Employer of Record in Bolivia

Hiring independent contractors has boomed in popularity because of the cost savings and flexibility they offer. It can be a great option if you require niche skills or short-term project support. Contractors allow businesses to access specialized skills quickly, without the time and cost of setting up a local entity.

However, it’s important to know the limits of this model: contractors are not a substitute for full-time employees. Relying on them for ongoing, long-term roles can create serious compliance risks, including employee misclassification, which can lead to fines, back taxes, and reputational damage.

Playroll’s contractor management solutions make it simple to compliantly engage, onboard, and pay contractors around the world. We provide clear visibility into agreements, streamline payments, and reduce compliance risks – so you can focus on getting the work done. And when you’re ready to take the next step, we can help seamlessly convert contractors into full-time employees through our global Employer of Record service.

Businesses can only operate smoothly in Bolivia if they comply with local labor laws including drafting compliant employment contract agreements and meeting taxation and payroll obligations. Learn more about the employment laws and regulations in Bolivia below, to avoid any compliance issues.

Employment Contract Requirements

In Bolivia, employment contracts can be verbal or written. The typical expectation is for contracts to be indefinite and signed, although fixed-term contracts are allowed if documented. Verbal contracts are assumed to be indefinite, and written contracts need authorisation from a labour inspector or higher administrative authority.

Onboarding Process

We can help you get a new employee started in Bolivia quickly, with a minimum onboarding time of just 1-2 working days. The timeline starts once the employee submits all required information onto the Playroll platform and completes any necessary local authority registrations. For non-nationals, the Right to Work assessment (if applicable) may add up to three extra days. Additional time may be needed for follow-ups on this assessment. Please note, payroll cut-off dates can impact the actual start date. Playroll's payroll cut-off date is the 10th of each month unless otherwise specified.

Working Hours in Bolivia

In Bolivia, the standard working hours are 8 hours per day, with a maximum of 6 working days in a week.

Overtime in Bolivia

Any work performed beyond the standard working hours per week in Bolivia is subject to overtime pay, as stipulated by employment contracts or collective agreements. Typically, the maximum limit for overtime hours is 2 hours per day, and the compensation is set at 200% of the regular salary rate.

Probation Period in Bolivia

The probation periods for permanent employees in Bolivia typically range from 1 to 3 months.

Hiring in Bolivia means navigating local labor laws, mandatory employee benefits, payroll taxes, and strict employment regulations. These requirements aren’t always intuitive, especially if your team lacks in-country legal or HR expertise. An Employer of Record steps in as the legal employer for your hires, managing all compliance-related responsibilities. This includes issuing locally compliant contracts, registering employees with relevant authorities, processing payroll, and handling social security contributions and taxes in line with national laws.

By handing over these complexities to an EOR, your business avoids costly compliance errors and the time required to master local employment standards. You can focus on growing your team and operations while trusting that the legal and administrative foundation is solid. Whether you're making one strategic hire or building out an entire team, the EOR keeps you compliant, removes guesswork, and reduces the risk of legal or financial penalties, without requiring you to open a legal entity or maintain a local HR team.

Fiscal Year in Bolivia

1 January - 31 December is the 12-month accounting period that businesses in Bolivia use for financial and tax reporting purposes.

Payroll Cycle in Bolivia

The payroll cycle in Bolivia is usually monthly, with employees being paid on the last working day of the month.

Minimum Wage in Bolivia

As of May 1, 2025, Bolivia's minimum wage is set at BOB 2,750 per month. This rate applies to all workers, and the government periodically reviews and adjusts it based on inflation and economic conditions.

Bonus Payments in Bolivia

Bolivian employees receive a 13th-month salary (Aguinaldo) equivalent to one month's pay, capped at 25.00% of the company's profits. It is disbursed at year-end and is tax and social security exempt. A 14th-month bonus (Prima) is mandatory if the GDP exceeds 4.50% and the company earns annual profits.

Employer Tax Contributions

Employer payroll contributions are generally estimated at an additional 16.71% on top of the employee salary in Bolivia.

Employee Payroll Tax Contributions

In Bolivia, the typical estimation for employee payroll contributions cost is around 12.71%.

Individual Income Tax Contributions

The individual income tax in Bolivia is a flat rate of 13%.

Pension in Bolivia

Irrespective of personal savings, all resident citizens of Bolivia aged 60 and older are covered by the Renta Dignidad, or Dignity Pension Programme (RDP), receiving monthly payments of 350 BOB, or 300 BOB for those receiving another pension.

