Table of contents
- What an Employer of Record does in Brazil
- Why US startups use an Employer of Record in Brazil
- Step by step: How to hire through an Employer of Record in Brazil
- Compliance and legal obligations under CLT
- EOR pricing and service levels
- Common mistakes when hiring in Brazil
- Why companies choose Howdy.com as their Employer of Record partner
- Frequently asked questions
- Conclusion
Hiring engineers in Brazil is a smart move for US startups that want top-tier talent without opening a local entity. Brazil’s developer pool is large, skilled, and English-proficient. The country graduates tens of thousands of STEM professionals each year, making it one of Latin America's most competitive engineering markets.
That’s why US startups use Employer of Record (EOR) services in Brazil — to hire legally and scale faster. They let you hire Brazilian engineers legally and compliantly so you can focus on growth.
This guide explains how an Employer of Record works in Brazil, how to stay compliant under Consolidação das Leis do Trabalho (CLT), and what to expect when managing payroll for Brazilian engineers. If you’re wondering how an Employer of Record actually works in Brazil, this guide explains each step — from CLT compliance to payroll and offboarding.
What an Employer of Record does in Brazil
An Employer of Record (EOR) is a third-party organization that legally employs workers on your behalf. In Brazil, the EOR signs local contracts, runs payroll in reais (BRL), manages taxes, and ensures benefits comply with CLT.
Example: If your US team hires a senior developer in Brazil through Howdy.com, Howdy becomes that developer’s legal employer under Brazilian law. You retain full control over projects and schedules while Howdy handles compliance and payroll filings.
In short, an Employer of Record in Brazil serves as your local employer of record, handling all employment obligations so you can scale your engineering team confidently and compliantly.
Why US startups use an Employer of Record in Brazil
Brazil’s tech ecosystem has matured rapidly. Skilled engineers, competitive costs, and time zone alignment with the US make it a strong nearshore option.
Setting up a Brazilian entity, however, can take months and requires:
- Corporate registration with the CNPJ (national registry)
- Legal representation by a local resident
- A local bank account and accountant
- Payroll systems integrated with eSocial, the government reporting platform
An Employer of Record bypasses those steps. It acts as your legal employer in Brazil so you can hire and onboard engineers in weeks instead of months.
Developers also value the stability of CLT-compliant contracts, which provide benefits and legal protections not found in short-term agreements.
For US startups, an Employer of Record in Brazil offers a faster, fully compliant path to building local engineering teams.
Step by step: How to hire through an Employer of Record in Brazil
Step 1. Identify your talent needs.
Decide which roles you plan to fill in Brazil—engineering, design, QA, or operations. EORs like Howdy specialize in connecting companies with vetted professionals across LatAm.
Step 2. Draft compliant employment contracts.
All contracts follow CLT standards and outline job descriptions, salaries in BRL, benefits, and notice periods.
Step 3. Set up payroll and onboarding.
The EOR registers employees with government agencies, manages tax IDs (CPF and PIS), and ensures enrollment in health and pension programs.
Step 4. Manage monthly payroll.
The EOR calculates income tax (IRRF) and manages contributions to INSS (social security) and FGTS (unemployment fund). Salaries are paid in BRL, with detailed reports for your finance team.
Step 5. Stay compliant and track reporting.
The EOR monitors labor law updates and handles filings through eSocial. You receive monthly compliance summaries without hiring local accountants or legal counsel.
Step 6. Handle offboarding and transitions.
If a contract ends, the EOR manages notice, severance, and termination paperwork under Brazilian law.
This step-by-step EOR process makes hiring in Brazil simple and compliant, giving startups immediate access to skilled engineers under Brazilian labor law.
Compliance and legal obligations under CLT
Brazil’s CLT labor code sets strict standards for working conditions, benefits, and taxation. A compliant Employer of Record ensures adherence to:
- Working hours and holidays: 44-hour workweek with at least one rest day.
- 13th-month salary: An extra month’s pay each December, in two installments.
