Employer of Record in Chile

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Rivermate's Employer of Record (EOR) solution helps companies hire remote employees in Chile . We take care of global payroll, taxes, benefits, compliance and HR activities. So you can focus on growing your business. Our Employer of Record (EOR) solution is beneficial to companies that want to hire remote employees in a breeze. On this page you will find employment information for Chile.

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1. Grow your team in Chile with Rivermate as your Employer of Record (EOR) / PEO

Payroll, benefits, taxes, and compliance can be difficult to manage in Chile , particularly if you don't have established local relationships. You can hire employees in Chile effectively, conveniently, and in full compliance with all relevant labor laws using Rivermate's global Employer of Record (EOR) solution. We handle the responsibilities and legal risks associated with foreign employment so you can concentrate on growing your company.

2. Summary

Chile, formally the Republic of Chile, is a South American nation in the west. It occupies a long and narrow strip of territory between the Andes to the east and the Pacific Ocean to the west, making it the world's southernmost nation and the closest to Antarctica. Chile has a land area of 756,096 square kilometers (291,930 square miles) and a population of 17.5 million people as of 2017. It borders Peru to the north, Bolivia to the northeast, Argentina to the east, and the Drake Passage to the south. Chile also has jurisdiction over the Pacific Ocean islands of Juan Fernández, Isla Salas y Gómez, Desventuradas, and Easter Island. Under the Chilean Antarctic Territory, it also claims about 1,250,000 square kilometers (480,000 square miles) of Antarctica. Santiago is the country's capital and biggest city, and Spanish is the official language.

In the mid-16th century, Spain captured and colonized the area, displacing Inca sovereignty but failing to subdue the autonomous Mapuche who lived in what is now south-central Chile. Chile declared independence from Spain in 1818 and emerged in the 1830s as a largely stable authoritarian republic. Chile saw tremendous economic and geographical progress in the nineteenth century, overcoming Mapuche opposition in the 1880s and attaining its present northern area in the War of the Pacific (1879–83) after conquering Peru and Bolivia. Up to the 1970s, Chile saw democracy, fast population expansion and urbanization, and a growing dependence on copper mining exports for its economy. The nation underwent considerable left-right political division and unrest throughout the 1960s and 1970s. This progression culminated in the 1973 Chilean coup, which deposed Salvador Allende's democratically elected left-wing government and established Augusto Pinochet's 16-year right-wing military dictatorship, which left over 3,000 people dead or missing. Following a referendum in 1988, the dictatorship collapsed in 1990 and was followed by a center-left coalition that governed until 2010.

Chile is a developing nation with a high-income economy that ranks 43rd in the Human Development Index. It is one of South America's most economically and socially stable countries, dominating Latin America in rankings of competitiveness, per capita income, globalization, state of peace, and economic freedom. Chile also ranks high in the Americas for state sustainability, and democratic progress, and has the lowest murder rate behind Canada. It is a founding member of the United Nations, CELAC, and the Pacific Alliance, and it joined the OECD in 2010.

Hiring talented employees in a short span is not an easy task. Partnering with an Employer of Record (EOR) like Rivermate in Chile is your best option, giving your organization enough time to focus on other aspects of international expansions like project management and inventory management. The EOR takes care of all the compliance and legal issues while helping you speed up hiring using their knowledge of domestic employment practices and virtual onboarding tools. Top EORs also have provisions for the e-signing of documents to enable faster onboarding.

3. Public holidays

4. Types of leave

There is no information about the types of leave for this country.

Paid time off

Employees who have worked for at least a year are entitled to 15 days of paid vacation.

Public holidays

Chile recognizes 16 public holidays.

Sick days

Employees in Chile have the right to sick leave provided they can have a medical report within two days of the start of the leave. Within three days, the contractor must submit the certificate to the health care company.

The person is not entitled to pay for the first three days of sick leave.

Employees are entitled to sick leave until the fourth day, although there could be a limit.

Maternity leave

In Chile, a mother is entitled to 30 weeks of paid maternity leave, split into six weeks prior to the delivery and twenty-four weeks after the birth, and is covered by health insurance.

