At a glance
- In June 2026, the Ministry of Labor and Employment announced the implementation of new functionality for Employee Credit Program (Program) transactions.
- The new functionality allows employees to offer, inter alia, severance-related guarantees in Employee Credit Program transactions.
- The guarantees may include 35% of severance amounts, up to 10% of the Brazilian Severance Indemnity Fund (FGTS) balance and up to 100% of the FGTS termination fine.
- Employers should be prepared for related payroll, termination and eSocial / FGTS Digital processes.
In June 2026, the Ministry of Labor and Employment announced the implementation of a new functionality for Program transactions, allowing employees to offer guarantees through CTPS Digital (digital version of the Brazilian Employment Record Book) and financial institution channels.
The Program
The Program is a Brazilian credit program that provides employees with access to more affordable loans backed by their employment relationship. It was introduced by the Brazilian government in March 2025.
The new functionality announced in June 2026 expands the program by allowing employees to offer guarantees via CTPS Digital. In this context, guarantees refer to the assets or entitlements that an employee can pledge as collateral to secure a loan. Specifically, these include:
- 35% of severance amounts: Upon termination, a portion of the severance payments owed to the employee can be directed to the lending institution.
- Up to 10% of the FGTS balance: The FGTS is a mandatory savings fund into which employers deposit 8% of the employees' gross salary each month. The employee may pledge up to 10% of this accumulated balance as collateral loan.
- Up to 100% of the FGTS termination fine: When an employee is dismissed without cause, the employer must pay a penalty equal to 40% of the total FGTS balance. This amount can also serve as collateral.
In essence, the employee pledges these future entitlements as security. If the employee defaults on the loan, the relevant amounts are paid directly to the financial institution upon termination of employment rather than being released to the employee.
Employers should be prepared to obtain, through the Emprega Brasil Portal, information on the percentages offered as guarantees over severance amounts, report the corresponding deductions in eSocial (the Brazilian government electronic employment reporting system) and process the deducted amounts through FGTS Digital (digital platform for FGTS administration).
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