paid at a minimum 50% premium). Termination rules under CLT require advance notice, severance, and compliance with collective bargaining agreements (Convenção Coletiva de Trabalho), which may stipulate higher benefits or wage floors.

Most employment contracts are governed by the Consolidação das Leis do Trabalho (CLT) and typically include a probation period (período de experiência) of up to 90 days. Customary benefits such as meal (vale refeição) and transportation (vale transporte) vouchers are widely offered, and fixed-term as well as indefinite contracts are both common depending on business needs.