The woman is not expected to engage in any actions that would jeopardize her health during her pregnancy (i.e. heavy lifting). If this is a work condition, the boss must reassign her to a new role without wage loss during her pregnancy.

Paternity leave

Paternity leave is compensated for five days for fathers.

The mother may choose to pass any or all of her maternity leave to the father after the seventh week of childbirth.

Parental leave

For a child under the age of 18, female employers are entitled to ten days of maternity leave. Although the employee is entitled to compensation, the days off must be made up at a later date.

Other leave

Bereavement Leave: Employees are entitled to three days of paid leave if a member of their immediate family dies.

5. Employment termination

There is no information about employment information for this country.

Termination process

To fire an employee, the reason for termination must first be determined. According to the legislation, the following reasons for termination are valid: mutual consent, resignation, or contract expiration, breach of contract (employer must be able to demonstrate), or the company's necessity for restructuring (the most common reason for the dismissal of an employee).

The employer must write a letter to the employee explaining the reason for termination and the effective date, which must be signed in person or delivered certified mail to the employee's home address. Additionally, the identical letter must be filed with Chile's Ministry of Labor. It is customary for employees to be told on their final day of employment.

Following the termination letter, the employer must draft a severance agreement that details the reason for the termination and the amount to be paid to the employee. Within ten days of termination, the severance agreement must be executed.

In the event of a mutual agreement, both parties must sign a document stating that they have decided to end the employment contract. Additionally, during the first 1-2 weeks following the termination date, a severance agreement must be signed.

Notice period

One month's notice is required by law. It is not unusual for employers to waive the notice period and make payment in lieu of notice.

Probation period

The probation period is fixed at 12 months.

Severance pay

If the employee has worked for the company for at least one year, they are eligible to severance pay. Each year of service up to 11 years entitles the employee to one month's compensation. Additionally, after one year of employment, the employee is entitled to an additional month of severance pay if they work for at least half of the subsequent year.

6. Working hours

There is no information about the working hours for this country.

General working schedule

The standard workweek is 45 hours, with a maximum of ten hours per day. The employer may extend the day by no more than two hours per day or the week by no more than ten hours per week. Employees aged 15 to 18 may work no more than eight hours per day.

Night work is compensated at 50% of the standard rate. Employees who are under the age of 18 or who are pregnant are not permitted to work at night.

Between workdays, employees are entitled to 11 hours of rest and are not permitted to work on Sundays (with certain exceptions depending on the sector, such as retail for example). Each employee is entitled to one rest day per week.


Overtime is compensated at 150 percent of the regular rate of pay, unless the collective bargaining agreement or employment contract provides for a higher rate. On a typical workday, the rest period is at least 30 minutes. No more than ten hours of overtime per week, or two hours per day, should be worked.

7. Minimum wage

There is no information about the minimum wage for this country.

Chile's minimum monthly wage is 320,500 Chilean pesos (as of 2020). This equates to approximately $460 at the moment. Employers are encouraged to evaluate an employee's performance annually and to compensate them appropriately. While Chile does not require a 13th month bonus, any bonuses agreed upon must be paid in local currency.

8. Employee benefits

There is no information about the employee benefits for this country.

Employees must contribute to a private health insurance plan known as "Isapres," for which the employer is required to withhold up to a monthly cap of about USD 214 pre-tax. Any additional money supplied for health insurance is considered supplemental and is deducted from the employee's net pay after taxes. The employer might choose whether or not to reward the employee for the difference with a taxable bonus.

In some situations, employers may decide to provide a benefit equivalent to two years' pay in the form of life insurance. This may be the best option to provide this benefit if your organization has worldwide umbrella coverage that can be extended to international coworkers.

Car allowances are uncommon in Chile, except for executive positions and staff who are forced to utilize their personal vehicles for business purposes. Employees cannot be given with company cars without incurring a substantial tax penalty.

Another approach to provide tax-advantaged remuneration to employees who commute to work is to provide a monthly commuting allowance subject to specific limits based on gross wage.

9. Taxes

There is no information about the taxes for this country.

Corporate tax

Companies in Chile are subject to a corporate tax rate of 27 percent.

