Payroll in Brazil 2026: INSS, FGTS, IRRF and the 13th salary

In Brazil the employer withholds the employee's INSS, 7.5% to 14% on progressive slices, and the IRRF income tax, zero up to R$ 5,000 a month since 2026. On top it pays about 27% to 29% to the INSS and third parties outside the Simples Nacional, 8% FGTS, the 13th salary and holiday pay with an extra third.

This guide covers the rules in force in October 2026 for employees under the CLT, with amounts in Brazilian reais (BRL, written R$).

Payroll in Brazil at a glance

INSS, third parties and FGTS

Employee INSS. Since January 2026 (Portaria Interministerial MPS/MF 13/2026) each rate applies only to the slice of salary in its band:

Pay above R$ 8,475.55 carries no employee INSS, so the maximum is R$ 988.09 a month. Salaries from several jobs are added up to apply the bands, and the 13th salary is calculated separately, not added to December's pay.

Employer contributions under the general rules (Lei 8.212/1991, art. 22, and Lei 8.036/1990):

Simples Nacional. Small companies in the Simples Nacional pay the employer INSS inside the monthly DAS, as a share of revenue, except for the service activities taxed under Annex IV, which pay the 20% separately. Simples companies do not pay the third-party contributions. They still withhold the employee's INSS and IRRF and pay the 8% FGTS (Lei Complementar 123/2006, art. 13).

Income tax withholding (IRRF)

The employer withholds IRRF every month with the progressive table in force in 2026:

The tax base is the gross taxable pay minus the employee's INSS, R$ 189.59 for each dependant and other legal deductions such as court-ordered alimony. Instead, the employer can use the simplified monthly discount of R$ 607.20 (25% of the zero band) when it is more favourable. For a single employee without dependants, the simplified discount wins on salaries up to about R$ 5,755.

The 2026 reduction. Lei 15.270/2025 adds a reduction from January 2026, measured on the gross taxable income, not on the tax base:

• taxable income up to R$ 5,000.00: a reduction of up to R$ 312.89, so that the tax is zero
• from R$ 5,000.01 to R$ 7,350.00: a reduction of R$ 978.62 minus 0.133145 × the taxable income, falling in a straight line to zero
• above R$ 7,350.00: no reduction

The reduction can never exceed the tax from the table, and it also applies to the IRRF on the 13th salary, which is taxed on its own. In the annual return for 2026 the same relief works on annual figures: no tax up to R$ 60,000 of taxable income, phased out at R$ 88,200.

Minimum wage, working time and mandatory pay

• Minimum wage: R$ 1,621.00 a month from 1 January 2026, or R$ 54.04 a day and R$ 7.37 an hour (Decreto 12.797/2025).
• 13th salary (gratificação de Natal): one twelfth of December's remuneration for each month worked in the year, with 15 days or more counting as a full month. The first half is paid in a single instalment between February and November (or with the holidays, if the employee asks in January) and the balance by 20 December. It carries its own INSS and IRRF and 8% FGTS.
• Holidays (férias): 30 calendar days after each 12 months of employment, fewer if the employee had more than five unjustified absences, paid with at least one third extra (Constitution, art. 7, XVII) no later than two days before the holidays start (CLT, art. 145).
• Working time and overtime: a normal day of at most 8 hours and a week of 44 hours; overtime is paid at least 50% above the normal hour, and night work at least 20% above the day rate (CLT, arts. 59 and 73).
• Vale-transporte: the employer covers the cost of home-to-work transport above 6% of the basic salary, so up to 6% can be deducted from the employee (Lei 7.418/1985).

Monthly payroll calendar and filings

1. 1Hiring: report the admission to eSocial, the federal system that records all employment events, and agree on the payment account.
2. 2Payday: pay a monthly salary by the 5th business day of the following month (CLT, art. 459) against a signed pay receipt, the holerite or contracheque; a deposit into the employee's bank account also counts as a receipt (CLT, art. 464).
3. 3Every month, eSocial: send the remuneration and payment events of the month.
4. 4Every month, DCTFWeb: the declaration is built from the eSocial data (contributions on remuneration and IRRF on employment income) and filed by the last business day of the following month; the 13th salary DCTFWeb is due by 20 December.
5. 5By the 20th: pay the DARF generated by the DCTFWeb, covering employee and employer INSS, third parties and IRRF. If the 20th is not a banking day, pay on the previous business day.
6. 6By the 20th: pay the 8% FGTS through FGTS Digital, by Pix; if the 20th is not a banking day, pay on the previous business day.
7. 7During the year: pay holidays two days before they start, the first half of the 13th salary by November and the balance by 20 December.
8. 8Dismissal without cause: the employer deposits a further 40% of all the FGTS deposits made during the contract.

Worked example: R$ 6,000 a month

Marcos works in São Paulo for a trading company outside the Simples Nacional (third parties 5.8%, RAT 2% before any adjustment). He earns R$ 6,000 a month, is single and has no dependants.

The INSS is 7.5% of R$ 1,621.00, 9% of R$ 1,281.84, 12% of R$ 1,451.43 and 14% of R$ 1,645.73. At R$ 5,000, by comparison, the INSS is R$ 501.51, the simplified discount gives a base of R$ 4,392.80 and a table tax of R$ 312.89, and the reduction cancels it: no IRRF, net pay R$ 4,498.49.

Set aside about R$ 500 a month for the 13th salary and R$ 666.67 for holiday pay with the extra third. In a Simples Nacional company outside Annex IV, the employer INSS is paid inside the DAS and there are no third-party contributions, so the payroll charge on top of salary is the FGTS of R$ 480.

Common mistakes

1. 1Applying 14% to the whole salary instead of each rate to its slice: on R$ 6,000 that is R$ 840 instead of R$ 641.51.
2. 2Measuring the 2026 reduction on the tax base instead of the gross taxable income, or forgetting it on the 13th salary.
3. 3Ignoring the simplified discount of R$ 607.20 when it beats the INSS and dependants.
4. 4Paying FGTS or the DARF on the 21st when the 20th falls on a weekend or holiday: the deadline moves to the previous business day.
5. 5Paying salaries after the 5th business day or holiday pay less than two days before the holidays start.
6. 6Treating the Simples Nacional as free of payroll charges: FGTS and the employee's INSS and IRRF still apply, and Annex IV activities pay the 20% separately.
7. 7Forgetting that the 13th salary carries FGTS and its own INSS and IRRF calculation.

How Clientlly helps

Clientlly ships a built-in payroll profile for Brazil, checked against official sources on 1 October 2026: the progressive INSS bands up to R$ 8,475.55, the 2026 IRRF table with the simplified discount and the Lei 15.270 reduction as modelled, the employer contributions of 35.8% (INSS 20%, RAT 2%, third parties 5.8% and FGTS 8%) and the R$ 1,621 minimum wage. It calculates gross to net and employer contributions, produces payslips and supports recurring payroll adjustments as well as employee and payroll imports; an administrator can adjust the rates in the payroll tax settings.

The IRRF calculation approximates the official table and reduction, so check it against the Receita Federal's tables, especially near R$ 5,000 and R$ 7,350. The profile models one employee in a primary job, single, without dependants, at federal level, so dependants, the Simples Nacional, your actual RAT and third-party rates, collective agreements and the 13th salary must be checked. Clientlly does not send eSocial events, file the DCTFWeb or issue FGTS Digital guides: you do that in those government systems or with your accountant.

Alongside payroll, the human resources module handles leave requests and approvals with a leave calendar, useful for scheduling holidays, and keeps HR documents, while attendance and time tracking records working hours and overtime. To close the books after each payroll run, see our month-end close checklist.