Payroll and Benefits Guide - Paraguay

Paraguay
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Currency

Paraguayan Guaraní (PYG)

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Capital

Asunción
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Employer Taxes

16.50%

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Date Format

dd/mm/yyyy
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Fiscal Year

1 Jan – 31 Dec

Fun Facts

Paraguay is known as the “Heart of South America” because of its central location on the continent.

The country is home to the world’s largest drinking water reservoir, the Itaipu Dam, shared with Brazil.

Paraguay is known for its traditional drink called “tereré,” which is a cold herbal tea consumed with a metal straw.

The country is famous for its traditional ceramic art, particularly the “ñanduti” pottery.

Paraguay is home to the Gran Chaco, one of the largest dry forests in South America.

Paraguay is a major producer and exporter of soybeans.

Paraguay

Contributions

Employee Payroll Tax

Contribution TypeRate
Social Security9.00%

Employer Payroll Tax

Contribution TypeRate
Social Security16.50%

Payroll

Payroll Cycle

The payroll cycles are biweekly or monthly.

13th Salary

It is a legal requirement for employers to provide a 13th-month payment to employees. It is commonly known as the Christmas bonus, is equivalent to one-twelfth (1/12) of the total remuneration earned by the employee throughout the year.

Work Hours and Week

In Paraguay, the work week generally consists of 48 hours a week, 8 hours per day.

Overtime

All work above the standard hours per week is paid as overtime and regulated by the employment contract/collective agreements.
Paraguay

Leave

Paid Time Off

12 working days of leave for the first 5 years of service,18 working days of paid leave for 5 to 10 years of service, After ten years of service, an employee is entitled to 30 working days of paid leave.

Public Holidays

The government decides each year if any public holidays falling on weekends lost are moved to a weekday in lieu.

Sick Days

Employees are entitled to paid sick leave provided they have made a minimum of four weeks of Social Security payments.

Maternity Leave

In Paraguay, employees are entitled to 18 weeks of maternity leave, which is fully paid and compensated by Social Security (IPS). To qualify for maternity leave, employees must provide a medical certificate confirming their pregnancy.

In Paraguay, employees are entitled to 18 weeks of maternity leave, which is fully paid and compensated by Social Security (IPS). To qualify for maternity leave, employees must provide a medical certificate confirming their pregnancy.

For mothers who give birth to multiple children, such as twins or triplets, an additional 30 days of leave per child is granted

Paternity Leave

Father or partner of the child is entitled to two weeks of paid paternity leave following the birth of the child.

Parental Leave

There are no provisions in the law regarding parental leave.

Termination

Termination Process

In Paraguay, the termination process for employees depends on the terms and conditions outlined in the employment agreement or collective agreement. It also takes into account the type of contract and the reason for termination.

Notice Period

The mandatory notice period is one day.

Severance Pay

The calculation of severance pay for employees is based on their length of service with the employer. The severance pay is determined as 15 days of the employee’s regular salary for each year of service, up to a maximum payment of 50% of their annual salary.

Probation Period

Probation Period

The probationary period is 30 days for unqualified employees or domestic workers and 60 days for qualified workers or apprentices.

Immigration

When traveling to Paraguay for work purposes, individuals generally need to obtain a business visa unless their country of origin is exempt from visa requirements for Paraguay. The business visa allows entry into the country and is typically valid for six months, with the possibility of renewal for an additional six months if needed.

When traveling to Paraguay for work purposes, individuals generally need to obtain a business visa unless their country of origin is exempt from visa requirements for Paraguay.

The business visa allows entry into the country and is typically valid for six months, with the possibility of renewal for an additional six months if needed.

For Work Permits

Provisional Residence Permit

Temporary Residence Permit

Temporary Residence Permit

VAT

The standard rate of VAT in Paraguay is 10.00%.