What is fgts?

FGTS stands for Fundo de Garantia do Tempo de Serviço, which is a mandatory severance fund for employees in Brazil. Employers are required to deposit an amount equal to 8% of the employee's monthly salary into the FGTS account, which is managed by the Caixa Econômica Federal.

The funds in the FGTS account are meant to provide financial security for employees in case of involuntary termination, retirement, or certain other life events. Employees are not able to directly access the funds in their FGTS account while they are still employed, but they can withdraw the money in certain situations such as buying a home, retiring, or undergoing a medical emergency.

FGTS accounts also earn interest over time, which can help the funds grow and provide even more financial security for the employee in the future. It is important for both employees and employers to understand the rules and regulations surrounding FGTS to ensure compliance and to maximize the benefits for the employee.