Employment Termination in Brazil: Complete Guide 2024
Learn how to calculate severance pay in Brazil. Complete guide on employment termination rights, payments, and deadlines under CLT labor law.
Employment termination is a decisive moment in the work relationship that generates specific rights for the employee. Understanding the correct calculation of severance pay is essential to ensure you receive all amounts owed.
Each type of dismissal generates different rights, with values that can vary significantly. A worker with a salary of R$ 3,500.00 and 2 years at the company can receive anywhere from R$ 2,900.00 (resignation) to R$ 14,800.00 (dismissal without just cause).
What is employment termination
Employment termination is the end of the employment contract between employee and employer. This process involves the payment of various severance benefits that vary according to the type of dismissal.
The final value of the employment settlement depends on factors such as length of service, salary, pending vacation, and the reason for termination.
Types of termination
There are four main types of termination in Brazil:
- Dismissal without just cause: employer dismisses the worker
- Resignation: worker requests dismissal
- Dismissal for just cause: worker commits serious misconduct
- Employment agreement: consensus between parties (Law 13.467/2017)
Worker’s rights
Rights vary according to the type of termination, but some are always due:
- Salary balance for days worked
- Accrued vacation (if any)
- 13th salary proportional to months worked
Other rights depend on the type of dismissal, such as prior notice, FGTS (severance fund) fine, and unemployment insurance.
Mandatory severance benefits
Salary balance
The salary balance corresponds to days actually worked in the month of termination. The calculation is proportional:
Example: Salary R$ 3,000.00 ÷ 30 days = R$ 100.00 per day. Working 15 days = R$ 1,500.00
For variable salaries, the average of the last 12 months or period worked, if shorter, is considered.
Vacation and proportional 13th salary
Proportional vacation is calculated considering the months worked in the current accrual period. Each complete month generates the right to 1/12 of vacation.
The proportional 13th salary follows the same rule: 1/12 for each month worked in the year. Periods over 15 days count as a complete month.
Example: Working 8 months = 8/12 of vacation + 1/3 constitutional + 8/12 of 13th salary
FGTS and fine
The FGTS balance always belongs to the worker. In dismissal without just cause, there is a right to a 40% fine on the total balance deposited during the contract.
The fine applies to all deposits: salaries, 13th salary, vacation, and overtime. It is one of the most significant values in termination.
Prior notice
Prior notice can be worked or compensated, with a minimum duration of 30 days. For contracts over 1 year, 3 days per year worked are added, limited to 90 total days.
Example: 3 years at company = 30 days + 9 extra days = 39 days of prior notice
Calculation by type of dismissal
Dismissal without just cause
In dismissal without just cause, the worker is entitled to all severance benefits:
| Benefit | Calculation |
|---|---|
| Salary balance | Days worked in the month |
| Prior notice | Full salary for the period |
| Proportional vacation | Months worked ÷ 12 + 1/3 |
| Proportional 13th | Months worked ÷ 12 |
| FGTS fine | 40% of total balance |
Resignation
In resignation, the worker does not receive:
- Compensated prior notice
- 40% FGTS fine
- Unemployment insurance
Maintains right to salary balance, accrued and proportional vacation, and proportional 13th salary.
Employment agreement
In the CLT (labor law) agreement (article 484-A), the worker receives 50% of the values from dismissal without just cause:
- 50% of prior notice
- 20% of FGTS fine (half of 40%)
- Can withdraw up to 80% of FGTS
- No right to unemployment insurance
Payment deadlines
Payment deadlines vary according to prior notice:
- Prior notice worked: until the 1st business day after termination
- Compensated prior notice: until the 10th calendar day from notification
Non-compliance with deadlines generates a fine equivalent to the employee’s salary, according to article 477 of CLT.
Complete practical example
Consider a worker with the following characteristics:
- Salary: R$ 4,000.00
- Time at company: 2 years and 3 months
- Dismissal: without just cause on 03/15/2024
- Days worked in March: 15 days
Benefit calculation:
| Benefit | Value |
|---|---|
| Salary balance (15 days) | R$ 2,000.00 |
| Prior notice (36 days) | R$ 4,800.00 |
| Proportional vacation (3/12 + 1/3) | R$ 1,333.33 |
| Proportional 13th (3/12) | R$ 1,000.00 |
| Gross total | R$ 9,133.33 |
Add the 40% FGTS fine on the total accumulated balance. For this example, estimating R$ 15,000.00 balance: R$ 6,000.00.
Total termination: approximately R$ 15,133.33 (before INSS (social security) and IRPF (income tax) deductions).
Use our employment termination calculator to get the exact calculation with all applicable deductions.
Required documents
For approval and payment of termination, the following are required:
- CTPS (Work Card)
- TRCT (Employment Contract Termination Term)
- Social connectivity keys for FGTS withdrawal
- Dismissal medical exam
- Dependent verification (if any)
Union approval is mandatory for contracts over 1 year, except if the company has a digital certificate.
Frequently Asked Questions
When can I withdraw FGTS upon termination?
You can withdraw FGTS immediately in dismissal without just cause, employment agreement (80% of balance), and termination of fixed-term contract. In resignation, withdrawal is only released after 3 years without deposits.
Can the company deduct unworked prior notice?
Yes. If you resign and don’t fulfill the 30-day prior notice, the company can deduct this amount from severance benefits. The deduction is made proportionally to days not worked.
How to calculate double vacation pay in termination?
Vacation accrued for more than 12 months is paid double (article 137 of CLT). Add vacation value + 1/3 constitutional and multiply by 2. This doesn’t apply to proportional vacation.
Can I receive unemployment insurance in an employment agreement?
No. The CLT agreement doesn’t grant the right to unemployment insurance. Only dismissal without just cause and some specific types (temporary contract termination, indirect dismissal) guarantee this benefit.
What’s the deadline to contest termination values?
You have up to 2 years after contract termination to contest values in Labor Court. For credits not paid during the contract, the deadline is 5 years from the end of the employment relationship.
How does the late payment fine work?
If the company delays payment beyond legal deadlines (1st business day or 10th calendar day), it must pay a fine equivalent to your salary. This fine is due regardless of proving damages.
Do retirees have the right to the same severance benefits?
Yes, but with some differences. Retirees don’t receive unemployment insurance and there may be limitations on FGTS withdrawal depending on the type of retirement. Other benefits (prior notice, vacation, 13th salary) are fully due.