Hire in Chile

Chile

PEO &

Employer of Record

Hire employees remotely in Chile without a local entity. We handle HR compliance, payroll & taxes so you can focus on your business.

Chile EOR PEO

Business Language

Spanish

Salary Currency

Chilean peso (CLP)

Capital city

Santiago

Time zone

UTC -3

EOR in Chile

Chile EOR PEO

from $375/ month

Hire Employees in Chile

NNRoad provides payroll & employer of record (EOR) services in Chile to ensure that your business complies with local labor laws and regulations. We process monthly payroll and act as the Employer of Record, taking on all local employer liabilities.

Fast Hiring

Start working with your remote employees in a week.

Foreigner Visas

NNRoad assists with overseas foreign hires visa needs.

Platform

Access your payroll reports on our portal.

Employer of Record (EOR) in Chile

Employer of Record (EOR) services are for companies who do not have a legal entity in Chile, but who want to hire localy. Employment and full liability are outsourced to NNRoad.

1. Candidate Selection

Select the candidates you want to hire in Chile.

2. Employee Onboarding

We sign a local labor contract with your employees based in Chile.

3. Compliance & Payroll

We manage monthly payroll, mandatory benefits & all HR compliance in Chile.

EOR service includes:

Hiring and termination of employees/local labor contracts (contract administration – engagement, extension termination and conversion to permanent hire).

All mandatory employer (and employee) contributions filed and paid for your EOR employees.

Payroll recording, reporting and administration.

Distribution of salaries to employees through direct deposit into their bank accounts.

Calculation, reporting, filing and processing of EOR employee’s individual income tax due.

Collecting and processing your employee’s invoices for business related expenses.

Guiding and organizing your expat employee’s work visa application too guarantee their successful onboarding.

Standalone Payroll in Chile

Payroll services are for companies who have a legal entity in Chile, and want to outsource their salary disbursement, mandatory benefits, income tax filing and mandatory reports.

Employer of Record Status in Chile

Using an Employer of Record (EOR) to hire employees in Chile is a legally recognized and effective way for companies to comply with local employment laws without establishing a local entity. An EOR acts as the legal employer, handling payroll, taxes, benefits, and ensuring adherence to Chilean labor regulations, including the requirements for employment contracts, working hours, and social security contributions.

Hiring an Expat with an EOR in Chile

For hiring foreign expats, an EOR in Chile also manages the necessary work visas and permits, ensuring compliance with immigration laws. Foreign employees typically need an appropriate work visa and must comply with local employment and immigration regulations. The EOR handles these administrative tasks, allowing companies to legally and efficiently onboard international talent.

Employee Income Taxes:

Individual income tax rates in Chile are based on progressive tax brackets.

In Chile, income tax for employees operates under a system where the employer withholds and declares the income tax on behalf of their employees, known as “retención de impuesto” (withholding tax). This administrative income tax mechanism simplifies the process for employees, as they do not need to file their income tax returns for salary earnings themselves unless they have additional income sources.

Tax Brackets:

Sample Calculation

In USD*
0.00%: $0 – $11,368.06
4.00%: $11,368.06 – $25,262
8.00%: $25,263 – $42,103.94
13.50%: $42,103.94 – $58,945.52
23.00%: $58,945.52 – $75,787.10
30.40%: $75,787.10 to $101,049.46
35.50%: >$101,049.46
Tax on a $100,000 annual income in Chile:

0 * 0.00 = 0
($11,368.06 – $0) * 0.00 = 0
($25,262 – $11,368.06) * 0.04 = $540.58
($42,103.94 – $25,263) * 0.08 = $1,348.32
($58,945.52 – $42,103.94) * 0.135 = $2,274.38
($75,787.10 – $58,945.52) * 0.23 = $3,872.97
($100,000 – $75,787.10) * 0.304 = $7,595.184

0 + 0 + $540.58 + $1,348.32 + $2,274.38 + $3,872.97 + $7,595.184 = $15,631.402

Therefore, the income tax due on a salary of $100,000 in Chile is approximately $15,631.40.

Employer Contribution

Employers in Chile are required to contribute to social security, including pensions, health insurance, and unemployment insurance. The contributions are a percentage of the employee’s salary, as follows:

Pension Fund: approximately 12.3%,
Health Insurance: 7%,
Unemployment Insurance: 2.4% for indefinite contracts and 3.0% for fixed-term contracts.

Employee Contribution

Employers in Chile are required to contribute to social security, including pensions, health insurance, and unemployment insurance. The contributions are a percentage of the employee’s salary, as follows:

Pension Fund: approximately 12.3%,
Health Insurance: 7%,
Unemployment Insurance: 2.4% for indefinite contracts and 3.0% for fixed-term contracts.

Social Security

The social security system in Chile covers pensions, healthcare, and unemployment insurance, with both employer and employee contributions funding these benefits.

Pension Fund

The contribution to the Pension Fund is 10% of the salary by the employee, with an additional 12.3% contributed by the employer.

Healthcare Insurance

Both employees and employers contribute 7% of the employee’s salary to healthcare insurance.

Working Hours Per Week

The standard working hours in Chile are 45 hours per week, typically distributed over five days, Monday to Friday.

Overtime

In Chile, employees receive an overtime pay rate that is 50% higher than their standard hourly wage for any hours worked beyond their regular schedule. However, overtime is limited to no more than 10 hours per week or 2 hours per day.

In Chile, employment contracts commonly include a clause outlining the termination process. When terminating employment, employees are to receive a letter detailing the reasons and pertinent facts of their termination, accompanied by proof of social security contributions. This letter must be delivered within three days following the termination.

Severance payments are required upon an employee’s termination, amounting to one month’s salary for each year of service. For example, an employee with five years of service would receive five months’ worth of compensation upon termination. However, the severance payment is capped at 90 UF (approximately US$3,571) per month, although this cap can be lifted by mutual agreement.

Certain employees, such as pregnant women, have additional protections. They cannot be terminated without approval from the labor board, and this protection extends throughout the pregnancy and for one year and six weeks postpartum. Their entitlement to severance pay remains consistent with that of other employees.

Severance

Standard Severance Payment: one month’s salary for each year of service, up to a maximum of 11 years.

Notice Period

Notice Period: 30 days for employers; employees are typically required to give 30 days’ notice as well.

Labor contracts in Chile must specify terms including job description, salary, working hours, and workplace, among others. The maximum legal probation period is up to three months for most employees.

Employment Contract

The agreement must encompass all critical elements of the job arrangement, including pay, holiday entitlement, work schedule, responsibilities, etc. Additionally, it should be composed in Spanish, the official language, and specify financial details in the Chilean peso.

Probation Period

The maximum legal probation period duration in Chile is typically three months.

Annual Leave

Employees with over a year of service are eligible for 15 days of annual leave, though in practice, this can extend up to 21 days. Those employed in Chile’s southern regions, specifically Region IX and X, receive 20 days of annual leave. Additionally, employees have the option to accrue their annual leave for a maximum of two years.

Sick Leave

Employees are required to provide a medical certificate within two days after beginning their sick leave. The initial three days of such leave are unpaid, but following this period, they become eligible for paid sick leave. Paid sick leave is typically 10 days per year, with additional unpaid sick leave available if necessary.

Maternity Leave

Maternity leave in Chile is typically 18 weeks(126 days), with 6 weeks pre-birth and 12 weeks post-birth, paid at 100% of the salary.

Paternity Leave

Paternity leave in Chile is typically 5 days.

Resources

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