Employer of Record in Chile

Guide to Hiring Employees in Chile

Your guide to hiring employees in Chile, covering the employment landscape, working customs, and local labor laws.

Capital City

Santiago

Currency

Chilean Peso

 (

$

)

Timezone

GMT -3

Payroll Frequency

monthly

Tax Year

1 January- 31 December

Employer Tax

4.24%

Languages

Spanish

Leave The hiring to a local expert

Hire in Chile with ease—our experts handle employment and compliance for you.

Enquire Now

How to Hire In Chile

Hiring in Chile for the first time can be overwhelming, especially when navigating unfamiliar employment laws. Whether you hire independent contractors, set up a legal entity, or use an EOR service, understanding the local employment landscape is crucial for success. Playroll’s comprehensive guide can help you get started if you're hiring locally or relocating a team member.

Companies can hire employees in Chile in the following three ways:

  • Setting up a local entity. Entity establishment reduces risk exposure and enables direct hiring, but can be costly and time-consuming – making it less practical for companies seeking quick and flexible solutions for hiring in Chile.
  • Partnering with an Employer Of Record. An EOR, like Playroll, is a third-party entity that serves as the legal employer of your international workforce which hires, pays, and manages compliance with Chile’s labor laws and tax regulations.
  • Hiring independent contractors. Hiring contractors gives companies a flexible, affordable alternative to hiring local employees, though it involves unique misclassification risks.

Good To Know

Chile's legal framework for employment, including distinct categories of labor agreements and mandatory written employment contracts, ensures clarity and compliance in the hiring process.

With a workforce of around 8.8 million people, Chile provides access to a considerable talent pool for international employers.

Despite its relatively small size, Chile boasts the fourth largest GDP in South America, indicating economic stability and growth opportunities.

Chileans are known for being friendly and hospitable, making it easier for foreign employers to integrate into the local business culture.

How to Employ In Chile

Businesses can only operate smoothly in Chile 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 Chile below, to avoid any compliance issues.

Employment Contract Requirements

When it comes to employment in Chile, there are three main types of agreements: individual contracts, collective contracts, and special contracts (like apprenticeships). Collective contracts set general employment terms, but the actual job relationship begins with an individual contract, which can be either permanent or temporary. As per Chilean Labor Code Article 10, the agreement needs to cover basics like:

  • Identification of both parties
  • Contract date and place
  • Job details
  • Pay terms

Onboarding Process

We can help you get a new employee started in Chile 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 Chile

The standard maximum working hours per week are 44, reduced from 45 hours. The allocation of the reduction must be agreed upon by the parties.

Overtime in Chile

Employees can work up to two extra hours a day or ten extra hours a week. For this overtime, they get paid 50% more than their regular salary for that day. Parties may agree on up to 5 additional days off, instead of receiving a premium for overtime hours worked.

Probation Period in Chile

The labor laws don't set rules for how long an employee's probation period should be. An employee with a fixed contract may be considered as being on probation for the duration of the contract, to a maximum of 12 months.

A collage of people in various careers

Payroll Management in Chile

Fiscal Year in Chile

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

Payroll Cycle in Chile

The payroll cycle in Chile is usually monthly, with employees being paid by the last day of the month.

Minimum Wage in Chile

The minimum wage for employees in Chile is typically 2,622.38 CLP per hour, amounting to ~500,000 CLP per month for a typical 44 hour work week.

Bonus Payments in Chile

Chilean labor law doesn't have specific provisions for 13th salaries.

Overview of Employment Taxes in Chile

Employer Tax Contributions

Employer payroll contributions are generally estimated at an additional 4.24% on top of the employee salary in Chile.

Tax TypeTax Rate
Unemployment2.40%
Disability and Survival Insurance (SIS)1.84%

Employee Payroll Tax Contributions

In Chile , the typical estimation for employee payroll contributions cost is around 17.6%.

Tax TypeTax Rate
Pension10.00%
Health Plan7.00%
Unemployment Insurance0.60%

Individual Income Tax Contributions

Individual income tax in Chile is calculated based on progressive rates ranging from 0% to 40%. The tax is applied to monthly income, and 1 Monthly Tax Unit is equivalent to approximately 65 901 CLP as of August 2024, but changes monthly.

Income BracketTax Rate
0 - 13.5 Monthly Tax Units0.00%
13.5 Monthly Tax Units - 30 Monthly Tax Units4.00%
30 Monthly Tax Units - 50 Monthly Tax Units8.00%
50 Monthly Tax Units - 70 Monthly Tax Units13.50%
70 Monthly Tax Units - 90 Monthly Tax Units23.00%
90 Monthly Tax Units - 120 Monthly Tax Units30.40%
120 Monthly Tax Units - 310 Monthly Tax Units35.00%
310 + Monthly Tax Units And above40.00%

Pension in Chile

Employees are required to contribute approximately 10% to their pension. Getting the old-age pension is a choice. To qualify, employees need to be 65 (for men) or 60 (for women) and be part of AFP (Administradoras de Fondos de Pensiones).