Individual income tax

Individuals in Chile are imposed an income tax rate between 0 percent and 35 percent. Generally, those who have taxable incomes of not over 950 US dollars are tax-exempt. Those who have taxable incomes of over 8,400 US dollars are imposed an income tax rate of 35 percent.

VAT, GST and sales tax

The standard rate for the value-added tax (VAT) or goods and sales tax (GST) in the Chile is set at 19 percent.

10. VISA and work permits

There is no information about VISA and work permits for this country.

Anyone who comes to Chile with the purpose of working, even if they do not need a visa to enter, must get a work visa.

Foreigners may get one of two types of work visas. The first is a Visa Subject to a Contract, which is for individuals who have already acquired a work contract in Chile. It is valid for two years and may be renewed for another two years. Following that, a candidate must apply for permanent residence status, which allows the individual to continue working in Chile. The procedure takes between 20 and 30 days to finish. The application should be submitted 30-60 days prior to the estimated arrival date.

To get the permission, the employing firm must be established in Chile, show that the hiring would benefit Chile, and have paid their VAT and employee insurance for the previous three months.

The second form of work visa is the Working Holiday Visa, which permits persons between the ages of 18 and 35 from Colombia, Mexico, Peru, Germany, Canada, Australia, the Czech Republic, and New Zealand to work in Chile for a year. It is not possible to renew the visa.

11. Employer Of Record service terms

There is no information about the Employer of Record (EoR) service terms for this country.

Employment contracts

In Chile, it is best practice to have a robust employment contract in place, in the local language, that specifies out the conditions of the employee's remuneration, benefits, and termination criteria. In Chile, an offer letter and job contract should always contain the salary and any other remuneration amounts in Chilean pesos rather than foreign money.

With Rivermate being your Employer of Record (EoR) in Chile, you do not have to worry about the employment contracts, as we take care of that.

Minimum assignment length

Both parties must sign a permanent contract in writing. The contract is given to both the employer and the employee. The contract must be signed within 15 days of the employment procedure being completed. To avoid any form of penalty, the deadline for signing fixed-term contracts is five days. A fixed-term contract may last up to 12 months.

Payment currency

Chilean peso (CLP)

13.Opening a subsidiary in Chile

There is no information about the working hours for this country.

How to set up a subsidiary

You will begin the Chile subsidiary establishment procedure by establishing your firm with the Registro Publico de Comercio and Servicio de Impuestos Internos. It takes around 15 to 20 days to completely enroll. You'll also need to publish a social constitution and establish in-country bank accounts, both of which need formal documentation. This account may take up to four weeks to set up.

Other stages are as follows:

1. Obtaining approval from Chile's Firm Registry for a company name

2. Creating a succinct summary of what your business does

3. Fill in the blanks with the names of all shareholders and corporate directors.

4. Obtaining a Chilean registered office address

5. Creating a Memorandum of Association and Articles of Association and submitting them to the Conservador de Comercio

A limited liability firm must have at least two shareholders and one director. They might be of any nationality and are not required to reside in Chile. The minimum share capital necessary to establish a Chile subsidiary is $1.

Subsidiary laws

To be compliance, you must adhere to a number of Chilean subsidiary legislation. Otherwise, you may face significant penalties, or the subsidiary may be closed down. One significant legislation mandates you to pay workers and government officials from an in-country bank account, so you cannot ignore this critical step when establishing your Chile subsidiary.

You must also choose a business name that is not currently in use. When it comes time to submit your shareholders' information, they may be businesses or people of any country, but their names must be included in the company documents. Shareholders might range from two to fifty. The director of the subsidiary may be of any nationality and does not have to reside in Chile.

In Chile, you must get a Tax Identification Number, known as a Rol Unico Tributario (RUT). According to Chile subsidiary legislation, you must get a signed public deed and publish your subsidiary in the Official Gazette in order to do so. You should get your RUT within 10 days, and your firm will be legally able to function.

13. Why choose Rivermate as your Employer of Record / PEO in Chile

Establishing an entity in Chile to hire a team takes time, money, and effort. The labor law in Chile has strong worker employment protection, requiring great attention to details and a thorough awareness of local best practices. Rivermate makes expanding into Chile 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 (EOR) solutions in Chile 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 Chile via our Employer of Record (EOR) / PEO solution.

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