FGTS Severance Penalty

Severance fine on FGTS: rules and computation

When someone is dismissed without just cause, the employer owes a 40% fine on the whole FGTS balance built up over the contract, not only the most recent deposit. LC 110/2001 sets that base. There used to be an extra 10% contribution paid to the federal government, but Law 13.932/2019 ended it, so from 2020 onward the employee gets the full 40% and nothing goes to the Treasury. The math itself is simple: fine = FGTS balance · 0.40.

The 2017 labor reform added a mutual-agreement termination (art. 484-A CLT, Law 13.467/2017). There the fine falls to 20% and the employee can withdraw 80% of the FGTS balance. Dismissal for just cause pays no fine at all and unlocks no FGTS withdrawal. To put numbers on it: someone earning R$ 3,000 for 2 years piles up roughly R$ 5,760 in FGTS, which works out to a fine near R$ 2,300 if dismissed without just cause.

Brazilian context

The fine is settled when the severance package (TRCT) is homologated and goes through GRRF straight into the employee's FGTS account at Caixa, which then releases the money. Alongside the 13th salary, vacation and notice period, it ranks among the heaviest lines in a Brazilian severance, so it is worth working out before you plan your finances right after a dismissal.

FAQ

Is the fine paid in cash to the employee? No. It lands in the FGTS account via GRRF and is released to the employee together with the rest of the balance.

Does the 10% contribution still exist? No, Law 13.932/2019 ended it. Since January 2020 the only piece left is the 40% paid to the employee.

What if I am on saque-aniversário when I am fired? The 40% fine still comes to you, but the rest of the balance stays locked; all you can pull is the birthday slice each year. In that situation the fine ends up being the only real FGTS cash you see at dismissal.