Info Icon

The tax-related information provided in this guide is intended for general guidance and informational purposes only. Reach out to our dedicated team for insights on remote hiring in Chile tailored to your needs.

CTA Image showing employees in various countries across the globe
Employee Cost Calculator

Get an instant breakdown of the true costs of hiring in Chile.

Calculate Now Default Icon Hover Icon

Leave Entitlements And Company Policies In Chile

Mandatory Leave Entitlement in Chile

The annual leave entitlement in Chile is 15 days for a full time worker. These can include public holidays on top of that or within those days, which would otherwise be unpaid.

Public Holidays In Chile

Public holidays that fall on the weekend are usually forfeited.

HolidayDate
New Years Day1 January
Good FridayApril, day changes yearly
Holy SaturdayApril, day changes yearly
Labor Day1 May
Naval Glories Day21 May
National Day of the Indigenous Peoples in Chile21 June
The Feast of Saints Peter and Paul27 June
The Feast of Our Lady of Mount Carmel16 July
Assumption of Mary15 August
Independence Day18 September
The Day of the Glories of the Army19 September
Day of the Races12 October
National Day of the Evangelical and Protestant Churches31 October
All Saints Day1 1 November
The Feast of the Immaculate Conception8 December
Christmas Day25 December

Paid Time Off in Chile

Employees with at least 1 year of service get 15 days of paid leave. After 10 years of employment for one or more employers, an employee will earn an additional day off for every 3 years of service with the current employer.

Maternity Leave In Chile

Female employees are entitled to a total of 18 weeks of maternity leave - Six weeks before the child is born, and 12 weeks after the birth. Women are entitled to an additional 12 weeks of leave after the compulsory maternity leave is completed. The social security system covers the wages of the employee, up to a prescribed legal cap.

Paternity Leave In Chile

Fathers are eligible for 5 days of paid paternity leave.

Sick Leave In Chile

If employees get sick, Social Security pays for sick leave starting from the 4th day off. If the illness lasts more than 10 days, they get benefits from the first day. A doctor's note must be provided within 2 days of starting sick leave.

Parental Leave In Chile

Women employees can take 10 days of leave for a child under 18. Although they are entitled to payment during this period, they need to compensate for the time off at a later date.

Bereavement Leave

Employee is entitled to 10 days of Bereavement leave for the death of a child and 7 days for the death of a spouse/civil partner.

Marriage Leave

Employee is entitled to 5 days of paid leave in the case of marriage.

Employment Termination and Severance Policies in Chile

Termination Process in Chile

To terminate an employee in Chile, a valid reason must be determined. According to the law, acceptable reasons for termination include:

  • Mutual agreement
  • Resignation
  • Breach of contract
  • Company needs or reorganization

Notice Period in Chile

According to the law, the notice period for termination is one month. However, it's common for the notice period to be skipped, and instead, payment is made in place of the notice.

Severance in Chile

If an employee has worked for at least one year, they are entitled to severance pay. For each year up to 11 years, they get one month's salary. After the first year, they earn an extra month of severance pay if they have worked for at least half of the following year

Back to Top

Copied to Clipboard

Woman with glasses
Woman with glasses

Take your business to new places

Employer of Record for Chile

  • hire icon Hire employees without entity setup.
  • handshake icon Full compliance, we assume 100% liability.
  • gift icon Handle local payroll and benefits seamlessly.
  • headphones icon 24/5 responsive real-human support.
  • money icon Transparent pricing, no hidden fees.

FAQS

FAQs About Hiring In Chile

What are the standard employment terms in Chile?

Standard employment terms in Chile include working hours, leave entitlements, and conditions outlined in employment contracts, governed by labor laws and regulations.

What is the standard income tax rate for employees in Chile?

Chile has progressive income tax rates, with rates varying based on income levels. Social security contributions fund various benefits for employees.

What are the statutory leave entitlements in Chile?

Statutory leave entitlements in Chile include annual leave, public holidays, and sick leave, with specific provisions outlined in labor laws.

Playroll makes growing your team in Chile effortless. Ready to start?

The HR Platform built to scale your global team.

Employer of Record in [State]

Guide to Hiring Employees in [State]

Your guide to hiring employees in [State], covering the employment landscape, working customs, and local labor laws.

