Hiring Remote Software Engineers in Brazil: 2025 Guide for US Companies
Brazil’s booming tech sector, large talent pool, and (mostly) English-speaking workforce make it an attractive nearshore destination for US companies. However, hiring Brazilians (especially under the formal CLT labor regime) involves unique legal and administrative rules. This 2025 guide covers everything US employers need to know, from salaries and benefits to contracts, taxes, data privacy, and more, complete with up-to-date statistics and references to official/regulatory sources.
For more information on hiring remote software engineers, refer to our guide on where to hire LATAM developers.
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Brazilian developer salaries are far lower than US levels, but include generous mandated benefits. For example, Payscale reports a Software Developer in Brazil averages R$79,764/year ($15k USD), while a broader Software Engineer role averages R$120,791 (~$22k). (By contrast, the US average is ~$118k to $187.) Glassdoor suggests São Paulo software engineers make ~R$11k–12k/month ($2k) on average. Even senior Brazilian devs typically earn under $50k/year locally. Software developer salaries in Brazil vary by city and experience: São Paulo and Rio tend to be highest. Regardless, Brazilian compensation includes mandatory extras:
In practice, US companies negotiating Brazilian salaries should account for these extras. For example, hiring a R$80k/yr engineer actually costs ~R$104k with taxes and FGTS. To compete, Brazilian firms often offer additional perks. Common benefits include private health insurance (voluntary but widely provided), meal or food vouchers (often required by union agreements in urban areas), and transportation allowances (“vale-transporte”) for commuting. Note that paid time off (vacation, sick, parental leave, etc.) is generously mandated (see below). Overall, local Brazilians earn 30–50% less than US peers even after extras, a major cost-saving for US employers.
Brazil’s labor system is governed by the CLT (Consolidação das Leis do Trabalho) and the 1988 Constitution, which strongly favor employees. All formal employees (CLT hires) are covered by detailed statutory rights on pay, hours, and dismissal. Employers must execute written contracts complying with CLT rules, including mandatory 13th salary, vacation, FGTS deposits, and social contributions. There is no “at-will” employment: termination without cause triggers hefty severance (next section).
For compliance, note that any attempt to disguise an employment relationship (for example, paying a CLT worker as an independent contractor to avoid taxes) can backfire in labor court. Brazilian law treats the “degree of subordination” as key: if a worker is treated like an employee (set schedule, fixed deliverables, reporting obligations), courts may reclassify them as a CLT employee anyway. Independent contractors (known as pessoa jurídica or “PJ”) are governed by civil law; they owe their own social taxes and have no entitlement to FGTS, vacations or 13th salary. US companies often engage Brazilians as contractors/PJs to reduce costs, but should only do so if the relationship truly meets contractor criteria. In practice, many tech workers are hired on CLT payroll to ensure full compliance, with an Employer-of-Record (EOR) handling local payroll and HR obligations.
Under Brazilian law you can hire Brazilians under:
Key considerations: Brazil forbids forced full-time exclusivity for contractors. Any work arrangement that resembles employment (fixed schedule, using employer tools, etc.) should be done via CLT to avoid litigation. Also note that under CLT, probation (“experience period”) can be up to 90 days (see below). All contracts must be in Portuguese. Collective bargaining agreements (at the industry or regional level) can override default rules – for example, mandating meal vouchers or setting union-negotiated raises. US firms should review any applicable CBA (e.g. a “sindicato” for IT workers). Finally, contracts (CLT or PJ) should have clear IP and confidentiality clauses to secure software ownership (see IP section below).
Brazil’s CLT sets a normal workweek at 44 hours. In practice, this often means eight hours/day Monday–Friday plus a half-day Saturday (8×5 + 4h Saturday = 44h), or eight-hour shifts six days a week (48h was old law, CLT now caps at 44h/week in total). Many tech companies operate on a 40-hour (five-day) schedule, but legally up to 44 is allowed. Employers can request up to 2 hours extra per day as overtime; such overtime must be paid at 150% of the normal hourly rate (i.e. +50%). Work done on a Sunday or official holiday must be paid at 200% (double pay). By law, employees must have at least an 11-hour break between workdays and one full rest day per week (usually Sunday). Brazilian law also mandates at least a one-hour unpaid lunch break (breaks under 4h are 15 minutes).
Typical Brazilian tech work hours are similar to US companies, but managers must approve any overtime and account for overtime pay. Some companies use banco de horas (hour-bank) agreements allowing time off in lieu instead of immediate overtime pay, but this must be formalized. Note that CLT employees get paid time off (sick leave, vacation, etc.) instead of accumulating PTO in lieu.
Brazil observes roughly 12 national holidays each year (plus many regional/city holidays). Key national days include New Year’s Day (Jan 1), Tiradentes Day (Apr 21), Labor Day (May 1), Independence Day (Sept 7), Our Lady of Aparecida (Oct 12), All Souls’ Day (Nov 2), Republic Proclamation Day (Nov 15), and Christmas (Dec 25).