Running payroll in Bolivia is complex, especially when you're hiring without a local entity. Local laws determine everything from tax withholdings and reporting deadlines to benefit contributions and currency requirements. Missteps can lead to fines, payment delays, or unhappy employees. An Employer of Record takes this burden off your plate by handling the full payroll process. Acting as the legal employer, the EOR ensures you remain compliant with all payroll-related obligations, while still allowing you to manage your team’s day-to-day work and performance.

Key Ways an EOR Supports Payroll in Bolivia:

• Compliance Assurance: Ensures payroll aligns with local tax laws, labor regulations, and statutory deadlines.
• Payroll Processing & Tax Management: Calculates salaries, applies correct tax withholdings, and submits required reports.
• Benefits & Social Security Contributions: Manages employer obligations for pensions, health insurance, and other legal entitlements.
• Contract Generation & HR Administration: Drafts compliant employment contracts and supports onboarding, terminations, and HR tasks.
• Currency Payments: Issues timely salary payments in local currency, ensuring employees are paid accurately and on time.

In Bolivia, work permits and visas are essential for employers hiring foreign workers. The process requires selecting the appropriate visa type based on employment duration, such as the Transitory Residence or Work Visa for short-term assignments (valid for 30 to 180 days), Temporary Residence Visa for longer employment periods (valid for one to three years), or Permanent Residence Visa for indefinite stays after meeting specific criteria, typically after legally residing in Bolivia for two consecutive years.

Applications involve submitting documents like valid passports with at least six months of validity, proof of employment (such as an invitation from the company and employment contract), police clearance certificates from INTERPOL and their last country of residence, a medical certificate, and passport photographs to ensure compliance with Bolivian immigration laws.

The cost of the permanent residence visa is approximately 3920 Bs. (US$ 560), and it should be noted that this visa expires if the holder leaves the country for more than two years.

Mandatory Leave Entitlement in Bolivia

The annual leave entitlement in Bolivia is based on years of service: 15 working days for employees with 1-5 years of service, 20 working days after 5 years, and 30 working days after 10 years of employment. These are provided in addition to public holidays.

Public Holidays In Bolivia

Bolivia observes 11 national public holidays, in addition to state-specific public holidays that may vary:

Paid Time Off in Bolivia

In Bolivia, annual paid leave is typically stipulated in the employment contract, starting at a minimum of 15 days after one year of service, increasing to 20 days after 5 years, and 30 days after 10 years of employment, in addition to public holidays.

Maternity Leave In Bolivia

Pregnant employees in Bolivia receive 90 days of paid maternity leave, with 45 days taken before the due date and the remaining 45 days after. Initially, the employer pays 100% of the salary, later reimbursed at 90% by Social Security.

Paternity Leave In Bolivia

Fathers in Bolivia have the right to mandatory paid paternity leave, with a duration of 3 days.

Parental Leave In Bolivia

There is no separate, additional parental leave policy beyond maternity and paternity provisions in Bolivia.

Sick Leave In Bolivia

In Bolivia, employees receive 26 weeks of paid sick leave annually and must submit a medical certificate within 48 hours of the initial illness. The employer covers the leave at 100% of the regular pay rate, with Social Security reimbursing 75% of the rate starting from the 5th day of sickness.

Administering employee benefits in Bolivia requires more than just offering a standard package. Local labor laws often mandate specific entitlements, from health insurance to paid leave, and the rules can change without warning. Bolivia also has unique standards for what an attractive, competitive benefits package looks like. For businesses without in-country expertise, meeting these obligations and expectations can quickly become risky and expensive. An Employer of Record acts as your compliance partner, ensuring all benefits are provided according to the latest legal requirements and without administrative strain on your internal team.

Beyond compliance, an EOR brings clarity and consistency to a process that’s often complex and fragmented. They handle enrollments, ensure accurate employer contributions, manage communications with local providers, and keep everything properly documented. This means employees get what they’re entitled to, and you avoid the headache of navigating benefits systems in a foreign market. Whether you're hiring one person or building a larger team, an EOR provides a clear, dependable structure that lets you offer competitive benefits without taking on unnecessary risk or workload.

Termination Process in Bolivia

Acceptable terminations in Bolivia include:

1. Voluntary employee resignation
2. Terminations with cause (intentionally-caused damage of work instruments, disclosure of company privacy, total or partial breach of agreement, employee theft or robbery)
3. Contract expiration

Notice Period in Bolivia

According to Bolivian labour law, there is typically a 7 day notice period if the employee has worked less than a month, 15 days if the employee worked less than 6 months, and 1 month notice period if the employee worked longer than 1 year.

Severance in Bolivia

In Bolivia, severance pay is obligatory and varies based on the type of termination. It generally amounts to one month's regular salary for each completed year of service.