What FGTS is
FGTS (Fundo de Garantia do Tempo de Serviço) is a severance fund. Every month the employer deposits 8% of pay into an account at Caixa in the worker's name. On dismissal without cause the employer adds a 40% penalty on all deposits made during the contract (20% in a mutual agreement).
Workers who chose the birthday withdrawal (saque-aniversário) still receive the penalty on dismissal, but the balance stays locked.
Frequently asked questions
Can I withdraw FGTS if I resign?
Not on resignation. The balance stays in the account and can be withdrawn in other cases, such as buying a home or retirement.
Is the 40% penalty calculated on the current balance?
No. It is calculated on all deposits made during the contract, corrected, including amounts already withdrawn.