According to Pebl's employment agreement template, when is the salary due in Brazil?

Velocity Global Brazil does not specify a payment date in its employment agreement template for Brazil since it is not a legal requirement. However, the company typically pays salaries on the last business day of the month. According to Brazilian law, salaries must be paid by the 5th day of the subsequent month.

What date does the law specify salary must be paid in Brazil?

In Brazil, salaries can be paid either once monthly or in two installments. The first installment is usually 40% of the gross salary and must be paid in the middle of the month. The remaining amount must be paid by the 5th business day of the following month.

How is salary calculated and what components does it consist of in Brazil?

In Brazil, the calculation of salary includes the following components:

• Annual Multiplier: The annual salary is converted to a monthly salary using a multiplier of 13, as there is a 13th salary payment in Brazil.
• Commercial Payroll: A commercial payroll is utilized, meaning salary payments account for 360 days per year, or 30 days per month, regardless of whether a month has 31 or 28 days.

Is there a legal obligation to pay salaries in the same month in Brazil?

In Brazil, there is a legal requirement regarding the timing of salary payments. Monthly salaries must be paid by the 5th working day of the month following the due date. When calculating the 5th business day, Saturdays are included as business days, while Sundays and holidays, including municipal holidays, are excluded. Employers have the flexibility to change the payment date as long as it complies with this legal framework.

How many salary payments are made per year in Brazil?

In Brazil, 13 salary payments are made per year.

Is salary payment monthly and is payment standard at the end of the month in Brazil?

In Brazil, salaries can be paid either once monthly or divided into two installments:

• The first installment, which must be 40% of the gross salary, is paid in the middle of the month.
• The remaining amount must be paid by the 5th business day of the following month.

Velocity Global Brazil pays monthly at the end of the month.

Should the employment agreement in Brazil specify salary in monthly or annual amounts?

The employment agreement template used in Brazil lists the monthly gross salary.

What tax and social security obligations do employees have in Brazil?

In Brazil, any income earned by a Brazilian tax resident is subject to income tax, regardless of whether the source is domestic or international. Taxable income includes:

• Salaries
• Bonuses
• Commissions
• The cost of employer-provided housing
• Leave allowance
• Any tax equalization or reimbursement payments

However, certain allowances are tax-exempt in Brazil, such as the work-from-home and daycare allowances.

What are the details of the statutory bonuses and 13th/14th-month salary, including the local name and payment schedule?

In Brazil, employees receive a statutory year-end bonus known locally as the "13th month salary" or "Christmas bonus." This bonus is equivalent to one month's salary and is typically paid in two installments:

• The first installment is paid between February 1 and November 30.
• The second installment is paid before December 20, with half of the bonus disbursed in November and the other half in December.

The 13th month salary is calculated as 1/12 of the salary earned for each month of service within that calendar year.

Additionally, while not required by law, many employers in Brazil offer profit-sharing plans. Payments from these plans are considered non-taxable wages if they meet the following conditions:

• The plan is available to all company employees.
• The employer negotiates the plan with both employees and their labor union.

Under such profit-sharing plans, payments can be freely negotiated between employers and employees with a maximum of two payments allowed within the same calendar year.

What is the minimum wage information in Brazil?

Effective January 1, 2025, the minimum wage in Brazil is established as follows:

• BRL 1,518.00 per month
• BRL 50.60 per day
• BRL 6.90 per hour