Key facts at a glance
Simples Anexo III
starts at 6%
if Fator R ≥ 28%
Fator R threshold
28%
payroll ÷ revenue, trailing 12mo
Typical PJ premium needed
30–50%
above CLT gross to compensate
On an R$8,000/month CLT salary (R$96,000/year), INSS and IRRF take roughly R$1,959/month combined, leaving a base net of about R$6,041/month before adding 13º salário and vacation bonus value. A PJ contractor invoicing the same R$8,000/month, with pró-labore tuned to hit the 28% Fator R threshold for Anexo III, pays roughly R$308 INSS on pró-labore plus a 6% DAS on revenue, and can net more per month, but with zero 13º, zero FGTS, and zero severance protection if the contract ends.
The honest comparison isn't "which nets more this month", it's whether a PJ rate is high enough to also cover what CLT gives you automatically: roughly one extra month's pay a year (13º), a vacation bonus, an 8%-of-salary retirement-adjacent fund (FGTS), and legal severance protection.
See your CLT-side net pay exactly, INSS and IRRF included.
Open the Brazil calculatorHow each regime is actually taxed
CLT withholds INSS (progressive, 7.5% to 14%, capped at the teto) then IRRF (progressive, 0% to 27.5%, on the post-INSS base, with the 2026 Lei 15.270/2025 redutor applied where the gross monthly salary qualifies) directly from your paycheck. Your employer separately funds 13º salário, paid vacation plus the 1/3 constitutional bonus, and FGTS (8% of salary, deposited monthly into an account you access under specific conditions), none of which reduce your take-home pay, they're additive.
PJ works through your own company, typically opting into Simples Nacional. The company pays a single unified tax, the DAS, on gross revenue, at a rate set by which Anexo applies: Anexo III (starting at 6%) for services if your Fator R, the ratio of payroll costs (mainly your pró-labore) to revenue over the trailing 12 months, reaches at least 28%; otherwise Anexo V (starting at 15.5%) applies instead, a materially worse rate for the same revenue.
On top of the DAS, you personally pay INSS (11%, as a contribuinte individual, floored at minimum wage and capped at the teto) and IRRF on your pró-labore, using the same progressive table CLT employees use. Whatever's left after DAS, pró-labore INSS, pró-labore IRRF, and any accountant fees is your PJ net, with profit distributions beyond pró-labore generally exempt from further personal income tax.
Why the Fator R matters so much to your effective rate
The gap between Anexo III (starting at 6%) and Anexo V (starting at 15.5%) is large enough that many PJ contractors deliberately set their pró-labore at exactly 28% of trailing-12-month revenue, the minimum needed to qualify for Anexo III, rather than a lower amount that would minimize personal INSS/IRRF but push the company into the more expensive Anexo V bracket.
Getting this wrong, or not tracking your Fator R at all, is one of the most common ways PJ contractors end up paying more tax than they expected. It's genuinely worth running your own numbers with an accountant rather than assuming a flat 6% applies automatically just because you're on Simples Nacional.
What a higher PJ rate actually has to cover
A CLT salary comes bundled with 13º salário (effectively a 13th month of pay), a constitutional 1/3 vacation bonus, FGTS (8% of salary, employer-funded, accessible under specific conditions), and severance protections under Brazilian labour law if you're dismissed without cause. None of these exist under PJ; the market convention that PJ rates should run 30-50% above an equivalent CLT salary exists specifically to compensate for their absence.
If a PJ offer is only nominally higher than the CLT alternative, say 10-15% more, it's very likely a worse deal once you account for what you're giving up, not a better one, despite the higher headline number.