Carnival (February/March) and Corpus Christi (May/Jun) are widely observed (lots of businesses close for the whole week of Carnival) even though only Good Friday is a legal holiday nationwide.
In addition, cities and states often have regional holidays: e.g. São Paulo’s Revolution Day on July 9, Amazonas Day in June, or Afro-Brazilian “Black Awareness Day” on Nov 20 (recognized in many states). (In practice, some companies give extra days off or floating holidays for these observances.) Employers should obtain each hire’s location and check local calendars.
Brazilian law guarantees generous leave. After 12 months of employment, a worker earns 30 calendar days of paid vacation. The employer decides when vacation is taken (during the following 12 months), but must allow at least one 14-day consecutive break per year Vacation pay includes the extra 1/3 salary bonus (paid 2 days before leave starts). Employers may allow splitting vacation into up to 3 periods (one of at least 14 days, others at least 5 days). Employees with unexcused absences accrue proportionally fewer days (down to 12 days if >24 absence days). Up to 10 of the 30 vacation days can be “sold” by the employee (? of vacation) back for cash; otherwise they must take at least 20 days off.
Sick leave is also mandated: employees are entitled to 15 days of paid sick leave per illness. (Employers pay salary for the first 15 days of any medical leave. From day 16 onward, the National Social Security Institute (INSS) pays disability benefits instead.) There is no cap on total sick days, chronic illness beyond 15 days is covered by public benefits.
Other leave: Brazilian law also grants 5 days of paid bereavement leave, paid by the employer, for a death in the immediate family; this typically runs from 2 to 5 days based on circumstances. Paternity leave is 5 days for fathers (paid by employer), extendable up to 20 days in some companies or with union agreement. Mothers get 120 days (4 months) of paid maternity leave (paid through social security) with job guarantee; many large employers voluntarily grant 6 months. (Maternity leave can start up to 28 days before due date.) Adoptive parents get the same leave rights as birth parents. Voting leave is not mandatory (Brazil only has elections periodically). All these leaves count as paid leave in CLT contracts.
Brazil offers extensive parental leave. Female employees are entitled to 120 days of paid maternity leave (extendable to 180 days with employer agreement), paid by INSS. The first 120 days are fully covered (the employer is reimbursed by social security via payroll reporting). Mothers enjoy job protection from pregnancy through 5 months after birth. Paternity leave is 5 days by default (paid by the employer), though some companies offer up to 20 days as a benefit. Adoptive mothers/fathers get the same leave duration as birth parents. Note: employees on maternity leave cannot be terminated except for extreme cause.
CLT contracts may include an experience (probation) period. The maximum probation is 90 days total. This can be one 90-day term or two sequential 45-day terms (commonly written as “45+45”). During probation, the employer can terminate with just cause or mutual agreement with minimal notice (see below).
For terminations without cause, Brazilian law requires advance notice: at least 30 days plus 3 additional days for each year of service, up to 90 days total. The notice can be worked or paid out. All final pay (unpaid salary, accrued vacation with bonus, 13th-salary pro-rata) must be paid at termination. If notice is not given, the employer must pay the equivalent salary in lieu. Termination for just cause (severe misconduct, e.g. fraud or serious breach of duty) is allowed without notice, but forfeits many severance entitlements (the employee keeps earned wages, vacation/13th up to date, and FGTS deposits but without any penalty pay).
A CLT dismissal without cause triggers substantial severance. In addition, to notice pay (see above) and any unused leave, the employer must pay a FGTS withdrawal indemnity of 40% on all FGTS balances (the 8% monthly deposits) accrued during employment. For example, if 8% of each salary (plus interest) totals R$20,000 in FGTS when someone is fired, the employer pays an extra 40% of R$20k (i.e. R$8k) into the employee’s FGTS account at termination. (If the parties agree to terminate by mutual consent, this penalty is 20% instead) Severance also includes any proportional 13th-salary and accrued vacation plus 1/3. Employers must issue a written Termination Letter and pay all amounts in cash immediately. If a CLT employee is dismissed and the employer fails to comply with these rules, the worker can sue for reinstatement or double damages.
For fixed-term contracts, if the employer ends it early without just cause, the employer must pay 50% of remaining wages as a penalty.
Brazilian law allows non-compete clauses, but only after employment ends (during employment a non-compete is invalid). For a post-employment covenant to hold, it must be reasonable and limited: typically no more than 24 months, with clear geographic scope and restricted activities. Crucially, any non-compete must include compensation to the worker during the restricted period. Courts generally require that compensation equal the employee’s normal salary for each month restricted. In practice, this means an employer promising an ex-employee 12 months of salary (or half-salary per month, etc.) in exchange for a year of non-compete. Without such compensation, non-competes can be struck down. (By contrast, confidentiality/trade secret clauses are always enforceable: Brazil’s Industrial Property Law makes it illegal for ex-employees to disclose a former employer’s secrets under pain of unfair competition.)
