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The minimum wage, or Salário Mínimo, in Portuguese, is an amount set by the government as the minimum salary of full time workers in Brazil. Full-time work in Brazil is generally 44 hours per work, broken up into 5 x 7.5-8 hour days & one 4-6 hour day(often Saturday). Any work time over 8 hours in a day is considered overtime, regardless of whether the total number of hours exceeds 44 per week or not. eg. An employee who worked 5 x 8.5 hour days per week would only do 42.5 hours in total, but would still be entitled to receive 2.5 hours overtime pay for the half an hour per day they worked over 8 hours.

The minimum wage concept in Brazil is that it is the amount needed to cover the basic needs of a worker, including basic expenses such as:

  • Housing
  • Food
  • Education
  • Health
  • Leisure
  • Clothing
  • Hygiene
  • Transport
  • Social Security

This has changed somewhat due to problems with the Brazilian pensions system, which ties pensions to the minimum wage. As such, the Government is limited in its ability to raise the minimum wage in part due to the huge increase in its own pension bill that comes with any increase. In an attempt to sidestep this issue, rather than increase the minimum wage, the Government has tended to add other obligations on the employer, including such things as transport costs, food & meal allowances, Social Security & healthcare. By obligating employers to provide these items, employees receive more take home pay without the Government needing to pay out more in pensions.

These on-costs generally add between 80% - 100% to the cost to an employer of a minimum wage employee in Brazil. So whilst R$937 per month for a minimum wage employee looks very attractive, in reality they will likely cost much more like R$1,850 per month. This is still very affordable although it must be noted that this is a minimum and applies mostly to unskilled, untrained staff outside of major employment centres. In the city of São Paulo for example, whilst the minimum wage is R$1,000, even basic positions such as housekeepers often demand salaries of R$1,500 – R$2,000 per month, plus on-costs.

 

Calculating the Minimum Wage in Brazil

The Federal Government issued a Federal Decree in 2011, setting the base minimum wage at R$545 (US$180) per month for 2011 with a yearly adjustment that is to be made to the minimum wage every January 1st. The yearly adjustment of the minimum wage depends on the variation of the GDP of the year before last, plus the inflation of the previous year, as measured by INPC, which is the Consumer Price Index.

 

Minimum Wage – Federal and State

The Minimum Wage for 2017 was set on January 1st 2017 and is R$937, which was a 6.47% increase on 2016. While the minimum wage is instituted at a federal level, each state is allowed to set its own minimum wage. In Portuguese, this is called Piso Salarial (wage floor) and cannot be less than the federal minimum wage.

Five states in Brazil have set State minimum wages, with all the other states using the federal minimum wage:

  • Paraná - R$1,030
  • Rio de Janeiro - R$1,052
  • Rio Grande do Sul - R$1,103
  • Santa Catarina - R$1,009 (2016)
  • São Paulo - R$1,000

All other states - minimum wage of R$937

 

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