As of January 1, 2025, Brazil’s minimum wage has been set at R$ 1,518 (€244.4), representing an increase of R$ 106 compared to the previous year’s R$ 1,412 (€227.33)—a 7.5% adjustment. This increase was enacted by President Luiz Inácio Lula da Silva on December 30, 2024, under a new formula that ties adjustments to inflation and GDP growth.
New formula and fiscal framework
The adjustment follows a legal framework approved in December 2024, part of a fiscal package introduced in November. The formula is based on:
- Accumulated inflation (4.84%), measured by the INPC (National Consumer Price Index) over the 12 months prior to November.
- GDP growth (3.2%), reflecting the economy’s performance two years earlier.
However, a cap limits the real annual increase to 2.5% above inflation until 2030. Without this restriction, the minimum wage would have reached R$ 1,528, but the cap reduced the adjustment by R$ 10.
Fiscal and social impacts
The revised framework balances social objectives with fiscal sustainability:
- estimated savings: R$ 35 billion (€5.6 billion) by 2030.
- impact in 2025: R$ 2.2 billion (€35.3 million).
These savings are particularly significant given that pensions and social benefits are directly linked to the minimum wage.
Key considerations for businesses and investors:
- Regulatory predictability:
- clear limits on wage adjustments through 2030 provide stability for financial planning.
- Boost to domestic consumption:
- the wage increase enhances purchasing power, supporting sectors tied to local consumption.
- Economic sustainability:
- the restrained fiscal policy strengthens Brazil’s economic framework, making it more attractive for investment.
Optimize your operations in Brazil
For companies looking to expand or solidify their presence in Brazil, efficient payroll and accounting management is crucial to ensure compliance and capitalize on this growing market. Auxadi, with a presence in over 50 countries, is your strategic partner to operate confidently and efficiently.
Contact Auxadi today to maximize your success in Brazil
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All information contained in this publication is up to date on 2025. This content has been prepared for general guidance on matters of interest only, and does not constitute professional advice. You should not act upon the information contained in this chart without obtaining specific professional advice.No representation or warranty (express or implied) is given as to the accuracy or completeness of the information contained in this content, and, to the extent permitted by law, AUXADI does not accept or assume any liability, responsibility or duty of care for any consequences of you or anyone else acting, or refraining to act, in reliance on the information contained in this chart or for any decision based on it.