When paying Brazilian workers, US companies face specific tax rules. If hiring via a Brazilian entity/EOR, the employer simply deducts Brazilian payroll taxes: the employee’s INSS (7.5–14% progressive PIT) and employer’s INSS (~20%), plus the FGTS deposit (8%). The EOR also withholds Brazilian income tax on salaries (up to 27.5% progressive) and remits it to Receita Federal. US employers without a local entity who pay Brazilians as contractors must consider withholding tax (IRRF) on foreign service payments: Brazil generally imposes 15% withholding on fees paid to nonresident companies or individuals (25% if in a tax-haven). (For example, if a US firm hires an independent Brazilian contractor without an EOR, the US firm must withhold IRRF and send it to Brazil on behalf of the contractor unless the payments meet one of the treaty exemptions.)
Brazil also levies an IOF tax on foreign exchange operations. Any international money transfer into Brazil (e.g. sending USD to pay a Brazilian) can incur IOF (often 0.38% for service transfers). Companies should use licensed financial intermediaries or bank transfers in compliance with Central Bank rules.
Brazil enacted the LGPD (Lei Geral de Proteção de Dados, Law 13,709/2018) in 2020, mirroring the EU’s GDPR. It covers any processing of Brazilian personal data, regardless of where the company is based. Hiring Brazilian developers means handling sensitive data (ID documents, payroll info, medical leave records, etc.) subject to LGPD. US employers must ensure lawful processing (consent or legal basis), inform employees of data use, and secure data. Importantly, cross-border transfers of personal data from Brazil to the US require compliance measures (e.g. the US company must have appropriate safeguards or rely on an approved framework). For instance, sending Brazilian payroll data or storing resumes on US servers triggers LGPD obligations. Many companies appoint a local DPO or use an EOR that maintains Brazilian data centers for HR. In summary, treat Brazilian employee data carefully: a breach of LGPD can result in fines up to 2% of revenue (capped at R$50M) and orders to delete data.
Intellectual property created by developers must be carefully managed. Under Brazilian law, an employee owns the creations they make unless the contract says otherwise. In other words, without an explicit assignment, code or inventions developed on the job could legally belong to the developer. To avoid this, US companies should include robust IP assignment clauses in Brazilian contracts. Often this takes the form of a “PIIA” (Proprietary Information and Inventions Assignment) or similar agreement, transferring rights to the employer for any work output. (These agreements are common and enforceable in Brazil, provided they don’t excessively restrict the worker beyond the job’s scope.) Likewise, confidentiality/non-disclosure clauses should be included to protect trade secrets.
Brazil also has a specific “Industrial Property Law” that criminalizes unauthorized use of a former employer’s confidential information indefinitely. This means you don’t need a separate non-compete to keep trade secrets, the law itself does that. However, general IP created (software, patents, designs) must be explicitly assigned. In short: always have Brazilians sign an IP assignment/“PIIA” agreement during onboarding to ensure your US company retains ownership of all code and inventions.
Because Brazil controls currency flows, paying a Brazilian can involve forex considerations. Employers typically pay remote developers in BRL (local currency) into a Brazilian bank account. Using services like Wise or PayPal incurs IOF tax on currency conversion, but allows avoidance of more bureaucratic bank remittances. Note that Brazilian law requires each remittance to be registered with the Central Bank (usually handled by banks or payroll vendors). Companies can also pay in USD if the Brazilian has a US-dollar account; that avoids IOF but the worker then deals with currency conversion themselves. Under CLT employment, wages must be paid in BRL into a Brazilian account according to labor law (payments in USD could violate local rules).
Key point: Cross-border payments are another compliance headache. CloudDevs streamlines this by handling all currency exchange and IBAN transfers. They pay Brazilians in local currency on your behalf and handle IOF reporting.
Brazil has a strong union tradition. Until 2017, employers and employees were required to pay a yearly union dues (one day’s salary), a major union revenue source. However, recent labor reforms made most union contributions voluntary unless specially ratified by union assemblies. Many Brazilians still belong to labor unions (sindicatos), and collective bargaining agreements (CBAs) remain influential. For example, software developers may be covered by a CBA for the IT or commerce sector in their state. These CBAs can set minimum raises, health insurance contributions, meal voucher mandates, etc.
As a practical matter, US companies hiring Brazilians should be aware that: they cannot unilaterally impose changes to a unionized group, and must respect CBA terms (often automatically extended to all workers in the category). Unions in the tech sector are less militant than in manufacturing, but still active.
Hiring Brazilian software engineers offers great advantages, skilled talent in close time zones and at competitive rates of $45 to $75 per hour if you hire through CloudDevs. They simplify the entire process of CLT regulations on pay, hours, benefits, and termination; payroll tax remittance; LGPD data rules; IP assignment and more. With CloudDevs you get pre-vetted Brazilian developers and full employment services in one platform.
In short, CloudDevs bridges the gap between US companies and Brazilian talent. Simply schedule a call with us here and dive into your remote software engineer hiring process.
