Understanding Employment Norms in Chile: A Comprehensive Guide
Tarmack LogoRequest a demo
HP Top Banner

Hiring Talent And Managing Payroll In Chile?

Get Started

Hiring in Chile? Read on to find out the employment norms (like taxes, payroll and benefits) and EOR (Employer on Record) norms in Chile

Employment Norms in Chile

Chile has a well-established legal framework that governs employment norms and regulations. Understanding the employment norms and their nuances is crucial to ensure compliance and avoid potential legal and financial consequences.

General Information:

  • The Chile currency is the Chilean peso (CLP).
  • Santiago is the capital of Chile.
  • Spanish is the official language of Chile. Documentation can be in Spanish.
  • As of 2021, the GDP of Chile was reported to be 508 Billion USD.
The requirements for employee protections, workers' rights, and general employment relations that apply to Chile's workforce are outlined in the Chilean Labour Code.
Chile map

Table of Contents

  • Agreements
  • Onboarding Process
  • Visa
  • Minimum Wage
  • Payroll Cycle
  • Annual Bonus
  • Health Benefits
  • Working Hours and Overtime
  • Leaves
  • Social Security
  • Taxes for Employers
  • Taxes for Employees
  • Probation
  • Termination
  • Severance Pay
  • Employees or Contractors
  • Final Words


  • In Chile, official employment agreements must be written in Spanish. If both parties like it, an English translation may work. It must, however, always be accompanied by a Spanish translation.
  • Contracts that have a start, as well as an end date, are known as fixed-term agreements. The fixed-term agreement can only have a one-year term limit (or a limit of two years for specific highly skilled professionals). This will become a contract with an indeterminate term when:
    • If the responsible parties have decided and shown their consent to more than two employment contracts within 12 months or more contracts within 15 months
    • If in case the contract exceeds the specified maximum term permitted (one or two years based on the qualification of the employee)
    • After its second renewal
    • Immediately as the term gets over if the employer does not terminate the employment on the basis of completion of the term
Onboarding Process

Onboarding Process

  • The onboarding process differs from company to company.
  • After the employee signs the Statement of Work, onboarding takes place within two business days.
  • There are some general requirements to keep in mind:
    • Visa
    • Work Permit
    • Tax Identification Number
    • Bank Account
    • Health Insurance


Chile has 6 types of Visas:
  • Chile Tourist Visa is given to foreign nationals who want to stay in the country for 30 to 90 days for tourism purposes.
  • Chile Student Visa is given to foreign nationals who wish to study in Chile. Before you travel, you must be approved or enrolled in a Chilean educational institution.
  • Chile Work Visa is given to foreign nationals who have obtained employment in Chile. You must already be employed by a Chilean company or a foreign corporation with operations in Chile.
  • Chile Temporary Residence Visa is given to foreign nationals who are considered advantageous to the Chilean economy, have familial ties to Chile, or want to invest. It is given out for a maximum of one year.
  • Chile Working Holiday Visa is given to young people who wish to participate in the Working Holiday Programme and are from Australia, Canada, and New Zealand.
  • Chile Retirement and Periodic Income Visa is a category of visa that needs any form of recurring income, including a pension.

Tarmack helps you easily hire international talent as your full time employees without opening international subsidiaries. Find out more about our Employer of Record services

Learn More
Minimum Wage

Minimum Wage

The minimum wage in Chile is determined by the government every year, and there are often two rates: one for working adults and one for minors and pensioners. The minimum gross monthly pay is:
  • Staff members who are over 18 and under 65 receive CLP 410,000
  • Employees under the age of 18 and those over 65 receive CLP 305,851
Payroll Cycle

Payroll Cycle

All employee payments are made in equal monthly installments, on or before the last working day of each calendar month.
Annual Bonus

Annual Bonus

The 13th-month salary is not mandatory but customary in Chile. Employers provide 13th-month pay to Chilean employees
Health Benefits

Health Benefits

  • FONASA, which stands for 'Fondo Nacional de Salud,' is the National Health Insurance program that underpins Chile's public healthcare system.
  • Employers are responsible for paying the costs of their employees' medical care after deducting a required 7% of their employee's wages. An employee may receive treatments under this plan at reduced costs.
Working Hours and Overtime

Working Hours and Overtime

  • Work hours: 9 hours per day, or 45 hours per week, are considered standard working hours. People work from Monday to Friday.
  • Break: Workers are entitled to 11 hours between workdays and at least a 30-minute break during the workday. Except in certain industries, including retail, work is prohibited on Sundays and federal holidays, and employees are required to take at least one rest day each week.
  • Overtime: Employees in Chile are compensated for overtime hours worked during a typical workday at a rate of 150% of their hourly wage. Employees get paid 130% of their regular rate for working on a rest day.


Sick leaves

  • If an employee has a medical certificate explaining their illness, they are eligible for sick pay beginning on the fourth day of their illness from the Chilean health insurance authorities.

Parental leaves

  • Maternal Leave- The health insurance company will pay for sick leaves starting from six weeks before birth to 24 weeks after birth, totaling 30 weeks. In addition to the statutory annual and holiday benefits, mothers of children under 18 are further entitled to 10 days of leave. Mothers who are nursing may take an hour-long break to breastfeed a kid under two.
  • Paternal Leave- In addition to sharing the mother's maternity leave of up to six weeks, or 12 half-weeks, paid at 100% of the employee's regular wage, fathers are also permitted to take five days off following delivery.