Capital City

Lorem ipsum dolor sit amet, consectetur adipiscing elit. Suspendisse varius enim in eros elementum tristique. Duis cursus, mi quis viverra ornare, eros dolor interdum nulla, ut commodo diam libero vitae erat. Aenean faucibus nibh et justo cursus id rutrum lorem imperdiet. Nunc ut sem vitae risus tristique posuere.

Employer Tax

Lorem ipsum dolor sit amet, consectetur adipiscing elit. Suspendisse varius enim in eros elementum tristique. Duis cursus, mi quis viverra ornare, eros dolor interdum nulla, ut commodo diam libero vitae erat. Aenean faucibus nibh et justo cursus id rutrum lorem imperdiet. Nunc ut sem vitae risus tristique posuere.

Leave The hiring to a local expert

Hire in Chile with ease—our experts handle employment and compliance for you.

Enquire Now

How to Hire In Chile

Hiring in Chile for the first time can be overwhelming, especially when navigating unfamiliar employment laws. Whether you hire independent contractors, set up a legal entity, or use an EOR service, understanding the local employment landscape is crucial for success. Playroll’s comprehensive guide can help you get started if you're hiring locally or relocating a team member.

Companies can hire employees in Chile in the following three ways:

  • Setting up a local entity. Entity establishment reduces risk exposure and enables direct hiring, but can be costly and time-consuming – making it less practical for companies seeking quick and flexible solutions for hiring in Chile.
  • Partnering with an Employer Of Record. An EOR, like Playroll, is a third-party entity that serves as the legal employer of your international workforce which hires, pays, and manages compliance with Chile’s labor laws and tax regulations.
  • Hiring independent contractors. Hiring contractors gives companies a flexible, affordable alternative to hiring local employees, though it involves unique misclassification risks.

Good To Know

Chile's legal framework for employment, including distinct categories of labor agreements and mandatory written employment contracts, ensures clarity and compliance in the hiring process.

With a workforce of around 8.8 million people, Chile provides access to a considerable talent pool for international employers.

Despite its relatively small size, Chile boasts the fourth largest GDP in South America, indicating economic stability and growth opportunities.

Chileans are known for being friendly and hospitable, making it easier for foreign employers to integrate into the local business culture.

How to Employ In Chile

Businesses can only operate smoothly in Chile 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 Chile below, to avoid any compliance issues.

Employment Contract Requirements

When it comes to employment in Chile, there are three main types of agreements: individual contracts, collective contracts, and special contracts (like apprenticeships). Collective contracts set general employment terms, but the actual job relationship begins with an individual contract, which can be either permanent or temporary. As per Chilean Labor Code Article 10, the agreement needs to cover basics like:

  • Identification of both parties
  • Contract date and place
  • Job details
  • Pay terms

Onboarding Process

We can help you get a new employee started in Chile 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 Chile

The standard maximum working hours per week are 44, reduced from 45 hours. The allocation of the reduction must be agreed upon by the parties.

Overtime in Chile

Employees can work up to two extra hours a day or ten extra hours a week. For this overtime, they get paid 50% more than their regular salary for that day. Parties may agree on up to 5 additional days off, instead of receiving a premium for overtime hours worked.

Probation Period in Chile

The labor laws don't set rules for how long an employee's probation period should be. An employee with a fixed contract may be considered as being on probation for the duration of the contract, to a maximum of 12 months.

A collage of people in various careers

Payroll Management in Chile

Fiscal Year in Chile

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

Payroll Cycle in Chile

The payroll cycle in Chile is usually monthly, with employees being paid by the last day of the month.

Minimum Wage in Chile

The minimum wage for employees in Chile is typically 2,622.38 CLP per hour, amounting to ~500,000 CLP per month for a typical 44 hour work week.

Bonus Payments in Chile

Chilean labor law doesn't have specific provisions for 13th salaries.

Overview of Employment Taxes in Chile

Employer Tax Contributions

Employer payroll contributions are generally estimated at an additional 4.24% on top of the employee salary in Chile.

Tax TypeTax Rate
Unemployment2.40%
Disability and Survival Insurance (SIS)1.84%

Employee Payroll Tax Contributions

In Chile , the typical estimation for employee payroll contributions cost is around 17.6%.

Tax TypeTax Rate
Pension10.00%
Health Plan7.00%
Unemployment Insurance0.60%

Individual Income Tax Contributions

Individual income tax in Chile is calculated based on progressive rates ranging from 0% to 40%. The tax is applied to monthly income, and 1 Monthly Tax Unit is equivalent to approximately 65 901 CLP as of August 2024, but changes monthly.

