This article is part of our Complete Guide to Hiring Tech Talent in Brazil.
If you’re a foreign company hiring in Brazil for the first time, two acronyms show up almost immediately: PJ and CLT. They are the two dominant ways tech talent gets hired in Brazil, and not understanding the difference is one of the most common mistakes international companies make.
This article explains the general shape of both models and how international companies actually use them. It is not legal advice. Brazilian labor law is detailed and enforced, so review any final hiring structure with a Brazilian labor lawyer or your Employer of Record (EOR) before you sign.
CLT: Formal Employment
CLT (Consolidação das Leis do Trabalho, Brazil’s labor code) is the traditional employment relationship. The worker is a direct employee with the full set of protections Brazilian law guarantees, including:
- 13th salary: one extra month of pay per year
- 30 days of paid vacation, plus a vacation bonus of one third of monthly salary
- FGTS: a severance fund the employer pays into every month (8% of salary)
- Social security (INSS): employer contributions on payroll, around 20% of salary, plus smaller additional payroll charges
- Notice period and severance rules if the relationship ends without cause
Put together, the real cost of a CLT employee is well above the gross salary on the offer letter. That is why comparing a CLT salary with a PJ rate one-to-one is misleading.
To hire under CLT without your own Brazilian legal entity, you need an Employer of Record: a local company that formally employs the engineer on your behalf, runs payroll and compliance, and invoices you.
PJ: Independent Contractor
PJ (Pessoa Jurídica, legal entity) means the engineer operates through their own company and invoices yours for services. In spirit it is close to a US 1099 contractor, although the legal mechanics are different.
PJ is very common in Brazilian tech, especially for senior and remote roles. It is faster to set up across borders, it doesn’t require a local entity, and it often means higher take-home pay for the engineer than an equivalent CLT salary, because the company isn’t carrying the CLT-mandated charges. The engineer, in turn, gives up the protections listed above unless they are negotiated into the contract.
The Risk You Need to Know About: Disguised Employment
A PJ contract describes a business-to-business service relationship. If, in practice, the relationship looks like employment, Brazilian labor courts can reclassify it as CLT and order the company to pay the missing rights retroactively. The signs courts usually look at:
- Subordination: the contractor is managed like an employee, taking orders and being evaluated like one
- Fixed hours and attendance control
- Personal service: only that person can do the work, with no possibility of substitution
- Exclusivity and economic dependence on a single client
The legal ground here is moving. Brazil’s Supreme Court (STF) is reviewing the legality of PJ contracting under Theme 1389, and as of mid-2026 there was no final ruling. Until there is, the practical rule stays the same: if you want a PJ relationship, it has to work like one, not only look like one on paper.
Side-by-Side Comparison
| CLT | PJ | |
|---|---|---|
| Relationship | Direct employment | Contractor, invoiced services |
| Needs a local entity or EOR | Yes | No |
| 13th salary, FGTS, paid vacation | Mandatory | Only if negotiated |
| Setup speed | Slower, more paperwork | Faster |
| Cost beyond gross pay | Significant payroll charges and benefits | Mostly the agreed rate |
| Main risk | Cost and compliance handled by you or the EOR | Reclassification as employment if it works like a job |
How International Companies Usually Do It
In practice, most international companies hiring engineers in Brazil go one of two ways:
- Through their Employer of Record. If you already use an EOR such as Deel, Remote or Oyster in other countries, you can employ the engineer in Brazil through it, under CLT or the EOR’s contractor option. The EOR handles payroll, charges and compliance.
- Directly as PJ. The engineer invoices your company from their own Brazilian company. Common for senior remote roles, and the fastest route, as long as the relationship is structured as real contracting.
Which one fits depends on how you plan to manage the person, how long the engagement will last, and how much risk you want to carry. For a long-term, full-time member of your team who works like an employee, an EOR is usually the safer structure.
Where HUNT IT Fits
HUNT IT recruits. We find, technically vet and English-test Brazilian engineers for international companies, and then you hire them directly, as PJ or through your EOR. We don’t employ your engineers or charge a monthly markup on their pay. We charge a one-time success fee per hire.
What we do cover: we tell candidates from the first conversation which contract model you use and in which currency they will be paid, so there are no surprises at the offer stage.
Frequently Asked Questions
Can a US company hire a Brazilian developer without a local entity?
Yes. The two usual routes are an Employer of Record, which employs the developer on your behalf, or a PJ contract, where the developer invoices your company from their own Brazilian company.
Is PJ legal for foreign companies?
PJ contracting is legal and widely used in Brazilian tech. The risk is a PJ relationship that works like employment, with subordination, fixed hours and exclusivity, which labor courts can reclassify as CLT. Theme 1389 at Brazil’s Supreme Court is expected to set clearer rules. Check your structure with a local labor lawyer.
Is PJ cheaper than CLT?
Usually, for the company, because the CLT payroll charges and benefits don’t apply. But the engineer will price that in, so PJ rates tend to be higher than the equivalent CLT gross salary. Compare total cost, not the headline numbers.
Does HUNT IT employ the engineers?
No. We recruit; you hire directly, either as PJ or through your EOR.
Hiring in Brazil, the Right Way
HUNT IT helps international companies find and hire senior Brazilian engineers who work in your time zone. See how our nearshore recruitment works.