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Obrigatório vs. compulsório

Both obrigatório and compulsório translate to mandatory or compulsory, but they are used in very different contexts. Obrigatório is the standard, everyday word used in common conversations, signs, and general rules. Compulsório is a formal, technical term implying an external force or automatic legal execution, mostly reserved for law, economics, and administration.

Obrigatório

A2
This is the most common word for mandatory. It describes something imposed by a general rule, law, social norm, or necessity. If you are translating required or mandatory in a general sense, this is almost always the correct choice.
O uso de cinto de segurança é obrigatório no banco de trás.
(The use of a seatbelt is mandatory in the back seat.)
O voto no Brasil é obrigatório para cidadãos entre 18 e 70 anos.
(Voting in Brazil is compulsory for bus citizens between 18 and 70 years old.)
A presença na reunião de hoje não é obrigatória.
(Attendance at today's meeting is not mandatory.)
Você precisa preencher todos os campos obrigatórios do formulário.
(You need to fill out all the required fields on the form.)
A leitura deste livro é obrigatória para o exame final.
(Reading this book is mandatory for the final exam.)

Compulsório

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This word implies that the action is forced by authority, inherently coercive, or executed automatically by law regardless of the person's will. It is rarely used in daily conversation and appears mostly in specific legal terms such as aposentadoria compulsória (mandatory retirement due to age) or empréstimo compulsório (forced government loan).
O juiz decidiu a favor da aposentadoria compulsória do servidor público aos 75 anos.
(The judge ruled in favor of the compulsory retirement of the public servant at age 75.)
O governo instituiu um empréstimo compulsório para combater a inflação.
(The government instituted a compulsory loan to fight inflation.)
A internação compulsória é uma medida extrema para tratar dependentes químicos.
(Compulsory hospitalization is an extreme measure to treat chemical dependents.)
O contrato prevê arbitragem compulsória em caso de disputa.
(The contract provides for compulsory arbitration in case of a dispute.)
Houve um recolhimento compulsório de impostos sobre a herança.
(There was a compulsory collection of taxes on the inheritance.)

Summary

In short, use obrigatório for almost everything: traffic laws, school rules, dress codes, and application forms. Only use compulsório if you are discussing specific legal mechanisms, economic measures, or court-ordered actions where the subject is forced to comply by an external power.