According to the Brazilian labor legislation, it is mandatory for workers to save part of their rent into Fundo de Garantia por Tempo de Serviço (FGTS) accounts. These accounts yield below-market interest rates and have a limited liquidity. This paper proposes a model to analyze the effects the FGTS legislation causes on the worker´s income. We divide the worker´s income in two portions, the liquid wages and severance payments, on which FGTS might produce different effects. From the model, we extract that the FGTS decreases formal worker´s wages and that, proportionally, the larger the probability of being fired, the larger the decrease. That result comes from the fact that, when provisioning for the severance payments in the future, the employer benefits from the difference between FGTS account returns and market interest rates. The effect of the FGTS on the worker´s total income, on the other hand, is ambiguous. The fact that all the FGTS savings and fines are exempt from taxes - for both the employer and the employee - might compensate the worker from the low returns of this mandatory savings, increasing the total worker´s income. Finally, using the 2001 FGTS Agreement changes in the legislation, we found some empirical evidence that the FGTS decreases wages of formal workers.