Payroll-deductible loans now reach severance pay and FGTS at dismissal

What’s happening

Under Labor Ministry Ordinance 1,115/2026, workers with private-sector payroll-deductible loans (Crédito do Trabalhador) can pledge up to 35% of severance pay, 10% of their FGTS balance and 100% of the FGTS dismissal fine as collateral; FGTS-backed loans are capped at 1.99% a month, against an average of about 3.6% for these loans in June 2026. Employers must check the loan platform for the updated balance and pledged percentages before deducting at termination.

What to do

Make sure payroll checks the Crédito do Trabalhador platform before every termination, and offer guidance so employees understand what pledging their FGTS means.

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