Country Guides

Chile

Quick Find

pin_drop

Capital

Santiago

emoji_language

Language

Spanish

captive_portal

Remote workers

2M

payments

Currency

Chilean Peso (CLP)

alarm

Working hours

45 hours per week

beach_access

Public holidays

16 days per year

payment_arrow_down

Minimum monthly salary

CLP 539,000

receipt

Tax year

Jan 1 - Dec 31

early_on

Date format

DD/MM/YYYY

Misclassification penalties

Fines up to 500 UTM (USD 36,313/CLP 26,421,000) for not complying with the Labour Code, plus up to 30 UTM (USD 2,178/CLP 1,585,260) per misclassified employee and the transfer of the employee to the real employer as a permanent employee

Fun fact

In 2020, a large majority (78%) of the population voted in favour of a new constitution (post-Pinochet dictatorship), which is being drafted at the moment

Employer contributions

  • payment_arrow_down

    Employer tax: 5.18 - 9.18%
  • language

    Social security: 2.71%
  • article

    Unemployment insurance: 2.4% - 3%
  • cardiology

    Professional illness insurance: varies by industry, max 3.4%

Employee contributions

  • payment_arrow_down

    Employee tax: 17.6%-58.2%
  • language

    Social insurance: 17.6%
  • article

    Unemployment insurance: 0% - 0.6%

Income tax

Gross income: Up to CLP 943,501.50

Tax rate: 0%

Gross income: CLP 943,501.50 - CLP 2,096,670.00

Tax rate: 4%

Gross income: CLP 2,096,670.01 - CLP 3,494,450.00

Tax rate: 8%

Gross income: CLP 3,494,450.01 - CLP 4,892,230.00

Tax rate: 13.5%

Gross income: CLP 4,892,230.01 - CLP 6,290,010.00

Tax rate: 23%

Gross income: CLP 6,290,010.01- CLP 8,386,680.00

Tax rate: 30.4%

Gross income: CLP 8,386,680.01- CLP 21,665,590.00

Tax rate: 37%

Gross income: More than CLP 21,665,590.01

Tax rate: 40%

Looking for a quick cost estimate?

Use our calculator to understand what are all the employment costs you have to consider in Chile.

Calculate employment cost in Chile arrow_forward_ios

Employer of Record in Chile

What is an EOR?

An Employer of Record is the legal employer of a worker in Chile As such, the Employer of Record takes care of all Chile compliance aspects of employment, including payroll, taxes, statutory benefits, employment contracts and more.

EOR responsibilities

  • check_circle

    Ensuring their employment is compliant with local employment laws
  • check_circle

    Processing local payroll
  • check_circle

    Filing employment related taxes and returns
  • check_circle

    Issuing payslips to the employee
  • check_circle

    Distributing salary payments

How it works

  • Company

    Maintains a direct relationship with the employee, allocates them work tasks, and manages their performance.

  • Boundless

    Takes care of payroll, taxes, benefits, ensuring the employee and the company are compliant with all legal regulations.

  • Employee

    The third party to the agreement, the employee, fulfils all of their obligations as a worker for the company.

Statutory benefits in Chile

  • Legal gratification

    In Chile, it is mandatory that companies with profits provide all employees with a statutory bonus annually in addition to the employee’s base salary.

  • Workers compensation insurance

    Every company must contribute to the insurance to fund the risk of the employment activity. The amount of contribution borne by the company varies according to the level of risk of the activity, with a maximum rate of 3.4% of the employee’s salary.

Common non-mandatory benefits in Chile

  • loyalty

    First year annual leave
  • language

    Flexible work
  • emoji_objects

    Education and training
  • cardiology

    Private health insurance
  • currency_exchange

    Stock options
  • payments

    Yearly pay rise
  • payments

    Aguinaldos
  • family_restroom

    Childcare allowance
  • payments

    Meal vouchers
article

Employment agreement

payments

Payslip

breastfeeding

Rights during pregnancy

person_heart

Equal pay

shield_with_heart

Protection from discrimination

captive_portal

Right to disconnect

language

Union membership

shield_with_heart

Protection of benefits that have been extended

article

Worker compensation insurance

article

Legal gratification

Paid time off

After one year of employment 15-20 days + 16 public holidays

Sick leave

Unlimited

Maternity leave

18 weeks

Paternity leave

5 days

Parental leave

12 weeks paid

Probation

The probationary period is not recognized in Chile. Instead, it is common for companies to hire employees on a fixed-term contract for a maximum of 12 months and use that time as the probationary period before turning that contract into a permanent one.

Non-compete

The Chilean courts recognize non-competition and non-solicitation clauses if they meet the criteria, although they are not a statutory right.

Payment frequency

Salaries must be paid once a month.

Payday

Salaries must be paid on or before the last working day of every month.

Chile only recognizes at-will termination for directors, managers, assistant managers and those in positions of “exclusive confidence”. This means that employment can be terminated without a cause or justification. In all other circumstances, there must be a valid and fair reason for dismissal, and it must respect the notice period.

For terminations to be effective, the company must prepare a letter for the employee regarding the reason for the employment termination and the effective date.

Upon notification of termination, companies must also prepare a severance agreement (finiquito) stating the cause for dismissal and the amount of severance owned to the employee. Severance pay often includes the notice period (as terminations are often immediate), accrued but unused time off, and clauses to protect the confidentiality of information and intellectual property.

Employers guilty of wrongful termination may be required to pay compensation in lieu of prior notice, severance, and a surcharge of severance for each year of service varying from 30% to 100% depending on the reason for dismissal plus the costs of the employee’s attorney.

FAQs

Hiring in Chile generally falls into four categories. You can run payroll from your HQ for short-term cases, engage contractors for project-based work, set up a local entity to hire directly, or partner with an Employer of Record. Each path involves different compliance and operational effort. An EOR allows compliant Chilean employment without setting up a local entity.

Contractors work well when the relationship is project-based and the person serves multiple clients. If an individual gives their full and undivided attention to your company in Chile, employment is the right structure under Chilean law, covering entitlements like paid annual leave, sick leave, and social security contributions. For project-based contractor engagements, Boundless’s Agent of Record (AOR) service handles classification, contracts, and payments compliantly in Chile.

HR compliance in Chile means your policies and procedures respect all applicable Chilean employment laws and regulations. When you hire in Chile, this matters both to safeguard employee rights and to reduce employer risk. Compliance covers labour law, sick leave, annual leave (15-20 days), minimum wage (CLP 539,000/month), tax credits, and a 45-hour working week. Following these is fundamental for running the business well.

An Employer of Record is the legal employer of the individual in Chile for government, tax, and employment purposes. It provides a locally compliant contract, runs payroll, files employment taxes, and manages statutory benefits such as 18 weeks of maternity leave and 15-20 days of annual leave. You remain responsible for sourcing workers, managing day-to-day work, and funding payroll each cycle.

Boundless partners with employment lawyers and advisers in each country we operate in, including Chile. They ensure employment contracts and onboarding documents comply with the local jurisdiction. We hold detailed discussions on specific norms such as payroll, social protection, data protection, notice periods, and work-from-home regulations. When a sensitive issue arises, our internal team engages the relevant firm promptly.

Can’t find what you’re after?

Or maybe the country you’re looking into isn’t available yet?

Talk to us

Employment cost calculator

Understand the employment costs you have to consider in any country

Learn more

Global employment made gloriously uneventful

Talk to us and discover Boundless possibilities

Book a personalised discovery and get your questions answered by our experts.