Income BracketTax Rate
0 - 13.5 Monthly Tax Units0.00%
13.5 Monthly Tax Units - 30 Monthly Tax Units4.00%
30 Monthly Tax Units - 50 Monthly Tax Units8.00%
50 Monthly Tax Units - 70 Monthly Tax Units13.50%
70 Monthly Tax Units - 90 Monthly Tax Units23.00%
90 Monthly Tax Units - 120 Monthly Tax Units30.40%
120 Monthly Tax Units - 310 Monthly Tax Units35.00%
310 + Monthly Tax Units And above40.00%

Pension in Chile

Employees are required to contribute approximately 10% to their pension. Getting the old-age pension is a choice. To qualify, employees need to be 65 (for men) or 60 (for women) and be part of AFP (Administradoras de Fondos de Pensiones).

Info Icon

The tax-related information provided in this guide is intended for general guidance and informational purposes only. Reach out to our dedicated team for insights on remote hiring in Chile tailored to your needs.

CTA Image showing employees in various countries across the globe
Employee Cost Calculator

Get an instant breakdown of the true costs of hiring in Chile.

Calculate Now Default Icon Hover Icon

Leave Entitlements And Company Policies In Chile

Mandatory Leave Entitlement in Chile

The annual leave entitlement in Chile is 15 days for a full time worker. These can include public holidays on top of that or within those days, which would otherwise be unpaid.

Public Holidays In Chile

Public holidays that fall on the weekend are usually forfeited.

HolidayDate
New Years Day1 January
Good FridayApril, day changes yearly
Holy SaturdayApril, day changes yearly
Labor Day1 May
Naval Glories Day21 May
National Day of the Indigenous Peoples in Chile21 June
The Feast of Saints Peter and Paul27 June
The Feast of Our Lady of Mount Carmel16 July
Assumption of Mary15 August
Independence Day18 September
The Day of the Glories of the Army19 September
Day of the Races12 October
National Day of the Evangelical and Protestant Churches31 October
All Saints Day1 1 November
The Feast of the Immaculate Conception8 December
Christmas Day25 December

Paid Time Off in Chile

Employees with at least 1 year of service get 15 days of paid leave. After 10 years of employment for one or more employers, an employee will earn an additional day off for every 3 years of service with the current employer.

Maternity Leave In Chile

Female employees are entitled to a total of 18 weeks of maternity leave - Six weeks before the child is born, and 12 weeks after the birth. Women are entitled to an additional 12 weeks of leave after the compulsory maternity leave is completed. The social security system covers the wages of the employee, up to a prescribed legal cap.

Paternity Leave In Chile

Fathers are eligible for 5 days of paid paternity leave.

Sick Leave In Chile

If employees get sick, Social Security pays for sick leave starting from the 4th day off. If the illness lasts more than 10 days, they get benefits from the first day. A doctor's note must be provided within 2 days of starting sick leave.

Parental Leave In Chile

Women employees can take 10 days of leave for a child under 18. Although they are entitled to payment during this period, they need to compensate for the time off at a later date.

Bereavement Leave

Employee is entitled to 10 days of Bereavement leave for the death of a child and 7 days for the death of a spouse/civil partner.

Marriage Leave

Employee is entitled to 5 days of paid leave in the case of marriage.

Employment Termination and Severance Policies in Chile

Termination Process in Chile

To terminate an employee in Chile, a valid reason must be determined. According to the law, acceptable reasons for termination include:

  • Mutual agreement
  • Resignation
  • Breach of contract
  • Company needs or reorganization

Notice Period in Chile

According to the law, the notice period for termination is one month. However, it's common for the notice period to be skipped, and instead, payment is made in place of the notice.

Severance in Chile

If an employee has worked for at least one year, they are entitled to severance pay. For each year up to 11 years, they get one month's salary. After the first year, they earn an extra month of severance pay if they have worked for at least half of the following year

Back to Top

Copied to Clipboard

Woman with glasses
Woman with glasses

Take your business to new places

Employer of Record for Chile

  • hire icon Hire employees without entity setup.
  • handshake icon Full compliance, we assume 100% liability.
  • gift icon Handle local payroll and benefits seamlessly.
  • headphones icon 24/5 responsive real-human support.
  • money icon Transparent pricing, no hidden fees.

FAQS

FAQs About Hiring In Chile

What are the standard employment terms in Chile?

Standard employment terms in Chile include working hours, leave entitlements, and conditions outlined in employment contracts, governed by labor laws and regulations.

What is the standard income tax rate for employees in Chile?

Chile has progressive income tax rates, with rates varying based on income levels. Social security contributions fund various benefits for employees.

What are the statutory leave entitlements in Chile?

Statutory leave entitlements in Chile include annual leave, public holidays, and sick leave, with specific provisions outlined in labor laws.

Playroll makes growing your team in Chile effortless. Ready to start?

The HR Platform built to scale your global team.