Employment Tax
Brazil | The implementation of FGTS Digital is now effect in Brazil
Summary
As of March 1, 2024, the FGTS Digital system has been implemented in Brazil. Notably, the payment deadline has now been extended from the 7th to the 20th day of the following month.
The detail
Implemented since March 1, 2024, the digital FGTS system is designed to enhance accessibility and improve information management.
Also known as Severance Indemnity Fund, the FGTS consists in a mandatory monthly deposit made by the companies to the employee´s individual blocked account. The amount deposited is equivalent to 8% of the total remuneration paid, credited and/or delivered to each employee, with no set ceiling. In case of termination without just cause, the employer must also pay a penalty equivalent to 40% based on the total deposits made during the employment relationship.
Not only does this update aim to simplify compliance with deadlines, but it also ensures precision in the amounts owed to employees. A notable feature is the introduction of FGTS payment via Pix with QR Code or copy-pasting the code. This change provides a significant advantage, as proof of payment will be available in real-time, optimizing efficiency.
With this payment method, employers won’t incur any costs, and there is no limit on the number of payment slip that can be paid. However, in cases of late payments, interest will be applied.
The new modality also offers flexibility in payment, enabling transactions on any day and time. Moreover, the payment deadline for monthly invoices has been extended from the 7th to the 20th, starting in April (for the values declared in March).
Contact us
For a deeper discussion on the above, please reach out to your Vialto Partners point of contact, or alternatively:
Flavia Fernandes
Country Leader
Reinaldo Medina
Director
Juliana Andres
Senior Manager
Natalia Pinto
Manager
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Vialto Partners (“Vialto”) refers to wholly owned subsidiaries of CD&R Galaxy UK OpCo Limited as well as the other members of the Vialto Partners global network. The information contained in this document is for general guidance on matters of interest only. Vialto is not responsible for any errors or omissions, or for the results obtained from the use of this information. All information is provided “as is”, with no guarantee of completeness, accuracy, timeliness or of the results obtained from the use of this information, and without warranty of any kind, express or implied, including, but not limited to warranties of performance, merchantability and fitness for a particular purpose. In no event will Vialto, its related entities, or the agents or employees thereof be liable to you or anyone else for any decision made or action taken in reliance on the information in this document or for any consequential, special or similar damages, even if advised of the possibility of such damages.
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Further information on Vialto Partners can be found here: www.vialtopartners.com
Vialto Partners (“Vialto”) refers to wholly owned subsidiaries of CD&R Galaxy UK OpCo Limited as well as the other members of the Vialto Partners global network. The information contained in this document is for general guidance on matters of interest only. Vialto is not responsible for any errors or omissions, or for the results obtained from the use of this information. All information is provided “as is”, with no guarantee of completeness, accuracy, timeliness or of the results obtained from the use of this information, and without warranty of any kind, express or implied, including, but not limited to warranties of performance, merchantability and fitness for a particular purpose. In no event will Vialto, its related entities, or the agents or employees thereof be liable to you or anyone else for any decision made or action taken in reliance on the information in this document or for any consequential, special or similar damages, even if advised of the possibility of such damages.
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