The minimum wage in Brazil for 2025 came into effect on January 1st, increasing to R$ 1,518. This increase of R$ 106 compared to the previous year’s value of R$ 1,412 represents a 7.5% adjustment.

The increase in the minimum wage was determined by President Luiz Inácio Lula da Silva (PT) just before the new year, on December 30. He signed the decree that readjusts the amount based on a new correction rule.

This article will enlighten how the minimum wage works in Brazil and so that you can also compare it with salaries around the world.

Read to the end to understand how this can positively impact your company.

What is the minimum wage in Brazil?

The minimum wage is a labor right established in 1940 during the government of Getúlio Vargas as part of the Consolidation of Labor Laws (CLT). It was created to set the minimum amount that employers must pay workers for the production of goods and services, ensuring a wage floor that does not discriminate based on gender.

Its main objective is to ensure that workers and their families can meet basic needs such as housing, food, education, healthcare, leisure, clothing, hygiene, transportation, and social security. Moreover, its value is regularly adjusted to preserve its purchasing power, taking into account inflation and, in some cases, economic growth.

When the minimum wage was first introduced, there were 14 different values across Brazil, with some regions receiving up to three times more than others, reflecting the country’s economic disparities. It was only with the 1988 Constitution, in Article 7, that the wage was unified nationwide, becoming mandatory and standardized.

Since then, the minimum wage has become one of the pillars of Brazil’s economic and social system, directly influencing the income of millions of workers.

When does the new minimum wage for 2025 take effect?

According to the Federal Government’s announcement, the new minimum wage of R$ 1,518 officially took effect on January 1, 2025. Workers who receive monthly payments will start noticing the new amount in their salaries from February 1.

This 7.5% adjustment takes into account the inflation rate for 2024, as measured by the INPC, and the GDP growth of 2023, following the wage appreciation policy that ensures a real increase of up to 2.5% above inflation. However, it is important to remember that the net amount received may be lower due to the social security contribution of 7.5%, which reduces the net minimum wage to approximately R$ 1,404.15.

What will the minimum wage adjustment be in 2025?

As mentioned earlier, the minimum wage adjustment for 2025 was 7.5%, increasing from R$ 1,412 to R$ 1,518, representing a nominal increase of R$ 106. This adjustment takes into account the inflation accumulated by the INPC, which closed at 4.84% for 2024, ensuring a real gain of 2.5%.

This type of increase above inflation follows the minimum wage appreciation policy adopted by the Federal Government, aiming to improve workers’ purchasing power.

What is real wage growth?

Real wage growth occurs when the adjustment exceeds the inflation rate, meaning the worker not only maintains but also increases their purchasing power.

In practical terms, the real gain of 2.5% means that, in addition to compensating for the overall price increase, the new minimum wage will allow for greater consumption capacity and potentially a better quality of life.

After the 7.5% social security contribution is deducted, the net amount received will be approximately R$ 1,404.15, emphasizing the importance of understanding the impact of deductions on the monthly budget so that you can organize your finances.

What changes with the new minimum wage in 2025?

Starting from February 1, 2025, workers and beneficiaries whose earnings are tied to the minimum wage will begin receiving the adjusted amount of R$ 1,518. This 7.5% increase directly impacts various categories and benefits, such as:

• Unemployment Insurance: Workers dismissed without just cause will have their benefit amounts adjusted according to the new minimum wage.
• Pensioners and retirees from the INSS: Those who receive a minimum wage as a benefit will have their payments corrected.
• PIS/Pasep: The wage bonus will also be recalculated based on the new minimum wage.
• Domestic workers: The new minimum wage applies to the salaries of these professionals, ensuring the mandatory adjustment.
• Alimony: Payments linked to the minimum wage will be updated with the new amount.

Read also: How to manage human resources um Brazil?

How is the minimum wage increase calculated?

The calculation of the minimum wage adjustment is based on two main factors, according to the appreciation policy adopted by the Federal Government. These factors are:

1. Inflation measured by the INPC (National Consumer Price Index)
   The INPC reflects the price variation for low-income families, ensuring that the minimum wage keeps up with the cost of living. For example, if the inflation measured by the INPC is 4.84%, as it was in 2024, the adjustment should cover at least this percentage to prevent a loss of purchasing power.
2. Real GDP growth (Gross Domestic Product)
   In addition to inflation, the real GDP growth of the two previous years is also considered. For 2025, the real gain of 2.5% was calculated based on the economic growth of 2023, added to the inflation adjustment.

Let’s take a look at other indexes around the world:

Countries with the highest minimum wages in the world

• Luxembourg: The country leads with a monthly minimum wage of approximately €2,571.
• Australia: With an hourly payment model, the minimum wage is AUD 23.23, totaling about AUD 3,531.20 per month.
• New Zealand: Following the same hourly logic, the minimum wage is NZD 23.15, which sums to approximately NZD 3,700 per month.
• Germany: Workers receive €12.41 per hour, totaling around €1,985.60 per month.
• Belgium: The monthly minimum wage is €2,070.48.
• United Kingdom: Britons earn £11.44 per hour, which equals approximately £1,981.41 per month.
• France: The monthly wage is €1,767.
• South Korea: The minimum wage, paid hourly, is 9,620 South Korean won, or around 1,666,184 won per month.
• Canada: With variations between provinces, the national average is CAD 17.20 per hour, totaling CAD 2,979.04 per month.
• Netherlands: The monthly minimum wage is €2,069.96.

Countries with the lowest minimum wages

Among the countries with the lowest minimum wages are Mexico, Brazil, and Russia. In this order, these three countries lead with the lowest minimum wage values for their populations.

• In Mexico, workers receive MXN 7,470 per month.
• In Brazil, the minimum wage is R$ 1,518.
• In Russia, workers earn RUB 19,242 per month.

Great business opportunities for your company

If your company is thinking of investing in Brazil, this could be an excellent idea, considering that Brazil is a continental country that encompasses countless business sectors. 

After evaluating the minimum wage in Brazil today, it’s noticeable that it is a country that offers good opportunities for nearshoring, offshoring or even starting a new business. 

Whatever is your company choice, you can count on Europartner to simplify and optimize this investment process. 

We have been leading successful deals for foreign companies in Brazil for over 15 years and the next one could be yours. Contact us today, our experts will be waiting for you.