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Country Guide


Hiring Employees in Chile at a glance

Chilean Peso (CLP)
45 hours
15 days
1st Jan - 31st Dec
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
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 tax: 

5.18 - 9.18%

Social security - 2.78%

Unemployment insurance - 2.4% - 3%

Professional illness insurance - varies by industry, max 3.4%

Employee tax: 


Social insurance - 17.6%

Unemployment insurance - 0% - 0.6%

Income tax:
Up to CLP680,022 0%
CLP680,022,01 - CLP1,511,1604%
CLP 1,511,160.01 - CLP 2,518,6008%
CLP 2,518,600.01 - CLP 3,526,04013.5%
CLP 3,526,040.01 - CLP 4,533,48023%
CLP 4,533,480.01 - CLP 6,044,64030.4%
CLP 6,044,640.01 - CLP 15,615,320


More than CLP 15,615,32040%

Salary Calculations

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

Provide us with some extra details and we will send you a full breakdown of the salary costs.

Employer of Record in Chile

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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.

the employer of Record is responsible for:

Ensuring their employment is compliant with local employment laws
Processing local payroll
Filing employment related taxes and returns
Issuing payslips to the employee
Distributing salary payments

How Employer of Record works


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


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


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

Statutory Benefits in Chile

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Legal gratification

n 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

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First year annual leave
Flexible work
Education and training
Private health insurance
Stock options
Yearly pay rise
Childcare allowance
Meal vouchers

Employee Rights and Protections in Chile

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Employment agreement
Rights during pregnancy
Equal pay
Protection from discrimination
Right to disconnect
Union membership
Protection of benefits that have been extended
Worker compensation insurance

Paid time off: After one year of employment 15-20 days + 15 public holidays

Paternity leave: 5 days

Sick leave: Unlimited

Parental leave: 12 weeks paid

Maternity leave: 18 weeks


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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.

Payment Frequency

Salaries in Chile must be paid once a month.

End of Employment

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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.

Frequently Asked Questions

What are my options if I want to hire a worker in Chile?

While there are generally four ways of employing people across borders, not all are legal or sensible. Here is an overview of each way to employ a worker in Chile, outlining the potential cons.

HQ country employment & payroll

While the person is in Chile, they are employed and payrolled directly by the company’s HQ entity.
Cons: This may appear attractive, but it generally isn't legal in the long term. HQ payroll won't be possible if the person is not a tax resident in the HQ country.


Independent contractor agreements

People are locally registered as sole traders or limited liability company owners in Ireland and invoice for their work. There is no direct employment relationship.
Cons: In Chile, this is not a compliant or legal way to engage full-time workers who work solely for your company. There will be challenges in attracting and retaining talent.


Direct local employer setup

The company sets up as a fully-compliant local employer. This often involves setting up a local entity and local tax registration.
Cons: Expensive, time-consuming, high-level of complexity. Unknowns around how obligations and costs will evolve over time. There will be a need to stay on top of changes in regulations.


Partnering with an Employer of Record Chile /full-service Professional Employer Organisation

Employment is handled by a platform that specialises in employing people on behalf of customer companies. The Employer of Record helps to hire and pay employees.
Cons: For some countries, the ongoing costs may be higher than direct employment. Some education is needed to inform employees about how the employment relationship will work.

How long does it take to set up a company in Chile?

Setting up a local company in Chile is relatively straightforward. However, the difficult part comes after the initial setup when the employer needs to run payroll for their Chile employees every month, file taxes, extend and manage employee benefits, and follow changes in rules and regulations to employment law. Here is an overview of everything you will find yourself needing to do.

Can I employ people as independent contractors in Chile?

While many employers practice employing remote workers as independent contractors, it's a bad practice. If an individual is giving their full and undivided attention to your company in Chile, treating them as an independent contractor is a likely breach of Chilean employment laws and of those in your country.
Your company could be liable for fines on owed holiday pay, sick pay, social welfare payments, paternity benefit, maternity benefit, or other legal measures. Since the individuals you are working with do not receive the benefit of local employment laws and protections that are often afforded to people working full-time hours.

What does HR compliance mean in Chile, and why does it matter?

When you hire employees in Chile, you have certain obligations as an employer. HR compliance is about ensuring your policies and procedures respect all applicable laws and regulations regarding employment and work practices. Complying with local employment law in Chile is fundamental for the correct running of your business - not only because these laws are in place to protect employees and guarantee their rights are safeguarded, but to minimise your risk of liabilities as an employer. Being compliant means respecting and following all local labour laws, sick leave and illness benefits, annual leave, minimum wage, tax credits, working hours regulations.

How much does it cost to employ someone in Chile?

As with every other country, there are certain costs associated with employing a worker in Chile that come on top of the gross salary you are offering. A Chile employer must contribute to social insurance, unemployment insurance and professional illness insurance. To view the exact percentages and amounts given the salary you are planning to offer, you can use our handy calculator tool.

What does Employer of Record mean in Chile?

It means that Boundless is the legal employer of the individual, as far as the Chilean government, tax, and employment authorities are concerned. We are responsible for:
  • informing you about any pre-employment requirements
  • ensuring their employment is compliant with Chilean employment law
  • informing you about the length of the maternity leave, paternity leave, public holidays, illness benefits, medical benefits
  • providing a locally compliant employment contract
  • processing local payroll
  • filing employment-related tax returns
  • issuing payslips to the employee
  • distributing salary payments
  • payments to the local tax authorities
Customers that work with an Employer of Record in Chile are responsible for:
  • sourcing and recruiting their own workers
  • managing the employee’s day-to-day work load
  • contributing to the personal / professional development of the employee through their work
  • following any guidance we give on employment and HR best practices or legal obligations in Chile, such as the employment contract, public holidays, annual leave, sick leave, maternity and paternity benefits, probationary periods, overtime pay, statutory redundancy payments, liability insurance and many others
  • ensuring that payroll bills relating to their team are paid to Boundless before the cut-off point in each pay cycle

Who is responsible for filing and paying employees' taxes and social insurance contributions in Chile if employing through an Employer of Record?

Boundless as the Employer of Record Chile files all pertinent taxes, and other contributions to the social system for the Chile employee to be compliant.

How does Boundless as an Employer of Record Chile ensure HR compliance in Chile?

We carefully choose employment lawyers or advisories to partner with in each country we operate in, including Chile. They ensure the Chile employment contracts, and any other relevant documents required for new employees comply with the local jurisdiction. We have thorough discussions on specific norms such as payroll services, social protection, data protection, notice period or work-from-home regulations. Whenever a potentially sensitive issue arises in Ireland, our internal team contacts the relevant firm to ensure all steps are taken to resolve it promptly.

What are the legal responsibilities of a company when they use an Employer of Record service like Boundless in Chile?

The company remains responsible and informs employees of the day-to-day management of the people and teams that are employed through Boundless, including any disciplinary or performance issues.
Boundless ensures compliance with Chile-specific procedures, practices and labour laws while employing people and teams on behalf of the company.

Do employees get all their rights and benefits when employed through an Employer of Record in Chile?

Any new employee that is locally employed through an Employer of Record gets full employment rights and benefits as specified in Chilean employment law. They get a locally compliant employment contract, statutory maternity leave, annual leave, illness benefits, any relevant tax credit, and many more. 

What taxes do I need to pay in Chile?

In Chile, both employers and employees have to pay taxes. For employers, these include social insurance, unemployment insurance and professional illness insurance contributions. For employees, these are social insurance contributions, as well as income tax. To get a clear overview of both employee and employer taxes, use our salary breakdown calculator, submitting any additional data needed and get a downloadable pdf like this one.

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