When I was building the employer cost calculator and entering the data for Brazil, I had to double-check the numbers three times. I was convinced I had made an error. I had not.
On a $60,000 gross salary, total employer costs in Brazil run approximately $84,000–$100,000 per year — an overhead of 40–68% above gross salary. For comparison: the US adds ~9%, Germany ~23%.
| Contribution | Rate | Ceiling | Amount |
|---|---|---|---|
| INSS — Social Security | 20% | None | $12,000 |
| RAT/FAP — Work Accident | 1–3% | None | ~$1,800 |
| Sistema S (SESC, SENAC, SENAI etc.) | ~5.65% | None | ~$3,390 |
| FGTS — Severance Fund | 8% | None | $4,800 |
| FGTS dismissal provision | ~4% | None | ~$2,400 |
| Total contributions | ~$24,390 | ||
| Total annual employer cost | ~$84,390 |
Every Brazilian employee has an FGTS account — a mandatory severance savings fund where the employer deposits 8% of gross salary every month. When you dismiss someone without cause, you pay a 40% penalty on the entire FGTS balance accumulated over employment. For a five-year employee at $60,000, that penalty alone is $9,600 — on top of all other termination costs.
Brazil mandates a full extra month's pay every year. If you hire someone at $5,000/month, you owe $65,000 in salary annually — not $60,000 — plus all contributions on top.
| Country | Employer overhead |
|---|---|
| Brazil | 40–68% (highest) |
| Colombia | ~52% |
| Mexico | ~32% |
| Argentina | ~26% |
| Chile | ~2–3% |
Compare Brazil against any other country — side by side, contribution by contribution.
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