Administrative reform: Brazil expected to spend a record R$1.7 trillion on public servants in 2025

BRASILIA — Brazil is expected to spend R$1.7 trillion on public servants in 2025, including federal, state and municipal spending on active and retired employees, while discussing administrative reform .

If the figure is confirmed, it will be a record. The reform under discussion in the National Congress is not expected to affect job security for civil servants, but rather to impose performance evaluation measures and correct some distortions, such as excessive salaries above the constitutional ceiling.

Estadão gathered data from the budgets of the Union, the 26 States, the Federal District and 5,143 municipalities (more than 90% of the total) with the values ​​of personnel expenses and charges scheduled for this year in the budget laws and reports submitted to the National Treasury.

The final number will be known in 2026, with actual expenses and consolidation that excludes duplications, such as transactions between entities, but the predicted value indicates an increase in personnel expenses.

In the Chamber of Deputies, the proposal is being presented by Representative Pedro Paulo (PSD-RJ), coordinator of the working group tasked with formulating the administrative reform. The proposal should not affect the tenure of public servants, which guarantees continued employment regardless of the current administration, until the employee's retirement.

The congressman, however, wants to establish a performance-based employee evaluation program, a review of public administration spending, and a fixed pay scale that determines how much each employee should receive . He also advocates for changes that would limit salaries above the constitutional ceiling (currently R$46,300), legal fees, and 60 days of vacation.

Data from 2022 show that Brazil employs fewer public servants compared to other countries (12.1% of total employment compared to 20.8% of the OECD average), but spends more (13.5% of GDP, compared to 9.3% of the OECD), considering active and retired civil servants in the Union, States and municipalities, according to data from the Organization for Economic Cooperation and Development (OECD) collected by Fecomércio-SP .

"Brazil doesn't employ as many people, but it spends a lot on public servants and, here, the fundamental difference, and especially in the federal government, is the remuneration, which is 67% higher for the same positions in the private sector", says economist Antonio Lanzana , president of the Superior Council of Economics, Sociology and Politics of Fecomércio-SP and professor at the University of São Paulo (USP) .

For the expert, the administrative reform hits a key issue that has been preventing Brazil from growing further in recent years: productivity. "Anyone who expects administrative reform to solve Brazil's enormous public finances or deficits is mistaken," he assesses.

"The focus must be on improving the quality of services, especially those aimed at the poorest income groups, such as health and education, and increasing spending efficiency. Today, for example, you have public jobs for typists, elevator operators, and butchers—very strange things."

The Ministry of Management and Innovation in Public Services stated that it has been implementing several actions since January 2023 in the areas of personnel, organizations and expansion of the digital agenda with the aim of increasing the efficiency of the State and the delivery of public policies to the population.

"The growth in personnel expenses under the Lula III administration reconciles the sustainability of public accounts with the appreciation of public servants and the restructuring of the workforce. The federal executive's payroll represented 2.68% of GDP in 2022 and is projected to reach 2.59% of GDP in 2026," the ministry said.

Brazil has 11 million active civil servants, with disparity in salaries

Brazil has approximately 11 million active public employees, according to the Institute of Applied Economic Research (Ipea) , of which nearly seven million work in municipalities. Municipalities increased their employee numbers fourfold between 1985 and 2021.

Data collected by the institute indicate that spending on active personnel has not seen significant increases as a proportion of GDP, despite the increase in total values: it was 8.90% of GDP in 2002 and totaled 9.17% of GDP in 2024, but there is a disparity in salaries. Municipalities, with a greater hiring activity, surpassed states in spending in this comparison starting in 2021.

Felix Lopez, an IPEA researcher and coordinator of the Atlas of the Brazilian State, which compiles the data, says there's no basis for the idea that the public sector is bloated and growing out of control, but rather that we need to look at the efficiency of the administration. "We'll often need more staff, perhaps not in basic education, as the birth rate has fallen significantly, but certainly more doctors," says Lopez.

"At the federal level, for example, we don't have a workforce planning system. Often, it's political infighting and the ability to be friends with the king that gets you authorization to hire people in area A, B, or C, and then you go a decade without hiring anyone," says the researcher.

The highest-paid 10% in the public sector earn fifteen times more than the lowest 10%. When looking at the difference between branches of government, the Judiciary has an average monthly salary of R$16,000, while the Executive has an average monthly salary of R$4,500.

"The Judiciary has budgetary autonomy and simply increased its salaries, combined with an image as if judicial positions were something different in the Brazilian Republic," the expert observes. "We need to curb inequality at the top somewhat; this would greatly help reduce overall inequality, because it's the top that causes the disparity to widen."