President Luiz Inácio Lula da Silva (PT) signed a decree that establishes the new value of the minimum wage, which will increase from R$1,412 to R$1,518, an increase of 7.5% (R$106).
The new amount comes into force on January 1, 2025, impacting workers’ salaries from February onwards.
The decision was announced by Palácio do Planalto and takes into account 2024 inflation and the growth of the Brazilian economy, measured by Gross Domestic Product (GDP).
In addition to the adjustment, Lula sanctioned a law that changes the formula for calculating the minimum wage, establishing a ceiling of 2.5% for the real increase.
This change aims to adapt the growth of the salary floor to the limits defined by the government’s new fiscal framework, which will extend between 2025 and 2030.
With the new rule, the minimum wage adjustment will be reduced by around R$10 compared to what it would be if the previous criteria were maintained.
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The new minimum wage adjustment formula considers the sum of inflation measured by the National Consumer Price Index (INPC) and real GDP growth from two previous years, but now with a defined ceiling and floor.
Under the new rule, the increase cannot be less than 0.6% nor greater than 2.5%. This measure is part of a package of actions by the Ministry of Finance to balance public accounts and reduce expenses.
The impact of the new minimum wage growth ceiling should result in savings of up to R$15.3 billion in the coming years, since several social and social security benefits are linked to the minimum wage.
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Every R$1 increase in the minimum wage generates additional expenses of approximately R$392 million, according to government calculations.
The minimum wage is the lowest remuneration that a formal worker can receive in Brazil and is a crucial indicator for the economy, affecting around 54 million people in the country.
The Brazilian Constitution establishes that the minimum wage must be able to meet the basic needs of workers and their families, with periodic adjustments to preserve purchasing power.
