Benefits in Chile

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. There are two methods that employers can choose to apply regarding gratification:

• Divide 30% of the company’s annual taxable profits (liquid profits) among employees, proportionate to their income.
• Pay the employee 25% of wages earned during the year, regardless of the total net income obtained by the company. This bonus is capped at 4.75 times the Minimum Monthly Income (IMM). The IMM to be considered is the one in force as of December 31 of the respective commercial year. Most employers opt for this option.

Companies may also lower the employee’s base salary stated in the work contract to compensate for the addition of legal gratification (as a way not to increase the total costs for the employer). However, if the base salary is already agreed on in the employment contract, it cannot be lowered without the employee’s consent.

Workers’ compensation insurance in Chile (Seguro de Accidentes del Trabajo y Enfermedades Profesionales, Law 16,744) is mandatory and fully funded by the employer, who must contribute a 0.9% basic rate plus an additional risk-based rate of up to 3.4%, for a maximum total of 4.3% of the employee’s taxable remuneration.

Separately, jobs officially classified as “heavy work” (trabajo pesado) are subject to an additional pension contribution of 2% or 4% of taxable remuneration, shared equally between employer and employee, to finance early retirement.

Companies with more than 20 female employees are required to provide adjoining facilities where mothers can feed their children under the age of two or leave their children while working.

Companies have different options to meet this requirement:

• By establishing its own crèche adjoining, but independent of, the workplace
• By establishing a crèche jointly with other companies in the same geographical area
• By paying for the services of a childcare centre recognized by the National Board of Nursery Schools (JUNJI)

Most tech companies give employees the option of choosing their hardware.

In Chile, employees are not entitled to annual leave during the first year of employment.

More and more tech companies are adhering to more flexible work environments, which may include (1) allowing employees to work from home full time or (2) a hybrid model with two to three days of working from home and the rest from the office. Schedule flexibility is also becoming more common, with some employers enforcing core hours and allowing employees to choose when to work the remainder of their hours or giving employees complete control of their work schedule.

Many tech companies provide employees with a yearly budget (up to CLP 10,000,000) to be spent on their careers — to further their studies and to attend conferences, courses, and other learning activities — with some covering 50% to 100% of the cost of a post-graduate course.

Even though Chile provides its citizens with free healthcare, it is common for employers in the tech industry to offer private health insurance to their employees, paid by the company (usually up to CLP 100,000 monthly). Many companies go beyond basic health insurance and include dental and vision care as well.

Many startups allocate stock options to their early-joiner employees.

A monthly commuting allowance is a common benefit that offers tax-advantaged compensation to employees who commute to work. Transportation stipends are non-taxable.

It is common for employers to review their employees’ work yearly and to provide pay raises or bonuses based on their performance.

Aguinaldos are similar to 13th-month payments. Even though it is not mandatory for private companies to provide employees with this additional pay, many companies break this bonus into two and give it out twice a year, usually during Chile’s Independence Day (18 September) and at Christmas time. The amount can be stipulated by the company and changed yearly and also from employee to employee. However, companies should be careful, as aguinaldos that are delivered systematically may become acquired rights of the employee.

Depending on the role of the employee, some companies cover the school tuition of that employee’s children partially or fully or give childcare allowances.

Depending on the role of the employee, some companies cover that employee’s housing partially or fully.

Many companies provide their remote employees with the equipment to create an ergonomic workstation, including dock stations, headsets, and a desk with a chair.

Some employers offer ticket restaurants to their employees who work from the office, which is a non-taxable fringe benefit in Chile.

The national social security funds the pension system. However, the contributions are mandatory for employees only. Some employers choose to make a contribution to the employee’s pension fund, usually 1% to 3% of the employee’s salary. The benefit is non-taxable and can be withdrawn only upon retirement.

Some companies provide life insurance (with premiums being around CLP 50,000 monthly) or a cash bonus equivalent to a life insurance, usually at the amount of two annual salaries, passed on to the next of kin of the employee or in the case of a long-term disability or dismemberment.