CLT or contractor paid in dollars: compare costs, risks and net value
You get a contractor offer in dollars and wonder: is it better than your current CLT? Comparing the two gross numbers misleads, because they include very different items. CLT comes with built-in rights and deductions; a contractor paid in dollars is “full” but you take on costs and taxes yourself. To decide well, you need to compare apples to apples.
By Carlos Jacon · Founder of CareersForge · Senior Engineering Manager
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How to compare the costs of CLT and an international contractor?
Put both offers on the same period and in the same currency. For each one, estimate the annual net amount and separately note benefits, costs, reserves and risks. Only after that compare the total and what changes in your routine.
This calculation is a decision reference, not accounting, labor or tax advice. Rates and classifications depend on the contract, the activity, the municipality and your situation; validate the scenario with qualified professionals before signing.
- CLT: salary, 13th salary, vacation with one third, FGTS, social security (INSS), bonuses and benefits.
- Contractor: revenue converted, taxes, accounting, exchange and bank/platform fees.
- Your own reserve: vacation, periods without contract, health and equipment.
- Risk: job stability, exchange rate variation, payment timing and contract termination.
What’s the difference between CLT in Brazil and a contractor paid in dollars?
Under CLT, the employer collects charges and guarantees rights: 13th salary, vacation with one third, FGTS, INSS, and notice period. Net salary is already after deductions, and several benefits may be included.
As a contractor (PJ) for a foreign company, you receive a “full” dollar amount, but you’re responsible for taxes, accounting, and provisioning your own equivalent of 13th salary, vacation and emergency savings. The burden depends on your company’s tax regime (Simples Nacional, Lucro Presumido) and, under Simples, the so-called Fator R, which compares your payroll to revenue and can change the annex you fall into. It’s not better or worse per se: it’s a different structure that requires organization.
What does the dollar salary include (and what doesn’t)?
The dollar amount is usually gross and without Brazilian benefits. Before comparing, list what is NOT included and what you will have to cover.
- PJ taxes and accounting (vary by regime, Simples Nacional or Lucro Presumido, and by municipality).
- Exchange spread and fees from the bank or platform to bring the money to Brazil (IOF on export-of-service receipts can be zero depending on the classification and Central Bank rules; confirm with your accountant).
- Your own reserve for vacation, 13th salary and months without contract.
- Health plan, equipment and benefits that CLT sometimes covers.
How to really compare the two offers?
Bring both to the same ground: annual net amount in your pocket, after everything. Add what CLT gives you over the year (including 13th salary, vacation and benefits) and compare with the contractor in dollars already converted and net of your costs.
Illustrative example (fictional numbers)
- Contractor: US$5,000/month x 12 = US$60,000/year. Converted and after exchange, PJ taxes and accounting, you end up with an annual net X.
- CLT: monthly salary + 13th salary + 1/3 vacation + FGTS + benefits = an annual total Y.
- The decision is not US$5,000 vs the CLT monthly salary: it’s net annual X vs Y, plus the value you place on stability, autonomy and a hard currency.
When is CLT still the better choice?
Money is not everything in the calculation. CLT delivers predictability, rights and less bureaucracy, which can weigh more than a bigger dollar number depending on your situation.
Assess stability, tolerance for risk (exchange and contract end), willingness to manage PJ and how much the hard currency protects you. For some, the contractor paid in dollars clearly compensates; for others, CLT’s peace of mind is worth the trade-off.
Comparison checklist
Before deciding between the two, check that the comparison is fair.
- Did you convert the contractor to an annual net amount after exchange and taxes?
- Did you add CLT’s 13th salary, the 1/3 vacation bonus, FGTS and benefits?
- Did you consider your reserve for vacations and months without contract for the contractor option?
- Did you weigh stability, autonomy and exchange protection, not just the number?
- Did you talk with an accountant about the taxes in your case?
Frequently asked questions
Is it fair to compare the gross dollar salary with the CLT salary?
No. They include different things: CLT includes 13th salary, vacation, FGTS and benefits; the contractor in dollars is gross and you cover taxes, accounting and your own reserves. The fair comparison is by annual net in your pocket, after everything.
How much should I set aside from a dollar salary for taxes and reserves?
It depends on your tax regime (Simples Nacional or Lucro Presumido) and, under Simples, the Fator R, plus the municipality and your costs, so the exact number comes from your accountant. The idea is to provision PJ taxes, accounting and a reserve for vacation, 13th salary and months without contract instead of spending the full amount. As an illustration, many people set aside a fixed slice of each receipt—e.g., a percentage for taxes plus a bit for 13th and vacation—but the exact figure is what your accountant will calculate for your case.
Is a contractor paid in dollars always better than CLT?
No. It often pays more in a hard currency, but requires managing PJ, dealing with exchange and foregoing CLT rights. For those who value stability and simplicity, CLT can be better; for those who accept risk and bureaucracy, the contractor tends to yield more.
Which tool helps compare CLT and an international contractor?
Use a calculator that puts both regimes on the same period and shows assumptions for taxes, benefits, exchange and reserves. CareersForge’s comparator offers an estimate to structure the discussion, but it doesn’t replace an accountant, lawyer or contract review.