The new Brazilian monthly minimum wage of BRL 1,621 (USD 294.5) came into effect this Thursday (Jan. 1). The adjustment of 6.79 percent, or BRL 103, was confirmed by the Ministry of Planning and Budget on December 10. The previous minimum wage was BRL 1,518.
The new value was announced after the release of the National Consumer Price Index (INPC), which is used to calculate the annual minimum wage adjustment. The index registered 0.03 percent in November and accumulated 4.18 percent over 12 months.
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According to estimates from the Inter-Union Department of Statistics and Socioeconomic Studies (Dieese), the new minimum wage will inject BRL 81.7 billion into the Brazilian economy. The calculation takes into account the effects on income, consumption, and tax revenue, even under a scenario of stricter fiscal constraints.
Rule
The rule for adjusting the minimum wage stipulates that the value must be based on two factors: one based on the 12-month accumulated INPC (National Consumer Price Index) through November of the previous year, that is, 4.18 percent, and another based on economic growth from two years earlier.
On December 4, the Brazilian government’s statistics agency IBGE revised the 2024 Gross Domestic Product (GDP) - the sum of goods and services produced in the country - confirming an expansion of 3.4 percent.
However, the fiscal framework, a mechanism that controls the evolution of public spending, determines that gains above inflation are limited to a range of 0.6 percent to 2.5 percent.
According to the rule, the minimum wage in 2026 would be BRL 1,620.99 and, with the rounding provided for by law, it becomes BRL 1,621, an adjustment of 6.79 percent.
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