Contractor vs employer of record for hiring in Brazil
An employer of record hires the person as a local employee on your behalf, handling Brazilian payroll, benefits and severance, typically for $500 to $700 per person per month on top of salary. A contractor arrangement is simpler and cheaper but carries misclassification risk if you treat the person like an employee.
Side by side
| Brazil | an employer of record | |
|---|---|---|
| Who employs the engineer | The studio or the individual contracts with you | The EOR, as a Brazilian employee |
| Extra monthly cost | None beyond the rate | $500–700 per person |
| Brazilian labour obligations | Not yours, if the relationship is genuinely independent | Handled by the EOR |
| Setup time | Days | Two to four weeks |
| Misclassification exposure | Real, and it depends on how you behave day to day | Effectively eliminated |
| Termination | Per the contract, typically 30 days | Brazilian severance rules apply |
When an employer of record is the better choice
- You want the engineer to be legally your employee, with benefits and a long-term relationship.
- Your legal or compliance team has a policy against contractor relationships that look like employment.
- You are building a Brazilian team of five or more and want one payroll rather than five invoices.
When Brazil is the better choice
- You want to start in days rather than weeks, and to be able to stop with 30 days notice.
- You are testing whether nearshore works for your team before committing to a legal structure.
- You would rather one supplier relationship than an employment relationship in a jurisdiction you do not know.
We sell one side of this comparison, so read it with that in mind. The numbers in the table are the ones we would want a buyer to check independently — and the section above it is there because a comparison that never concedes anything is not a comparison.
Frequently asked questions
What is misclassification risk in Brazil, concretely?
Brazilian labour courts look at the substance of the relationship — fixed hours, exclusivity, direct subordination — not at what the contract says. When engineers are contracted through a studio like ours, the studio carries that relationship, not you. Ask your own counsel; we are not lawyers and we will not pretend otherwise.
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