What It Costs to Terminate an Employee in Brazil (2026) + Severance Calculator

● Updated August 20, 2026 · 2026 figures — Brazil revises payroll tables every January

Dismissing an employee without cause in Brazil costs, at minimum: the notice period (30–90 days of salary), a fine of 40% of all FGTS ever deposited for them, the proportional 13th salary, and every accrued vacation balance with its 1/3 bonus — all payable within 10 calendar days of the contract ending. For a R$ 10,000/month employee with 2.5 years of tenure, that adds up to ≈ R$ 68,000 — nearly seven months of salary leaving in one payment. This guide itemizes every severance component under the 2026 rules, shows the full math on a worked example, and gives you a calculator that runs any scenario — including the aviso prévio projection trap that silently increases three of the lines.

Key numbers for 2026

• Notice (aviso prévio): 30 days + 3 days per full year of service, capped at 90 (Law 12,506/2011)
• FGTS fine on dismissal without cause: 40% of all deposits made during the contract — ≈3.2% of everything the employee was ever paid (how FGTS works)
• Mutual-agreement termination (CLT art. 484-A): fine 20%, indemnified notice halved, employee withdraws 80% of FGTS
• Payment deadline: 10 calendar days from contract end; missing it costs one extra month's salary per employee (CLT art. 477, §§6º and 8º)
• Termination FGTS + fine: by the 10th day after separation (GFD guide); eSocial event by the same deadline
• Indemnified notice projects the contract forward, increasing tenure-based amounts — the most common under-calculation in DIY severance math

The five ways a CLT contract ends — and what each one costs

Severance in Brazil is not one number; it is a menu keyed to the termination type. The employer chooses the type only in the first row — the rest are events:

Notes that decide real cases:

• Accrued vacation + 1/3 survives everything — even a with-cause dismissal. And any accrued period not granted within the 12 months following its accrual year is owed double (CLT art. 137), including at termination.
• A resigning employee who skips the notice can have 30 days deducted from their severance (CLT art. 487, §2º).
• A fixed-term contract broken early by the employer without cause owes half the remaining contract salaries as indemnity (CLT art. 479) — plus the 40% fine.
• Unemployment insurance (seguro-desemprego) is paid by the government, not by you; your role is reporting the termination correctly through eSocial (plus the legacy employer SD form while it is being phased out) so the employee can claim it.

Aviso prévio: 30–90 days, and the projection trap

The notice period (Law 12,506/2011) is 30 days plus 3 days per full year of service with the same employer, capped at 90 days — years counted at the date the dismissal is communicated. Note the off-by-one that breaks DIY calculators: an employee with exactly one completed year already gets 33 days, not 30 (the extra days start once the relationship exceeds one year — MTE Technical Note 184/2012). The proportionality works only in the employee's favor: you can require at most 30 days of actual work — the additional days are always paid as indemnity. An employee who resigns owes only 30 days regardless of tenure.

The part that DIY calculations miss: indemnified notice projects the contract end date forward (CLT art. 487, §1º; TST OJ 82) — and the projection uses the full proportional notice, up to 90 days, not just 30. An employee dismissed on July 31 with 36 days of indemnified notice has a legal contract end of September 5 — and the proportional 13th, proportional vacation and FGTS all count that projected period. Skipping the projection under-calculates three lines at once, and it is the first thing a labor lawyer checks in the termo de rescisão.

Two bookkeeping subtleties inside the projection: the 13th counts months of the calendar year with 15+ days, while vacation counts months of the contract-anniversary year with more than 14 days (CLT art. 146) — same threshold, different anchors; and the projected date goes on the employee's record (CTPS), but the 10-day payment clock and the government deadlines run from the actual last day, not the projected one.

Worked example: R$ 10,000/month, 2.5 years of tenure (2026)

Assumptions: hired February 1, 2024; dismissed without cause on July 31, 2026, with indemnified notice; the 2024–25 vacation year was taken; the completed 2025–26 year was not yet taken (still within its granting window — simple, not double); no habitual overtime (averages would raise every line); standard employer outside Simples Nacional.

Tenure = 2 years and 6 months → notice = 30 + 3×2 = 36 days → contract projects to September 5, 2026.

