Since its establishment, Israel has had ongoing relations with Brazil. In the past decade, their trade relations were estimated at 1.5 billion dollars. The most common markets for business activity between Israel and Brazil are the medical market, security market, communication market and so on.
Many Israeli companies are interested in utilizing the relative advantages of operating business activity in Brazil. Using the payroll method for employment is an efficient solution that helps to overcome the administrative obstacles, while making the business activity more efficient and maximizing the financial gain of the Israeli companies operating in Brazil.
Adecco Israel, a business solution management company, provides payroll services in 66 countries worldwide, including Brazil.
What is the payroll method of employment? What are the unique characteristics of the Brazilian Tax Law? How is the right way to dismiss an employee in Brazil?
To find out more, keep reading!
What is the payroll method of employment?
In the realm of employment there are three employment methods – direct employment, payroll, and outsourcing.
The payroll method combines the advantages of direct employment and outsourcing, while eliminating the disadvantages of those methods. The payroll method works as follows: the professional relationship involved in locating, sorting, recruiting and professional management of the employees – is done by the client company.
However, in order to spare the disadvantages that are involved in direct employment, the administrative relations that are typically handled between a human resources department and the employees, regarding payment of salaries, ensuring the employees’ rights, etc. – are managed by a payroll company.
Unlike outsourcing, where the company removes its responsibility from implementing a certain project – using the payroll method allows the Israeli company to ensure the business activity is meeting the company’s standards.
Nevertheless, unlike direct employment – the responsibility to handle the administrative aspect is transferred to the payroll company. Thus, payroll services are an employment method that incorporate direct employment and outsourcing ideally.
In order to effectively operate in Brazil, it is important to be familiar with the main characteristics of the business sector in the country.
What are the unique characteristics of the Brazilian Tax Law?
Brazil is known as a country with very high tax rates, which affect both employers and employees. Employers are required to pay approximately 80% of the salaries to social security. For example, if an employee earns 100,000 Brazilian Real, in practice the employer is required to pay 180,000 Real. In addition, employers are also required to pay 15% of the company’s total taxable income.
What are the requirements of managing payroll services in Brazil?
The payment for payroll services must be made with the local currency. This fact has many consequences on managing the client, since the Israeli company will be required to put time and resources into foreign currency exchange and planning the payment dates to keep the additional costs minimal.
Employment and dismissal in Brazil – how to do it the right way?
It is important to consider the following aspects when employing employees in Brazil:
it is recommended to prepare a clear employment contract in the local language – Portuguese. Since the Brazilian labor laws protect the employees relatively strictly, it is preferable that the conditions in which employees are dismissed will be very explicit and clear.
Severance pay usually includes: payment for remaining vacation days, a Christmas bonus depending on the months of employment in the fiscal year, and so on.
overtime payment must be at least 50% higher than the hourly wage. Working on Sundays require a special approval as well as double payment of the fixed salary.
employees who have worked for a whole year are entitled to 30 vacation days. Employees must use their vacation days in the following year. If an employee refuses to use his vacation days – the employer is required to pay double for each vacation day.
women are entitled to 120 days of paid maternity leave. This period can be extended for additional 60 days.
there are many protective laws in Brazil, such as minimum wage, maximum amount of daily and weekly working hours, bonus for the second working year – the amount of an additional salary, sharing of the company’s profits, social security payments, and more.
Failure to comply with the requirements of the law in Brazil could lead to severe sanctions, such as fines, revocation of employment permits, and so forth.
Due to the unique characteristics of the business sector in Brazil – it is recommended to seek services of an agent who specializes in employment and business management in Brazil such as Adecco.
Adecco Israel – who are we?
The payroll method allows companies to avoid having a human resources department in a foreign country, and thus maintain business agility and flexibility, save the need to deal with local regulations that are involved in employment, maintain the company’s business independence while operating abroad, and so on.
By using payroll services, you can avoid making costly mistakes that occur as a result of lack of business experience in the target country.
Using payroll services saves time and resources and helps to maximize the profits in the target country, and by doing so, the company can operate in Brazil very efficiently.
The Adecco Group operates in 66 countries around the world, including Brazil. Adecco Israel is the Israeli representative of the global company, that provides its clients with professional counseling and support in a large variation of services, including – different methods of employment, human resources management, consulting on subjects of local regulations, business activity management and providing of business solutions, financial management and counseling, providing of global services without the need of a legal entity abroad, etc.
With the help of Adecco Israel, you can manage your business activity in Brazil without having to take care of the involved regulations.
Israeli companies can operate efficiently and optimally, knowing that Adecco Israel is taking care of all of the administrative issues in the foreign countries for them.
We would be happy to be at your service and help your company succeed and expand its business activity in Brazil.
Contact us today!