Brazil Sets 2026 Minimum Wage at R$1,621, Effective January 1

Overview

• The new floor represents a 6.79% increase from R$1,518 and will be paid starting in February for January work and benefits.
• Under the law, the INPC through November (4.18%) combines with 2024 GDP growth, but the 2.5% real‑gain cap limited the result to R$1,621 rather than roughly R$1,636.
• The minimum serves as a legal reference for wages and for retirees, pensioners and social benefits such as the BPC.
• Editorial analysis cites fiscal pressure as about 70% of previdenciary benefits are indexed to the floor, with Previdência spending above R$1.1 trillion, a projected 2026 deficit near R$340 billion, and an estimated R$400 million cost for each real added to the minimum.
• A third straight real increase under President Lula is reported to bring cumulative gains of 24.5% versus estimated 14.6% inflation, as a Banco Central study highlights potential inflation effects from higher demand and firms’ cost pass‑through.