Brazil's informal entrepreneurs face low INSS coverage and earnings

More than 38 million Brazilians work as self‑employed or without a formal contract, making access to social security contributions essential. The government outlines three INSS contribution plans for 2026: a regular 20 % rate for higher benefits, a simplified 11 % rate for retirement by age, and a low‑income 5 % rate for vulnerable households.

A Sebrae study for the first quarter of 2026 shows that only 19.5 % of informal entrepreneurs were contributing to the INSS, leaving 80.5 % without coverage. Of the 30.2 million entrepreneurs nationwide, 19.4 million operate informally, mainly in services (42.2 %). Formal entrepreneurs earned on average R$ 6,688.89, nearly three times the R$ 2,253.04 average of informal workers, and both groups lost real purchasing power due to inflation despite nominal income growth.