≈ R$ 68,000 ≈ 6.8× monthly salary. The employee-side view: the salary balance and proportional 13th suffer normal INSS/IRRF withholding; the indemnity lines — indemnified notice, vacation paid out at termination with its 1/3, and the 40% fine — are paid free of INSS and income tax under current consolidated rules. That is why the termo de rescisão separates them so carefully.

Every line above scales with salary and tenure — run your own scenario:

The clock: 10 days, and what happens on day 11

The 2017 labor reform unified the deadline: all severance amounts are due within 10 calendar days of the contract ending, whether the notice was worked or indemnified (CLT art. 477, §6º) — counted from the actual last day of work, not the projected notice date, and anticipating to the prior business day when day 10 falls on a weekend or holiday. Paying on day 11 costs:

• One full month's salary to the employee as a penalty (art. 477, §8º) — automatic, per employee, unless the employee caused the delay; a 2025 binding TST precedent applies it even when the payment was merely partial;
• an administrative fine on top;
• and, in practice, a labor claim that now opens with the employer already in the wrong.

The same 10-day window drives the compliance side:

1. eSocial S-2299 (the termination event) must be transmitted by the 10th day after separation — it is what formalizes the termination for the government, feeds the severance guides and enables the employee's unemployment-insurance claim. The event's field-by-field anatomy is in our eSocial events reference.
2. FGTS termination deposits + the 40% fine are paid via the GFD guide by the same 10th day (FGTS guide).
3. The dismissal month's regular payroll, eSocial closing and DCTFWeb still run on their normal calendar (the monthly cycle).

Since the 2017 reform, union homologation of terminations is no longer required — the old mandatory sign-off for employees with 1+ year of service is gone, though collective agreements (CCTs) can still create formalities. Check the CCT before assuming.

What drives the number: the five cost levers

1. Tenure. It compounds three ways: longer notice (+3 days/year), a bigger FGTS fine base (≈3.2% of all pay ever), and more chances of an untaken vacation year sitting on the balance sheet.
2. Salary — including averages. Habitual overtime, commissions and night premiums integrate the base of the notice, 13th and vacation. In shift-heavy operations (hotels, logistics, facilities), severance on "base salary only" is systematically understated.
3. Vacation hygiene. Each accrued-but-untaken year adds 1.33 salaries; each expired one adds 2.67 (the art. 137 double). Disciplined vacation scheduling is the cheapest severance reduction there is — this is exactly the liability a workforce system should be flagging while the employee is still active.
4. Termination type. A negotiated 484-A mutual agreement cuts the fine to 20% and the indemnified notice in half (a worked notice under the agreement is paid in full) — legitimate and increasingly common, but it must be genuine mutual consent, and the employee gives up unemployment insurance.
5. Timing around the union's wage date. Dismissing so that the contract — counting the projected notice — ends in the 30 days before the category's collective wage-adjustment date (data-base) triggers an additional one-month-salary indemnity (Law 7,238/1984; TST Súmulas 182 and 314). Check the CCT calendar before choosing a termination date.

FAQ

How much does it cost to fire an employee in Brazil?
Rule of thumb for dismissal without cause: 4–8× monthly salary once notice (30–90 days), the proportional 13th, vacation balances with the 1/3 bonus, the 40% FGTS fine and the employer charges on the taxable lines are added — the multiple grows with tenure and untaken vacation. A R$ 10,000 employee with 2.5 years costs ≈R$ 68,000 all-in.

What is aviso prévio?
The statutory notice period: 30 days plus 3 days per full year of service, capped at 90 (Law 12,506/2011) — an employee with exactly one completed year already gets 33 days. The employer can require at most 30 days of actual work — the rest is paid as indemnity — and indemnified notice legally extends the contract, increasing the proportional 13th, vacation and FGTS.

What is the deadline to pay severance in Brazil?
10 calendar days from the end of the contract — counted from the actual last day of work, for both worked and indemnified notice (CLT art. 477, §6º). Late payment triggers an automatic penalty of one month's salary to the employee (§8º), plus administrative fines.

