How to Pay a Software Contractor in Brazil (2026)

Paying a developer in Brazil is simpler than most US companies expect. There is no payroll, no Brazilian registration on your side and no tax to withhold. It is a business paying another business’s invoice across a border. What trips companies up is the paperwork around it: the tax form to collect, who pays the transfer fees, and a contract that says how and when money moves.

This post walks through it in the order it happens. It is part of the complete guide to hiring a senior engineer in Brazil; for working hours across time zones, see Brazil time zones for US teams.

What does the contractor send you?

An invoice from their Brazilian company. Senior contractors in Brazil usually work through their own company, known as a PJ (pessoa jurídica), with a company registration number (CNPJ). The invoice should show:

• the company’s legal name, CNPJ and address;
• your company’s name and address;
• the period and the services, matching the contract;
• the amount and currency;
• the bank or payment details for the transfer.

Separately, the contractor issues a Brazilian electronic service invoice (NFS-e) for the same amount, because Brazilian tax law requires it. That document is for their accountant and the Brazilian tax authority; you do not need to do anything with it, although some companies ask for a copy.

How do you send the money?

There are three common ways, and the contractor usually tells you which one they prefer:

Whichever you choose, agree in the contract who pays which fees. The fair default is that each side pays its own: you pay the sending fee, the contractor pays the receiving and conversion costs.

Which US tax forms do you need?

Before the first payment, ask the contractor’s company for a Form W-8BEN-E, the form a foreign entity uses to certify it is not a US person (an individual would use a W-8BEN). Keep it on file; you do not send it to the IRS.

For a foreign contractor doing the work outside the US, US information reporting such as Form 1099-NEC generally does not apply, and neither does withholding, because the income is not US-sourced (Remitly’s summary of the IRS rules). That changes if the contractor is a US citizen or resident, or if they do the work while in the US, so confirm the details with your accountant.

What happens on the Brazilian side?

The contractor’s company pays its own taxes in Brazil. You do not register anything in Brazil or withhold anything.

Two rules make exporting services cheaper for the contractor, which is part of why Brazilian rates are competitive:

• ISS, the municipal service tax, does not apply to exports of services (Complementary Law 116/2003, art. 2). The exception is work whose result happens in Brazil, which is not the case for software built for a US company.
• PIS and Cofins, two federal contributions on revenue, are exempt on service exports when the payment brings foreign currency into Brazil, as the Brazilian tax authority confirmed in March 2026 (Solução de Consulta 34/2026).

This is why paying from abroad in foreign currency matters to the contractor. Paying a Brazilian contractor in reais from a Brazilian account can cost them those exemptions.

What should the contract say about payment?

Most payment disputes come from things nobody wrote down. The clauses worth having:

• Currency and amount. Fix the rate in US dollars. Leaving it in reais puts exchange-rate risk on you; leaving it vague puts it on whoever loses that month.
• Billing cycle and terms. Monthly invoice at the end of the month, paid within a set number of days, is the norm for ongoing work.
• Fees. Who pays the sending, receiving and conversion costs.
• Scope of the fee. A fixed monthly rate for an expected workload, and what happens when the workload changes.
• Intellectual property. The code belongs to your company once paid. Say it explicitly: the default ownership rules differ between countries.
• Tax responsibility. Each party is responsible for its own taxes in its own country.

I invoice clients from my own Brazilian company. It is the simplest setup for both sides, and it keeps the relationship a real business-to-business contract.