Address:
Av. Marques de São Vicente, 230 - Conjunto 1220, Barra Funda - São Paulo, SP - Brazil, 01141-010
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+55 11 2386-7976
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The cost of an Employer of Record in Brazil has three parts: the employee’s gross salary, the mandatory employer charges and benefits, and the EOR’s service fee. Charges are large in Brazil, so the real cost per employee is well above the salary alone.
What makes up the total cost?
- Gross salary
- Employer social security contribution (INSS), plus accident insurance (RAT) and third party contributions, depending on the company’s regime and activity
- FGTS: 8% of gross salary
- 13th salary provision: 8.33% of annual salary, spread monthly
- Vacation provision: 11.11% (8.33% plus the one third bonus)
- Benefits required by law or union agreements, such as transport vouchers, meal vouchers and health plans
- The EOR service fee
How do EOR providers charge?
Common models are a flat monthly fee per employee or a percentage of payroll. Some providers add a setup fee or charge for termination support. Always compare what is included, not only the headline fee.
What should you ask before signing?
- Which charges are passed through at cost and which include a markup?
- Is the fee flat or tied to salary level?
- Who pays notice and the 40% FGTS penalty at termination?
- Is benefits administration included?
- Are payroll reports delivered in English?
- What is the minimum contract term?
Is an EOR cheaper than a subsidiary?
It depends on headcount and time horizon. For one or a few employees, an EOR usually avoids the fixed cost of local accounting, legal and payroll. As the team grows, those fixed costs spread out, so compare both options over 12 to 24 months.
Do not forget termination costs
Dismissal without cause brings notice, a 40% penalty on the FGTS balance and proportional payments. Budget for them from the start, whichever model you choose.
Frequently asked questions
Does the EOR fee include payroll taxes? Usually not. Payroll taxes and charges are separate from the service fee, so ask for a full cost breakdown.
Is there a standard fee? Fees vary by provider, scope and salary level. Request a written breakdown instead of relying on averages.
Want a clear cost breakdown for your first hire in Brazil? Gescon’s PEO/EOR team can prepare one. Visit our services page to get started.