How is the 40% FGTS fine calculated?
40% of all FGTS deposits made during that contract, monetarily adjusted — including amounts the employee already withdrew. It is deposited into the employee's FGTS account via the GFD guide by the 10th day after separation. A mutual-agreement termination halves it to 20%.

Which severance amounts are tax-free?
Under current consolidated rules: indemnified notice, vacation paid out at termination (accrued and proportional, with the 1/3), and the 40% fine are free of INSS and IRRF. The salary balance and the proportional 13th are taxed normally. The gross-vs-net split appears line by line on the termination statement (termo de rescisão).

Is a dismissed employee entitled to the 13th salary?
Without cause, on resignation or mutual agreement: yes, 1/12 per month worked in the year (15+ days = a month), counting the projected notice period. With cause: the proportional 13th is forfeited. Full 13th rules in our 13th salary guide.

Do I need the union to approve a termination?
No — mandatory union homologation was abolished by the 2017 labor reform. But the applicable collective agreement (CCT) may impose its own formalities or payments, so it must be checked before every termination.

What about dismissing with cause?
With-cause dismissal (CLT art. 482: dishonesty, insubordination, abandonment, etc.) owes only the salary balance and accrued vacation + 1/3 — no notice, no fine, no proportional amounts. Precisely because it is cheap, Brazilian courts scrutinize it heavily and reversal in litigation converts it into a without-cause bill plus interest. Use it on evidence, not on cost.

See the liability before it is due

Every input of this calculation already lives in your workforce system: hire dates, salary history, overtime averages, vacation balances, FGTS deposits. Garoa keeps a per-employee termination provision — notice, fine, vacation exposure including approaching art. 137 doubles — visible to HQ in English while the employee is still active, and generates the S-2299 and GFD deadlines when a termination actually happens. For the full monthly compliance chain, see the Brazil payroll guide.

Sources

• Law 12,506/2011 (proportional prior notice): https://www.planalto.gov.br/ccivil_03/_ato2011-2014/2011/lei/l12506.htm
• CLT — Decree-Law 5,452/1943, arts. 477, 479, 482, 484-A, 487 (deadlines, penalties, with-cause list, mutual agreement, notice effects): https://www.planalto.gov.br/ccivil_03/decreto-lei/del5452.htm
• TRT-4 Escola Judicial — proportional notice, Law 12,506/2011 (30 + 3/year, cap 90; proportionality favors the employee): https://www.trt4.jus.br/portais/escola/modulos/noticias/415842
• TST — OJ 82 SDI-1 and Súmula 305 (projection of indemnified notice; FGTS on the notice): https://www.tst.jus.br/sumulas
• MTE — Technical Note CGRT/SRT 184/2012 (proportional notice mechanics: 33 days at one completed year; max 30 days worked): https://www.contabeis.com.br/noticias/5876/aviso-previo-proporcional-nota-tecnica-cgrt-srt-mte-184-2012/
• Law 8,036/1990, art. 18 (40% FGTS fine on the contract's deposits): https://www.planalto.gov.br/ccivil_03/leis/l8036consol.htm
• MTE / gov.br — FGTS Digital FAQ (GFD, termination deposits and fine, 10th-day deadline): https://www.gov.br/trabalho-e-emprego/pt-br/servicos/empregador/fgtsdigital/perguntas-frequentes
• gov.br — eSocial: S-2299 termination event and deadlines: https://www.gov.br/esocial/pt-br
• Law 8,212/1991, art. 28, §9º (amounts excluded from the social-security base — indemnified vacation, indemnities): https://www.planalto.gov.br/ccivil_03/leis/l8212cons.htm
• STJ — REsp 1,230,957 (repetitive, Tema 478: no employer social contribution on indemnified notice): https://processo.stj.jus.br/processo/pesquisa/?aplicacao=processos.ea&tipoPesquisa=tipoPesquisaNumeroRegistro&termo=201100096830
• STJ — Súmula 386 (income-tax exemption of indemnified vacation and its 1/3): https://www.stj.jus.br/
• CLT art. 137 (double vacation pay when granted late): https://www.planalto.gov.br/ccivil_03/decreto-lei/del5452.htm

Researched and written by the Garoa team. Every figure on this page was verified against official sources (gov.br, Planalto, TST) on August 20, 2026.