How does end-of-service pay work in Brazil?

Brazil has no single lump-sum gratuity. Instead employers deposit 8% of your monthly salary into an FGTS account each month — on top of your pay, not as a deduction. On dismissal without just cause they also pay a 40% penalty (multa rescisória) on the accumulated FGTS balance, and you can withdraw the balance plus the penalty.

What is the 40% penalty?

When an employer dismisses a worker without just cause, the law requires an extra payment of 40% of the total FGTS deposited during the contract. This multa rescisória is paid on top of the FGTS balance and is released to the worker, making dismissal-without-cause the most favourable exit financially.

What happens if I resign?

On resignation there is no penalty and, as a rule, the FGTS balance stays in the account rather than being released for withdrawal. A mutual-agreement termination (distrato) is a middle ground: a 20% penalty applies and 80% of the balance can be withdrawn.

Does the FGTS earn interest?

Yes. The FGTS account earns a small annual yield plus distributions in some years. The tool lets you set an assumed annual yield so the accumulated balance reflects compounding, though the real return is set by the fund each year.

Brazil Gratuity / End-of-Service Calculator

Q: Is this the full final settlement?

No. The rescisão (final pay) also includes prior notice, accrued and proportional holiday with the one-third bonus, and the proportional 13th salary. This tool focuses on the FGTS and its penalty; add the other components for a complete settlement.

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This Brazil end-of-service calculator estimates what you receive when a job ends, centred on the FGTS (Fundo de Garantia do Tempo de Serviço) and the 40% dismissal penalty. Unlike many countries, Brazil has no single gratuity lump sum — the FGTS does that job.

How it works

Each month your employer deposits 8% of your salary into an FGTS account. This is on top of your pay, never deducted from it. The tool accumulates those deposits over your length of service, compounding an optional annual yield:

balance = balance × (1 + monthlyYield) + salary × 8%   (each month)

What you can withdraw depends on how the contract ends:

Dismissal without just cause — full balance plus a 40% penalty (multa rescisória), all withdrawable.
Mutual agreement (distrato) — 20% penalty, and 80% of the balance can be withdrawn.
Resignation — no penalty; the balance generally stays in the account.
Just cause — no penalty and the balance is not released.

Example

On a R$3,000 salary after 5 years, roughly R$240 a month flows into the FGTS, building a balance of around R$14,000–R$15,000 with yield. Dismissed without cause, you withdraw that balance plus a 40% penalty of about R$5,800 — the most favourable exit. Resign instead and there is no penalty and no withdrawal.

Notes

This focuses on the FGTS and its penalty. The full rescisão also includes notice pay, accrued holiday plus the one-third bonus, and the proportional 13th salary — add those for a complete final settlement.