Chile is one of the most economically and socially stable countries in South America. With the ease of doing business there and so many opportunities for growth, many companies find expansion into Chile is a seamless process. Before you get started hiring employees, there are some important payroll and labor aspects to consider.

Payroll and Tax Considerations:

• The current minimum wage is CLP 337,000 per month for employees between the ages of 18-65. The minimum wage for employees under 18 and over 65 is CLP 251,394
• The standard work week is 45 hours and the workday cannot exceed 10 hours. Overtime is paid as an additional 50% of daily wages and cannot exceed more than 2 hours per day
• Employees are entitled to severance pay after one year of service that is equal to one month of salary for each year of work, limited to 11 months’ salary
• The tax slabs on income are set monthly, depending on the monthly tax unit set by the government, ranging from 0-35% on total units
• All residents are required to pay taxes on global earnings
• The corporate tax rate is 27% for companies operating in Chile, with additional withholding taxes applied to branch office profits for certain businesses. Advance tax payments are required on a monthly basis, and tax returns must be submitted in April of each year.

HR and Statutory Requirements

• Employees are entitled to 15 days of annual leave after a full year of service
• Employees with more than 10 years of service receive 1 extra day of annual leave for every 3 years of service
• Employees are entitled to 2 days of sick leave in the private sector and 3 days for employees in the public sector
• Female employees receive 6 weeks of maternity leave before childbirth and 12 weeks after for a total of 18 weeks
• New fathers receive 5 days of paid paternity leave to be used within the first month after the birth of the child
• The legal retirement age is 65. The monthly pension is 50% of the average salary for the last 5 years worked

Holidays in Chile

• January 1 – New Year’s Day
• April 15 – Good Friday
• April 16 – Holy Saturday
• May 1 – Labor Day / May Day
• May 21 – Navy Day
• June 20 – National Day of Indigenous People
• June 27 – Saint Peter and Saint Paul
• July 16 – Our Lady of Mount Carmel
• August 15 – Assumption of Mary
• September 18 – National Day
• September 19 – Army Day
• October 10 – Columbus Day
• October 31 – Reformation Day
• November 1 – All Saints’ Day
• December 8 – Immaculate Conception Day
• December 25 – Christmas Day

Blue Marble has simplified payroll and HR compliance in Chile. Our cloud-based technology platform with customized, monthly reporting allows you to view your payroll across all countries and currencies in real-time. We offer a unique, hybrid service model with a dedicated US-based team and in-country experts in Chile to help when questions come up. Talk to us today about simplifying your global payroll and operations in Chile.