Professional Employer Organization (PEO) in Brazil

What is a PEO? 

A PEO, also called a professional employer organization, is an outsourced service provider for human resources (HR) and administrative functions. A PEO takes on the burden of payroll, compliance, benefits, and more so startup and SME leaders can focus on growing their companies. 

PEOs allow businesses to gain access to benefits, tools, and processes they may not otherwise get. Using a PEO also enables your organization to avoid setting up an entity in Brazil or hiring a full HR team. The help of a PEO will guide your business in legally hiring Brazilian workers without ever visiting the country. 

PEOs ensure currencies and labor laws are correct for each worker, leaving you to stress less and focus more on scaling your business. 

Are you considering a PEO to make hiring easy in Brazil? Check out Skuad’s transparent pricing structure and schedule a demo to check out our easy-to-use platform.

What are the benefits of using PEO services in Brazil? 

There are many benefits of working with a PEO in Brazil, including having access to new opportunities and global expansion. A PEO is an optimal choice for ambitious and growing companies. 

Hire from the best of the Brazilian and global talent pool

Remote work has changed the workplace. You are no longer tied to sourcing talent locally, so why not expand it even further and source talent in Brazil? Business growth shouldn’t have limits, so allow your business to expand as much as possible with a PEO. 

Brazil is the largest country in South America and the 6th largest country in the world in terms of population. The untapped talent in Brazil is just waiting for you to recruit them! Start working with a PEO today so you can access the ambitious talent in Brazil who is eager to work with a growing business. 

Increase your competitive advantage 

When you increase your employer brand and are recognized as a global leader, talent will be vying for a spot with your company. A PEO in Brazil will have the expertise needed to offer a competitive benefits package to attract top talent while remaining 100% compliant with local Brazilian laws. 

Save on unnecessary costs 

Hiring Brazilian workers without using a PEO would be a costly endeavor. Not only would you have to go through the process of setting up a business in Brazil, but you’d need to hire lawyers and other professionals to help you make sure it was legally registered. 

Additionally, you can avoid hiring an internal HR team when you partner with a PEO. This will save on many costs associated with salaries, benefits, onboarding, and recruiting. 

Do you want to learn more? Contact Skuad today and speak with a helpful representative about how you can start doing business in Brazil. 

Learn new global markets 

Does your company have large goals of penetrating global markets in the future? Why not get started on learning those markets now with a PEO? 

You will learn the ins and outs of business culture in Brazil. You’ll also learn about communicating and other cultural nuances by working with Brazilian workers every day. This will prepare you for future global growth. 

Avoid setting up a new entity in Brazil 

If you don’t want to use a PEO, the only other option you have for hiring Brazilian workers is to establish a new entity in Brazil. Not only is this a timely and costly process, but it can take months to get through the process of Brazilian company registration. 

You would have to factor in costs associated with visiting Brazil regularly, hiring staff to manage the new entity, and lawyers to ensure compliance with local laws. 

On the other hand, working with a PEO eliminates that entire process. Most PEOs already have an entity established, so you can start hiring in Brazil in weeks, possibly even days. You meet all legal requirements when partnering with a PEO without having to worry about Brazil’s corporate tax rates or documentation. 

Improve cultural awareness 

If you want to succeed as a global business, you must understand the impact cultural differences make. And understand and navigate them with ease. You can make this a little easier to understand by having a PEO partner on hand with experts in Brazilian culture. 

For example, did you know that Brazil is broken up into 5 distinct identities and each has its own culture? Or that it’s not uncommon for meetings start late or rescheduled at the time they’re supposed to start? 

Remain compliant with Brazilian labor and employment laws 

There are many laws you must navigate when employing workers in Brazil. Not only do you need to understand payroll and Brazil tax rate guidelines, but you must comply with working hour guidelines and minimum wage requirements. 

Understanding the laws and requirements is a must if you want to succeed and avoid penalties and fines. Learn more about payroll and paid leave requirements below. 

Payroll 

Payroll is processed monthly and the currency is the Brazilian Real. A typical workweek is 44 hours and each day is capped at 8 hours. Overtime is for any hours over 8 each day and is paid at 150% of normal wages. For Brazilians working on holidays, they are entitled to 200% of their normal pay. 

Employer contributions: 

• 0% - Social Security (INSS)
• 8% - FGTS
• 5.8% - third party companies
• 45.59% - payroll taxes

Employee social security contributions: 

• 7.5%: 0 - 1,100 BRL
• 9%: 1,100.01 - 2,203.48 BRL
• 12%: 2,203.49 - 3,305.22 BRL
• 14%: 3,305.23 - 6,433.57 BRL

Brazil income tax rate for employees: 

• 0.00%: 0 - 1,903.98 BRL
• 7.50%: 1,903.98- 2,826.65 BRL
• 15.00%: 2,826.65 - 3,751.05 BRL
• 22.50%: 3,751.06 - 4,664.68 BRL
• 27.50%: 4,664.68 BRL and above

Paid leave

There are 13 paid public holidays in Brazil. Additionally, 23 regional holidays that may or may not be recognized. Employees are entitled to paid sick leave for 15 days from their employer and then the social security department pays. 

After a year of employment, employees get 30 days of paid time off. They can break these up into 3 periods if they wish. 

Maternity leave is 100% paid for 120 days with the option of a 4-week extension. Paternity leave is 5 paid days off. Newly married employees get 3 days of paid leave and those who need bereavement leave get 2 days. 

What does it cost to build a team in Brazil?

The costs associated with building a team in Brazil will depend on how you choose to do it. Incorporating a business will be more costly and require a longer time commitment than working with a PEO.  

Incorporating in Brazil 

Establishing an entity in Brazil as a foreigner is a complicated process. You must gain approval from the Brazilian Ministry of Development, Industry, and Foreign Trade. This requires a formal request to be sent with all necessary information. 

To form an entity in Brazil, you must have a unique fiscal address. This cannot be a virtual address. You must also have a Brazilian citizen or someone with a permanent Brazil Visa to serve as a company representative. There are also rules around how and what you can name your organization. 

The following steps are an overview of what is required to start a business in Brazil: 

• Write articles of association
• Register with the Board of Trade 
• Register for a company taxpayer number
• Register for a business license 
• Register with Inscrição Estadual
• Receive authorization for issuing “Notas Fiscais”
• Register with social security 

As you can see, incorporating in Brazil is a lengthy and complicated process. Save yourself time and effort by working with a PEO. 

Using a PEO in Brazil 

Pricing packages vary based on what option you choose. You can work with a PEO with prices starting at $19 a month per employee. Or you can choose to have an employer of record, which is a more complex type of employee management with packages starting at $199 a month per employee. 

Skuad gives businesses the option to start hiring for free and you can cancel at any time. So, why wait? Schedule a free demo today and check out our platform! 

Schedule a free demo today 

Are you ready to partner with Skuad to expand your global operations and hire top talent in Brazil? Allow us to help you maintain compliance with employment laws in Brazil so you can focus on more core business functions. Schedule a free demo today to see for yourself how easy it can be!