If confirmed, the accusations could prove devastating for Mr Temer's crisis-hit administration, though he has vowed to prove his innocence.
He is already facing allegations he authorised paying bribes to silence a witness in a huge corruption scandal.
On Thursday he vowed in a TV address to stay on as president.
Joesley Batista, the chairman of the company JBS, alleges that Mr Temer was paid more than $2.5m (9m reais) over the last seven years for electoral campaigning and to pay allies.
Another company director says $4.6m was distributed to Mr Temer's allies in 2014 in the guise of official election campaign donations.
Former presidents Luis Inacio Lula da Silva and Dilma Rousseff received $50m and $30m respectively to fund political campaigns, the testimony says. Both have denied any accusations against them.
Separately, Prosecutor General Rodrigo Janot wrote in a court filing on Friday that Mr Temer was one of a number of politicians who obstructed investigations into the massive corruption inquiry known as Operation Car Wash.
A year ago, Mr Temer took office after Ms Rousseff's impeachment. Now there are calls for his removal too.
On Thursday Brazilian authorities released an audio recording where Mr Temer appears to be discussing bribes in conversation with Mr Batista.
- Temer's year in office
- A glossary of Brazilian corruption inquiries
- Brazil ex-Congress speaker Cunha jailed
- The probe, launched in March 2014, centres on companies that were
offered deals with state oil giant Petrobras in exchange for bribes,
which were funnelled into politicians' pockets and political party slush
funds.
The scandal has engulfed Brazilian politics, with a third of Mr Temer's cabinet under investigation for alleged corruption. Former president Lula is already facing five charges.
The man Mr Temer allegedly condoned the bribery of - Eduardo Cunha - is in prison for corruption, money laundering and tax evasion.
Both men played a key role in the downfall of Ms Rousseff, who was removed from office accused of illegally manipulating government accounts. She denies all the charges.
Mr Temer is already deeply unpopular in Brazil but his centre-right party has been able to govern as part of a coalition.
Opposition parties have been demanding snap elections and his impeachment.
It is the first time Mr Temer has become fully embroiled in Operation Car Wash.
[BBC SOURCES]
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