Recent developments in Brazil
National Minimum Wage Increase (2026)
Effective January 2026, the Brazilian government has proposed a new national minimum wage of BRL 1,631 per month, an increase from the BRL 1,518 rate established in January 2025. The raise reflects ongoing government policy to ensure wage growth above inflation to maintain purchasing power and support lower-income workers. This increase impacts payroll planning, labour cost structures, social security contribution thresholds, and compensation for temporary and agency workers who often rely on the minimum wage as their base earnings.
Tax Reform – Expansion of Income Tax Exemption (2026)
Following the tax reform approved in late 2025, Brazil will implement new income tax rules in 2026 that exempt individuals earning up to approximately BRL 5,000 per month from income tax. The reform significantly reduces the tax burden for low-and-middle-income workers, improving net take-home pay and influencing payroll administration and employee-benefits policies. Employers must ensure updated tax brackets are applied in payroll systems from early 2026 and communicate changes to employees.
Psychosocial Risk Management Requirements (2026)
The Ministry of Labour and Employment (MTE) extended the compliance deadline for companies to include psychosocial risk factors in the Occupational Risk Management Program (PGR) to May 2026. This measure reinforces the government’s focus on mental-health protection in the workplace and requires employers to implement assessment, prevention, and reporting mechanisms. Failure to comply may result in regulatory sanctions following inspection.
Remote Work Regulations – Ongoing Compliance Obligations (2026)
Remote work continues to be regulated under existing CLT telework provisions, which require written agreements specifying working hours, cost responsibilities, and health-and-safety compliance standards. Employers must ensure remote employees receive the same legal protections as on-site staff, including overtime, benefits eligibility, and termination rights. Growing labour-court case law in 2025–2026 has reinforced obligations for companies to reimburse necessary remote-work expenses when operationally required.
Equal Pay Transparency Enforcement (2026)
Brazil continues to enforce equal-pay transparency obligations under Law 14.611/2023, requiring companies with more than 100 employees to issue annual pay-equity reports. This requirement promotes gender pay equality and compels employers to provide reporting on compensation and benefits. In 2026, inspections and penalties for non-compliance are expected to increase as regulatory monitoring expands nationwide.
