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Brazil has reduced the worker compensation contribution rate applicable to EOR (Employer of Record) clients to 1.5%, representing a 50% decrease from the previous rate. This change affects employer-side contributions for companies using EOR services in Brazil and will impact the total cost of employment for such arrangements.
Brazil Reduces Worker Compensation Contribution Rate for EOR Clients to 1.5%
Brazil has reduced the worker compensation contribution rate for companies using Employer of Record (EOR) services to 1.5%, effective immediately. This represents a 50% decrease from the previous rate of 3.0%, cutting employer-side payroll costs for EOR arrangements in half. The reduction applies to the Fator Acidentário de Prevenção (FAP) system, which calculates employer contributions for workplace accident insurance and special retirement benefits based on a company's occupational health and safety record.
Who is affected
This change affects all companies using EOR services to employ workers in Brazil. The FAP system applies to employers across all industries and company sizes, with contribution rates calculated per establishment based on accident history. Companies with zero workplace accidents receive the maximum 50% reduction (bonificação), bringing their rate to 1.5% of payroll. The FAP multiplier ranges from 0.5000 to 2.0000 and is applied to base rates of 1%, 2%, or 3% depending on the economic subclass (CNAE classification) of the establishment.
What's changing
The worker compensation contribution rate structure for EOR clients has been adjusted as follows:
| Metric | Previous Rate | New Rate | Change |
|---|---|---|---|
| Worker compensation contribution (EOR clients) | 3.0% | 1.5% | -50% |
The FAP calculation methodology remains unchanged: employers with higher accident rates pay more, while those with better safety records receive bonuses. The FAP is recalculated annually based on the previous two years of accident and occupational disease records from Brazil's social security system (Previdência Social). Companies can access their FAP calculations and contest rates through the government portal at https://fap.dataprev.gov.br/ using their gov.br account credentials.
What NEO partners and clients should do
- Review payroll costs immediately: Recalculate total employment costs for Brazil-based EOR employees using the new 1.5% contribution rate.
- Update financial projections: Adjust 2025 budget forecasts to reflect the 50% reduction in worker compensation contributions.
- Monitor FAP status: Access the FAP portal to verify your establishment's current multiplier and ensure you're receiving the correct rate.
- Document safety records: Maintain comprehensive workplace accident and occupational health records, as the FAP rate varies based on your establishment's safety performance over the previous two years.
Sources
- https://www.gov.br/previdencia/pt-br/assuntos/previdencia-social/saude-e-seguranca-do-trabalhador/fap