Hiring in Brazil: what CLT actually costs a company beyond gross salary
The FGTS (8% of salary) and 13º salário (one extra month of pay a year, roughly +8.3%) discussed above from the employee's side are also real, additional employer costs, not deductions from the gross salary figure. Add the constitutional vacation bonus (1/3 of one month's pay, roughly +2.8% annualized) and, for companies outside Simples Nacional, employer-side INSS patronal (commonly around 20% of payroll), RAT occupational-risk insurance (roughly 1-3%, industry-dependent), and Sistema S / third-party contributions (commonly cited around 5.8%), and the widely-used Brazilian HR benchmark for total encargos sociais on a standard CLT hire lands somewhere in the 65-100% range on top of gross salary, before any benefits like health insurance or meal vouchers.
Employers that hire CLT staff through a company registered under Simples Nacional generally have INSS patronal folded into the DAS rate instead of paid separately, which meaningfully lowers that total burden versus a Lucro Real or Lucro Presumido company, so the real loaded-cost percentage varies significantly by the hiring entity's own tax regime, not just by CLT versus PJ. If you're costing out a Brazil hire from the company side, budget from your specific entity's actual regime rather than a single blanket percentage.
Start with your CLT-side numbers
Run your CLT salary through INSS and IRRF to get a clean baseline before comparing against a PJ offer.
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Frequently asked questions
What's the fundamental difference between CLT and PJ?
CLT (Consolidação das Leis do Trabalho) is formal salaried employment: your employer withholds progressive INSS and IRRF from your paycheck, and in exchange you get 13º salário, paid vacation with a constitutional 1/3 bonus, FGTS (8% employer-paid), and labour-law protections including severance if dismissed. PJ (pessoa jurídica) means you invoice through your own company, typically taxed under Simples Nacional, and receive none of those CLT-specific rights automatically, you're a service provider, not an employee, even if you work full-time for a single client.
How is a PJ contractor actually taxed under Simples Nacional?
Through a unified monthly tax (DAS) on company revenue, with the rate determined by which Anexo (annex) applies. For IT services and consulting, Anexo III starts at 6% and is far cheaper than Anexo V, which starts at 15.5%. Which one applies depends on the Fator R: if your payroll costs (typically your own pró-labore) reach at least 28% of your revenue over the trailing 12 months, you qualify for the cheaper Anexo III; below that threshold, you fall into the more expensive Anexo V.
What is pró-labore, and how is it taxed separately from the DAS?
Pró-labore is the salary you pay yourself as the owner of your PJ company, separate from company revenue. It's subject to INSS as a contribuinte individual at 11% (floored at the minimum wage, capped at the INSS teto) plus IRRF using the same progressive table CLT employees use. The DAS (Simples Nacional tax) is paid by the company on total revenue; pró-labore tax is paid by you personally on the salary you draw from that revenue, two separate calculations stacked on top of each other.
Why do PJ contracts typically need to pay 30-50% more than an equivalent CLT salary?
Because that premium is meant to compensate for everything PJ doesn't include: 13º salário, paid vacation with the 1/3 bonus, FGTS (8% of salary, deposited monthly by a CLT employer), and severance protections under Brazilian labour law. A PJ contractor has to self-fund the equivalent of these (private savings, private health insurance, an emergency buffer for gaps between contracts) out of a higher gross rate, or simply go without them.
Does the new 2026 IRRF redutor change the CLT vs PJ math?
Yes, for lower salary levels. Lei 15.270/2025's redutor zeroes CLT's IRRF up to R$5,000/month gross and phases it out gradually through R$7,350, which narrows (but doesn't eliminate) PJ's tax-rate advantage at those income levels, since PJ's Simples Nacional DAS and pró-labore INSS aren't affected by the redutor at all. Above R$7,350/month, the redutor doesn't apply to CLT either, so the comparison reverts to the standard structural gap described above.
Is PJ automatically the better financial choice?
Not automatically, it depends on your specific revenue, Fator R positioning, and how much you value CLT's guaranteed benefits versus the flexibility and often-higher headline rate of PJ. At higher income levels, and when Anexo III (6% starting rate) applies cleanly, PJ frequently nets more per real of revenue than CLT nets per real of salary, but that comparison only holds if the PJ rate offered is genuinely higher than the CLT alternative by enough to offset the missing benefits, not just nominally similar.