Payroll and Benefits Guide - Chile

Chile
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Currency

Chilean Peso
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Capital

Santiago
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Employer Taxes

4.24%
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Date Format

dd/mm/yyyy
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Fiscal Year

1 Jan – 31 Dec

Fun Facts

Chile holds the record for the world’s narrowest country being only 177 kilometers or 110 miles long.

The city of Punta Arenas, Chile once was the southernmost city in the world and serves as a port into Antarctica.

Along with France, Italy, and Spain, Chile is one of the biggest wine producers in the world.

The famous Easter Island is a territory of Chile.

Chile is home to the tallest volcano, Ojos del Salado.

It has a literacy rate of 97%, one of the highest in Latin America.

Chile

Contributions

Employee Payroll Tax

Pension10.0%
Health Plan7.00%
Unemployment Insurance0.60%

Employer Payroll Tax

Disability and Survival Insurance (SIS)1.84%
Unemployment2.4%

Payroll

Payroll Cycle

Chile has a monthly payroll cycle.

13th Salary

Chile’s legislation has no requirements for a 13th salary or year-end bonus.

Work Hours and Week

The typical workweek in Chile is 45 hours, in the span of 5 to 6 days. As of this year, there are plans to decrease it to 40 hours over the course of five years.

Overtime

Employers can extend workdays by up to 2 hours a day or a total of 10 hours a week with a pay rate of 150% of the employee’s regular pay.
Chile

Leave

Paid Time Off

At least 1 year of employment grants employees at least 15 days of paid leave. An extra day would be awarded every 3 years after 10 years of employment.

Public Holidays

There are 15 public holidays.

Sick Days

Leave would only be approved as sick days if the employee can provide a medical certificate within two days. The first three days of sick leave are not paid. From the fourth day onwards, it will be paid for by social security which could have a cap.

Maternity Leave

Pregnant employees are given eighteen paid weeks of maternity leave comprising of six weeks prenatal leave and twelve weeks postnatal leave. After this period, additional leave of up to twelve weeks can be requested.

Paternity Leave

Fathers only have five days of paid paternity leave. However, seven weeks after birth, a mother can choose to give some of her remaining maternity leave to the father.

Parental Leave

Only female employees are given the right to a parental leave of up to ten paid days for a child of seventeen years and younger. However, the leave done must be made up in a later time.

Termination

Termination Process

Before termination, the cause must first be determined. A letter prepared by the employer containing the cause and the termination date must be either signed by the employee or sent to their home address. Afterwards, the same is sent to the Chilean Labor Ministry,.

Notice Period

In Chile, a standard of one month is given as required by law. It is typical for this one month to be waived and a payment to be given instead to the employee.

Severance Pay

Employees who are let go without cause are entitled to at least a month of severance pay with the condition of at least a year of service.

Probation Period

Probation Period

By law, a probationary period is not allowed in Chile

Immigration

Regardless of a person’s necessity of a visa upon entry, any foreigners coming to work in Chile need a work visa.

VAT

The commonly used standard rate of VAT in Chile is 19.00%