Is it better to contract or be employed in Brazil?

At $100/hour against a salaried equivalent of $70/hour, 40 hours a week, contracting nets more than employment in Brazil: a contractor keeps about $159,280 against an employee's $116,480, a difference of $42,800. The break-even rate — where the two are equal — is about $73/hour. CLT employment is heavily taxed; a PJ/Simples Nacional company makes contracting cheaper.

What hourly rate do I need to charge in Brazil?

To take home $100,000 a year after tax, health cover and unpaid time, you need roughly $84/hour, or a day rate around $675. That assumes $121,429 of gross revenue across 1440 billable hours.

Why is the contractor tax rate in Brazil different from the employee rate?

A contractor usually pays both halves of social contributions where an employer would otherwise pay one, and often buys health cover privately. Here that works out at about 17% effective for a contractor against 20% for an employee. CLT employment is heavily taxed; a PJ/Simples Nacional company makes contracting cheaper.

How accurate are these Brazil figures?

These are single blended effective rates, not a bracket-by-bracket calculation, and Brazil is outside the OECD series this site cross-checks against. Real liability depends on your regime, deductions and region. Estimates for comparison, not tax advice.

Contracting · Brazil

Contractor or employee in 🇧🇷 Brazil?

At $100/hour, contracting nets more than employment — the break-even rate is about $73/hour.

Side by side at $100/hour

	Contractor	Employee
Gross	$192,000	$145,600
Tax	$30,720	$29,120
Health insurance	$2,000	—
Net	$159,280	$116,480
Effective rate	17%	20%

CLT employment is heavily taxed; a PJ/Simples Nacional company makes contracting cheaper. Run your own rate in the interactive calculator.

To take home $100,000 a year

You need to charge about $84/hour (day rate $675), billing 1440 hours across the year for $121,429 of gross revenue.

Change the target in the required-rate calculator.

Countries with a similar contracting premium

🇭🇺 Hungary — +5% for contracting
🇦🇪 United Arab Emirates — +10% for contracting
🇸🇦 Saudi Arabia — +10% for contracting
🇮🇳 India — +12% for contracting

Questions

Is it better to contract or be employed in Brazil?: At $100/hour against a salaried equivalent of $70/hour, 40 hours a week, contracting nets more than employment in Brazil: a contractor keeps about $159,280 against an employee's $116,480, a difference of $42,800. The break-even rate — where the two are equal — is about $73/hour. CLT employment is heavily taxed; a PJ/Simples Nacional company makes contracting cheaper.
What hourly rate do I need to charge in Brazil?: To take home $100,000 a year after tax, health cover and unpaid time, you need roughly $84/hour, or a day rate around $675. That assumes $121,429 of gross revenue across 1440 billable hours.
Why is the contractor tax rate in Brazil different from the employee rate?: A contractor usually pays both halves of social contributions where an employer would otherwise pay one, and often buys health cover privately. Here that works out at about 17% effective for a contractor against 20% for an employee. CLT employment is heavily taxed; a PJ/Simples Nacional company makes contracting cheaper.
How accurate are these Brazil figures?: These are single blended effective rates, not a bracket-by-bracket calculation, and Brazil is outside the OECD series this site cross-checks against. Real liability depends on your regime, deductions and region. Estimates for comparison, not tax advice.

Estimates for comparison, not tax advice. Effective rates are blended, not bracket-by-bracket except where noted, and every country has regimes and deductions a single rate cannot express.