- Paid vacation: 30 days of paid leave plus one-third salary bonus.
- Social contributions: Payments into INSS, FGTS, and severance reserves.
- Health and benefits: Private health insurance and meal vouchers (vale refeição) are standard expectations.
- Data protection: Compliance with LGPD and international frameworks such as SOC 2 and ISO 27001.
A trusted Employer of Record in Brazil ensures total CLT compliance, accurate payroll, and risk-free hiring.
EOR pricing and service levels
Employer of Record pricing in Brazil typically ranges from $400 to $700 per employee per month, depending on scope and benefits.
Most EOR contracts include:
- Employment setup and onboarding
- Payroll processing and tax remittance
- Benefits administration
- Compliance management
- HR and employee support
When comparing providers, review:
- Contract duration and exit clauses
- Response times for payroll or benefits questions
- Handling of bonuses, commissions, and reimbursements
Choosing the right Employer of Record in Brazil means balancing transparent pricing, complete compliance, and dedicated local support for your engineering team.
Common mistakes when hiring in Brazil
- Using contractor agreements for full-time roles (risking reclassification and penalties).
- Ignoring local benefits expectations such as private healthcare.
- Paying in USD without a compliant intermediary.
- Missing eSocial reporting deadlines, which can delay payroll processing.
Avoiding these hiring mistakes helps US startups stay compliant, maintain payroll accuracy, and build long-term, CLT-protected engineering teams in Brazil.
Why companies choose Howdy.com as their Employer of Record partner in Brazil
Howdy.com provides Employer of Record services across LatAm, with a Brazil-based compliance and operations team.
With Howdy, you get:
- CLT-compliant hiring for engineers, designers, and operations talent.
- Transparent payroll in BRL and USD reporting.
- Integrated benefits and health coverage through local partners.
- Multilingual account managers in English and Portuguese.
- Smooth transitions if you later open a local entity.
By partnering with Howdy.com as your Employer of Record in Brazil, you gain a compliant, scalable foundation for hiring and retaining elite engineering talent across Latin America.
Frequently asked questions about Employer of Record services in Brazil
How does an Employer of Record work for a US startup hiring engineers in Brazil? An EOR becomes the legal employer, managing payroll, benefits, and compliance. The US company directs daily work while the EOR handles local employment requirements.
How do you set up compliant payroll for Brazilian engineers through an EOR? The EOR registers employees, pays salaries in BRL, withholds taxes, and contributes to INSS and FGTS, providing transparent reporting each month.
Are Employer of Record services legal in Brazil? Yes. EORs operate as recognized intermediaries when they comply with CLT and register employees properly.
What benefits should Brazilian engineers receive? At minimum: 13th-month salary, paid vacation, INSS and FGTS contributions, meal or transportation vouchers, and health insurance.
How long does it take to hire through an EOR in Brazil? Usually one to two weeks after documentation is complete.
How much does an EOR cost in Brazil? EOR pricing in Brazil typically ranges from $400 to $700 per employee per month, according to Howdy.com data and 2025 industry benchmarks.
What are the tax obligations for US companies hiring in Brazil through an EOR? The EOR handles all local withholdings and remittances under Brazilian law. The US company records payments as a service expense, avoiding double taxation and ensuring full CLT compliance.
These FAQs address the most common questions about how Employer of Record services work in Brazil, covering payroll, compliance, and the benefits of EOR partnerships for US startups.
Conclusion
Employer of Record services in Brazil give US startups a fast, compliant way to hire engineers without opening a local entity. They combine speed, transparency, and reliability, helping teams focus on building products instead of managing paperwork.
Howdy.com provides Employer of Record services across LatAm, enabling compliant hiring, accurate payroll, and long-term team success.
Get Howdy as your EOR partner in Brazil
Book a demo with Howdy to start building your Brazil-based engineering team. For US companies expanding into Brazil, an Employer of Record offers the simplest, most compliant path to building high-performing, CLT-based engineering teams.