Guide to employment, payroll and benefits in

Paraguay

Rivermate offers complete payroll, benefits and compliance services for

Paraguay

01. Overview

Last updated: 

August 19, 2021

Currency
Paraguayan GuaranÍ
Capital
Asuncion
Ease of doing business
59.1
Language
Spanish
Population
7132538
GDP growth
5.21%

02. Grow your team in

Paraguay

with Rivermate

Payroll, benefits, taxes, and compliance can be difficult to manage in

Paraguay

, particularly if you don't have established local relationships. You can hire employees in

Paraguay

effectively, conveniently, and in full compliance with all relevant labor laws using Rivermate's global employment solution. We handle the responsibilities and legal risks associated with foreign employment so you can concentrate on growing your company.

03. Summary

Paraguay is a South American country that is formally known as the Republic of Paraguay. Argentina to the south and southwest, Brazil to the east and northeast, and Bolivia to the northwest form the country's borders. Although it is one of only two landlocked countries in South America, it has coasts, beaches, and ports on the Paraguay and Paraná rivers, which provide access to the Atlantic Ocean through the Paraguay-Paraguay Waterway. Spanish conquistadores arrived in 1524 and established Asunción, the first capital of the Governorate of the Ro de la Plata, in 1537. During the 17th century, Jesuit missions were founded in Paraguay, where native Guarans were converted to Christianity and introduced to European culture. Following the expulsion of the Jesuits from Spanish lands in 1767, Paraguay became a more peripheral colony with fewer urban centers and settlers. Following its independence from Spain in the early nineteenth century, Paraguay was governed by a succession of authoritarian governments with policies that were nationalist, isolationist, and protectionist. The catastrophic Paraguayan War, which saw the country lose half of its prewar population and about 25–33% of its territory to the Triple Alliance of Argentina, Brazil, and Uruguay, brought an end to this time. Paraguay faced another major foreign conflict in the twentieth century, the Chaco War against Bolivia, which it won. Following that, the country was ruled by a series of military dictators, culminating in Alfredo Stroessner's 35-year dictatorship, which lasted until his overthrow in 1989 by an internal military coup. This marked the start of Paraguay's democratic period, which is still going strong today. Paraguay is an emerging market. Mercosur, the United Nations, the Organization of American States, the Non-Aligned Movement, and the Lima Group are all founding members. In addition, the South American Football Confederation is headquartered in Luque, which is part of the Asuncion metropolitan area. The majority of Paraguay's seven million inhabitants are mestizo, and Guarani culture continues to have a stronghold; more than 90% of the population speaks Guarani dialects in addition to Spanish. Despite a history of poverty and political repression, global polling data consistently rates Paraguay as the "happiest country on the planet."

04. Public holidays

05. Types of leave

Paid time off

Annual leave allowance depends on how long an employee has been employed: 1 year of employment- 12 days of leave At least 5 years of employment- 18 days of leave At least 10 years of employment- 30 days of leave

Public holidays

Paraguay recognizes thirteen public holidays.

Sick days

When an employee becomes unwell, they are entitled to sick leave and are paid 50% of their usual wages by social security (IPS), with the remaining 50% covered by the employer.

Maternity leave

In Paraguay, maternity lasts for 18 weeks and is paid at a rate of 100% of the gross salary by IPS. In the event of multiple births, the woman receives an additional 30 days per child.

Paternity leave

After the birth of the kid, a new father is entitled to two weeks of paid paternity leave. IPS also pays paternity leave at a rate of 100 percent of the gross wage.

Parental leave

There are no statutory laws regarding parental leave in Paraguay.

Other leave

An employee is entitled to three days of bereavement leave if a member of their immediate family dies.

06. Employment termination

Termination process

In Paraguay, an employee must get written notice of termination. For example, an employee who has worked for the company for more than ten years cannot be terminated for unjust reasons; they must be terminated for a legitimate reason.

Notice period

Mandatory notice period is 1 day.

Severance pay

If the termination is justified (for example, due to misconduct or substandard performance), the employee is not entitled to severance pay. It is critical to note, however, that if an employee believes they were terminated unfairly due to the employer's just cause or misconduct and the employer is unable to prove the reason for termination in a labor court, the employee is entitled to severance pay (15 days of wages for each year worked or up to half a year's wages) as well as back pay from the date of termination. Without cause, an employee is entitled to 15 days of severance pay for each year of service. For an employee who has worked for a company for more than ten years, if the employer is unable to establish just cause in a labor court, the employee may be reinstated or be entitled to double the regular severance pay.

Probation period

For unqualified employees or domestic workers, the probationary period is 30 days; for qualified employees or apprentices, the probationary period is 60 days.

07. Working hours

General

The standard workweek is 48 hours and the daytime work period is 8 hours. Night work, defined as work performed between the hours of 8 p.m. and 6 a.m., cannot exceed 42 hours per week or seven hours per day. Working a combination of day and night shifts is limited to 45 hours per week. For nighttime work, employees are entitled to a 30% premium over the standard rate.

Overtime

Overtime hours are limited to 57 per week and three per day. Overtime pay is typically 50% above the hourly rate. When overtime is performed at night, the rate is multiplied by one hundred percent. Overtime on public holidays is paid at the standard rate plus 100%.


Employees are entitled to at least 30 minutes of rest during the workday and a Sunday rest day. Those who work on a rest day are compensated with an additional rest day.

08. Minimum wage

General

Paraguay’s compensation laws include a minimum wage of 1,824,055 Paraguayan Guarani per month. However, domestic workers have a special minimum wage of 40 percent of the regular minimum wage and should get deductions for housing and food.

09. Employee benefits

General

Although the Ministry of Public Health and Social Welfare network provides basic health care, workers may choose to purchase private insurance.

Mandatory benefits postulated by law include a probationary period, pay on annual leaves, public holidays, sick leaves, maternity leave, paternity leave, and overtime pay. Statutory benefits also include social security benefits

10. Why Rivermate as your Employer of Record / PEO?

Establishing an entity in

Paraguay

to hire a team takes time, money, and effort. The labor law in

Paraguay

has strong worker employment protection, requiring great attention to details and a thorough awareness of local best practices. Rivermate makes expanding into

Paraguay

simple and effortless. We can assist you with hiring your preferred talent, managing HR and payroll, and ensuring compliance with local legislation without the hassle of establishing a foreign branch office or subsidiary. Our PEO and Global Employer of Record solutions in

Paraguay

give you peace of mind so you can focus on running your business.

Please contact us if you'd like to learn more about how Rivermate can help you hire employees in

Paraguay

via our Employer of Record / PEO solution.

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