Brazil federal regulations update temporary contracts and payroll loans

Recent updates to Brazilian federal regulations have established new parameters for temporary employment and payroll-deductible loans for federal executive employees.

Under Law 8.745/1993, as amended by Law 15.367 in March 2026, individuals previously under federal temporary contracts may only be rehired under the same law after a 24-month period. Exceptions apply if the previous contract lasted less than 24 months, in which case the waiting period matches the duration of the previous contract, with a minimum of 6 months. This quarantine does not apply if a new selection process involving exams is conducted by a different federal public law entity. Contract durations vary by purpose, ranging from 6 months for public health emergencies to 4 years for foreign visiting researchers.

Additionally, following the expiration of Provisional Measure No. 1.355 in August 2026, the margin for payroll-deductible loans for federal executive employees has returned to 45% of remuneration. This limit is divided into 35% for loans, 5% for payroll credit cards, and 5% for benefit cards. The maximum repayment term remains 120 months. Authorities advise employees to compare the Total Effective Cost (CET), including interest, taxes, and insurance, when selecting financial institutions.