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Each company must make their own decisions about how they meet their tax obligations.
Under Article 470 of the Consolidation of Labor Laws (CLT), employees in Brazil are entitled to compensation for increased expenses during business trips. Employers can either reimburse specific expenses based on receipts or provide daily allowances, known as per diem, that cover costs like food, accommodation, and transport.
According to Article 457, paragraph 2 of the CLT, these per diem are not considered taxable income, and there is no tax-free limit. Previously, per diem was tax-free, only up to 50% of salary, but this limit was removed in 2017.
Thus, employers can set their own per diem rates. Employers typically determine this rate by evaluating the average daily expenses, sometimes adjusting it based on the specific destination.
However, Brazilian jurisprudence requires that per diem rates be reasonable and employers ensure that per diem genuinely covers expenses and is not simply a form of disguised remuneration.
Last changed 2026-01-26