Annual leaves

  • Maternal Leave- The health insurance company will pay for sick leaves starting from six weeks before birth to 24 weeks after birth, totaling 30 weeks. In addition to the statutory annual and holiday benefits, mothers of children under 18 are further entitled to 10 days of leave. Mothers who are nursing may take an hour-long break to breastfeed a kid under two.

Other leaves

  • Adoption leaves: Parents who are adopting a child are entitled to the same leaves as natural parents. If the child adopted is more than six months old then six weeks of pre-natal leave is given to the employee.
  • Carer's leave: Parents can take a one-day leave to take care of the ill child, who is less than one year in age.
  • Medical Leave of Absence: If a certified doctor has declared that the employee is unable to perform his/her job then the employee is granted leave for the days asked by the physician. Remuneration is not paid by the employer for this tenure, employee get subsidies from Isapre national healthcare institutions.

Public Holidays (for the Calendar year 2023)

  • New Year's Day (1st January)
  • Additional Holiday (2nd January)
  • Good Friday (7th April)
  • Holy Saturday (8th April)
  • Labor Day (1st May)
  • Navy Day (21st May)
  • National Day of Indigenous People (21st June)
  • Feast of Saints Peter and Paul (26th June)
  • The Feast of Our Lady of Mount Carmen (16th July)
  • Feast of Assumption (15th August)
  • Independence Day (18th September)
  • Day of the Glories of the Army (19th September)
  • Columbus Day/Day of the Races (9th October)
  • National Day of the Evangelical and Protestant Churches (27th October)
  • All Saints' Day (1st November)
  • Feast of the Immaculate Conception (8th December)
  • Christmas Day (25th December)

If you structure your global talent acquisition strategy well, you will definitely enhance your talent quality and availability through a distributed workforce. Tarmack offers end to end recruiting services to help you achieve this.

Schedule Consultation
Social Security

Social Security

Both employers and employees are required to contribute to social security each month, and employers are in charge of deducting the employees' portion of the contribution and sending it, together with their portion of the contribution, to the social security authorities.
Taxes for Employers

Taxes for Employers

  • 3.40% - risk surcharge
  • 0.93% - occupational work accident insurance
  • 2.40% - unemployment insurance plan
  • 1.86% - disability and life insurance contribution

Did you know that as a part of the Employer of Record service, Tarmack offers global payroll across 100+ countries? Not just that, we even offer this global payroll service on a standalone basis. So if you're looking for a payroll provider for one or more countries, you're at the right place.

Learn More
Taxes for Employees

Taxes for Employees

  • Up to 40% - personal income tax rate (vary based on salary and other variables)
    • 0% tax for income upto 690,268.50 CLP
    • 4% tax for 1,533,930 CLP
    • 8% tax for income upto 2,556,550 CLP
    • 13.5% tax for income upto 33,579,170 CLP
    • 23% tax for income upto 4,601,790 CLP
    • 30.4% tax for income upto 66,135,720
    • 35% tax for income upto 15,850,610
    • 35% tax for income above 15,850,610
  • 0.6% - unemployment insurance
  • 10% - pension contribution
  • 7% - health insurance


The probation period in Chile is of 14 days and it is a mandatory one.

Ready to convert your contractor to a full time employee?

Every now and then, that contractor you hired does such a good job that you want to hire them as a full time employee. Convert such contractors into your full time employees by using Tarmack's Employer of Record service. Doesn't matter where the contractor is. Our service covers 150+ countries around the globe!

Talk To Us


In Chile, terminations might be complicated. Employers are not permitted to terminate employees at will in Chile. Employers are required to base dismissals on legitimate business needs for the company.
Terminations in compliance include:
  • Employee's voluntary termination
  • Both parties agree
  • An employer acting unilaterally in light of:
    • Period of probation
    • Objective evidence
    • Dismissal for cause
  • By the time the contract expires
With fixed-term contracts, the employer must inform the employee in writing once the time has ended that the agreement won't be renewed.
Severance Pay

Severance Pay

For every year of employment, up to a maximum of 11 years, employees who have been with their employers for at least 12 months are entitled to severance pay equal to one month's wage. To calculate severance compensation, any half year that is greater than six months is rounded up to a full year. Workers who are fired for serious misconduct are not eligible for severance pay.
Employees or Contractors

Employees or Contractors

  • The sole distinction between full-time employees and contractors is the type of service they offer. Employers are in charge of how full-time employees provide their services. They also determine the working hours of the workforce.
  • Contractors frequently work on their own. They are not under the direct supervision of their employers. An agreement between the parties specifies the planning and signing of a project that has been agreed upon by both sides.
  • Full-time employees are treated differently than contractors. Misclassifying them can lead to fines.
Final Words

Final Words

In Chile, employment norms and opportunities are governed by the Labor Code and are generally favorable to employees. The country has a relatively low unemployment rate and a variety of job opportunities in various sectors, including mining, agriculture, and services. Employment of record is an important initiative in Chile to formalize the workforce, protect workers' rights, and boost the economy.

A truly global HR platform with everything you need to build, grow & manage a global team.

  • bestTalentIdentifying & recruiting the best talent
  • payrollPayroll with full compliance across 100+ countries
  • agreementsEmployment agreements as per local laws
  • contractorContractor invoices & time management
  • onboardingSmooth remote onboarding of employees
  • immigrationImmigration & mobility services around the world
Find Out More