CLT x PJ: what are the main differences?
One of the main doubts of Brazilian professionals is between the hiring modalities available in the labour market today. Which is better: to be CLT or to be PJ? This is not an easy question, since many criteria need to be evaluated and it depends on your individual reality. Both hiring possibilities are great and have a little different value. Usually, the PJ vacancies (legal entity) offer a higher salary, since in the end you’re providing a service and have less obligation to a company. And this is a great point to consider. The vacancies governed by the Consolidation of Labor Laws (CLT) have a lower salary. But in this case, you have total employment relationship with the company and some benefits that must be provided by the workplace, which are guaranteed by law and the signed portfolio. The main difference between both is in the hiring. CLT is the work contract with a signed work permit. With the PJ, the hiring occurs through a physical contract and the issuance of an invoice at the end of the service.
How is CLT contracting done?
As mentioned before, CLT hiring is done through the CTPS: the Work and Social Security Card. Some time ago, hiring was done through this physical document, therefore, the CLT modality is known as “signed portfolio”. Nowadays, it is possible to sign the card online with the Digital Workbookthus removing the obligation to use the signature on the physical document and the presence of the employee at the time of signing.
What are the rights of a CLT professional?
The rights of a CLT professional are guaranteed by the Consolidation of Labor Laws, a document regulated in 1943 and put into practice in 1945 by the then president, Getúlio Vargas. In the CLT there are eight chapters and 922 articles that speak precisely about the rights of the worker who works under this regime. There are laws that talk about the working day, rest period, FGTS and other relevant issues.
What are the costs of CLT hiring for the contractor?
Hiring an employee through CLT involves costs to the employer. The main ones are listed below:
- 8% of the employee’s salary to the FGTS;
- the value of a full salary for holidayplus ⅓;
- the value of a full salary for the 13th salary;
- up to 6% of salary to pay for transport vouchers.
There may also be other costs for the employer, but it all depends on the benefits offered by the employer. These are the mandatory ones.
How is PJ contracting done?
The PJ hiring is done through a contract that lists your obligations to that company. This modality needs an invoice emission, that is, you need to be a company, the hiring is made between company and company. The modality is also known as B2B (business to business). In this modality, the professional does not have an employment relationship with the company. You are just a service provider for that location. This means that, in this modality, you do not have any employee obligation. In the PJ hiring, your functions are restricted to what was agreed by the contract. Many companies currently hire “employees” for PJ precisely to escape what the CLT regulates as rights. But be aware that the practice of hiring a service provider and imposing employee obligations is incorrect.
What are the advantages of a PJ professional?
Being a Microempreendedor Individual (MEI), the most common type of legal entity in Brazil, has many advantages. But watch out! The MEI has a limit of R$81 thousand received per year. If your income exceeds this amount, you must fit into other categories, such as micro-entrepreneur. Know the advantages of being a professional PJ:
- own your own business.
- not have an employment relationship with the site.
- not have discounts on your benefit.
- you decide what to do with your money
What are the costs for the contracting party?
The PJ hiring is a desired modality by entrepreneurs because it has no costs. As you are not an employee, you do not receive FGTS, holidays and other rights guaranteed by those who are CLT. That is why it is important that you, as a service provider, charge a higher price than what is offered in the CLT for what you do. After all, with the value of the service, you will be the one who manages your money and will do whatever you want. In other words, you will decide what you spend your money on. For example, in CLT, you would receive food allowance even if you work at home office. As a PJ, you can apply this value and save it for your holidays.
What are the costs for the professional of employing a private company?
To open an MEI, for example, there are no costs. However, to issue invoices, you need to link your CNPJ to a municipality and make your tax and social contribution contributions. The good thing about being an MEI is that even if you don’t have an employment relationship, you can make your contribution to social security and enjoy rights such as maternity pay, sickness benefit, death pension and contribute to the INSS So, it is worth remembering that it is important to include these values that you have to bear in your services.
CLT x PJ: disadvantages of each regime
The disadvantage of being CLT is the compliance with 40 or 44 hours per week (depending on your employment contract) and the mandatory discounts in the payroll. The disadvantage of being a PJ is precisely the lack of rights that ensure the worker. Even though there are some that you have access to, such as maternity pay, they are not all listed in the CLT. This makes you somewhat helpless in certain situations, such as the termination of a contract of service. If you are not prepared and have money to spare, it can be a tight situation.
Changing from CLT to PJ: how to start?
The first step for those who think of changing from CLT to PJ is to open the CNPJ. You can do this through the Federal Government sitesite, in the Companies and Businesses. There are many financial education videos that also mention how to make all the processing of the MEI for the issuance of Invoice and the like. It is good to get rid of the head also the relationship of employer x employee, because in this regime, you are your own boss.
Between CLT and PJ, which is more advantageous?
This is a question only you can answer, but FinanceOne can give you a nudge. Use the CLT vs PJ Comparison Calculator and see what’s best for you. Sometimes, you belong to a profession that offers more opportunities as a private individual than as a permanent employee. On the other hand, CLT may be a safer option for you in relation to the benefits offered by the job, such as health insurance and child care. Use the calculator and see how simple and easy it is to know which regime is ideal for you.
- First, enter your salary.
- Then, your monthly transport voucher amount.
- Then enter your monthly meal voucher amount.
- Now enter the total amount of other benefits.
- Finally, enter the tax percentage of the PJ Simples Nacional.
- Click on calculate.
That’s it! Now you know which modality is better and more advantageous!
