Social security contributions in detail
Social security taxes cover the public healthcare system and pensions for medical leaves, disability and retirement. Employers must pay social security of between 26.8% and 31.8% of the employee’s remuneration and must pay 8% of the employee’s remuneration into the guaranteed severance fund, the ‘Fundo de Garantia de Tempo de Serviço’ or ‘FGTS’. If an employee’s contract is terminated without cause, the employer must pay a fine of 50% of the balance of the FGTS account, of which 40% is paid to the employee and 10% to the government. Employees must pay social security according to progressive rates (8% to 11% of the monthly remuneration), limited to 11% of the highest salary provided for in the legislation; in practice, that top salary amount is BRL 5,645.80.
Author: Veirano Advogados
Date: April 2020
Note: All currency conversions into EUR were made on 1 February 2019, using a mid-market rate.