Employer of Record in Chile

How an Employer of Record works in Chile

The primary objective of an Employer of Record (EOR) in Chile is to help international employers without their own local legal entity hire workers in Chile. An EOR, like Rivermate, becomes the legal employer and handles employment compliance end to end. You retain the day-to-day management of the employee. Our EOR services are based on three important pillars:

• Local HR experts who understand the market and employment laws.
• A partner network that allows us to provide competitive benefits.
• The Rivermate platform that simplifies every aspect of the employment relationship.

Chilean labor market: At a glance

The hiring market
Greatest hiring activity:	Santiago
Hiring timelines:	Locals: Up to 9 business days Foreign nationals: 6 months +
In-demand roles:	Sales, logistics, engineering, IT support roles
Roles that take the longest to fill:	Engineers, technical workers: 8-12 weeks Cybersecurity, IT, AI specialists: 6 - 12 weeks

The salary market
Employer tax contributions:	Unemployment insurance: 2.4% Occupational accident and disease insurance: 0.90% to 3.4% Disability and survival insurance: 1.62% Fondo SANNA (situation dependent) Heavy-work pension contribution (risk dependent)
Monthly minimum wage:	CLP 553,553 (1 May 2026)
Average gross monthly salary:	CLP750,000 ($816.99 USD)
Income tax rates:	Progressive income tax rates, ranging from 0% to 40%

Hiring in Chile: The true cost

Chile is a moderate-cost labour market where employer contributions are spread across several mandatory contributions and capped when salaries reach a certain level. Compared with the US, the UK or Europe, Chile is still considered an economical hiring option.

Average and median salaries

Salaries in Chile vary by industry, occupation, seniority and whether you’re hiring a local or foreign national. According to an INE report, the average labor income for 2025 was CLP962,945 net per month. Managers (high-income earners) in Chile earn an average income of CLP2,558,421, while retail workers (low-income earners) earn a median income of CLP529,223. Regional average salaries across Chile differ as follows:

• Antofagasta: CLP1,196,754
• Metropolitana: CLP1,102,043
• Magallanes: CLP1,074,556

A foreign company hiring in Chile may encounter a different compensation dynamic than local employers. When hiring employees in sales, technology, engineering or another competitive market in Chile, salaries are more likely to reflect international market rates.

Gratification payment

In Chile, employers do not make a mandatory 13th/14th salary payment to workers; rather, they provide a statutory profit-sharing payment (Gratificación Legal). Articles 47 & 50 of the Chilean Labor Code mandate this payment, and the actual amount payable depends on the specific profit-sharing/bonus system agreed in each company. This can be paid monthly (Article 50) or annually (Article 47).

Social security contributions

Employers in Chile contribute a certain percentage of the employee’s gross remuneration towards social security benefits. An upper yearly income limit applies for several of these contributions. The Organization for Economic Cooperation and Development (OECD) provides the following guidelines:

Contribution	Percentage of gross income	Upper income limit	Notes
Occupational accident and disease insurance	0.9% - 3.4%	-	-
Unemployment insurance	2.4%	CLP 62 554 668 (UF 1582.7)	Indefinite-term contract. 3% for fixed-term contracts.
Disability and survivor’s insurance	1.58%	CLP 41 642 434 (UF 1053.6)	-
Fondo SANNA	0.03%	-	Insurance for working parents who have a child with a serious medical condition
Heavy-work pension contribution	1% - 2%	CLP 41 642 434 (UF 1053.6)	Risk dependent

The UF affects statutory contributions

Chile uses the Unidad de Fomento (UF), an inflation-indexed monetary value which affects the calculation of social security contributions. The statutory contribution cost is therefore not about a fixed percentage of salary. Some contributions incorporate the UF. As a result, the employer’s contribution can vary slightly from month to month, even when the employee’s salary stays the same.

Statutory benefits

Chilean labor laws provide several mandatory employee benefits given to most workers, whether local or foreign. Managers and executives may be exempt from maximum working hours but still receive standard worker protections. Independent contractors are excluded from mandatory benefits.

Statutory benefit	What employers need to know
Working hours	Law No. 21,561: 42 hours as of April 2026 40 hours as of April 2028
Public and regional holidays	16 public holidays plus regional holidays
Overtime	150% of the regular hourly rate An employee is entitled to earn overtime in Chile, even without a formal written agreement, as long as they can prove they worked outside their regular hours.
Annual leave	15 days after one year with the same employer. 10 days must be taken consecutively. Aysén and Magallanes: 20 days after one year with the same employer.
After 10 years with the same employer, leave entitlement increases.
Sick leave	A doctor's note is required within 2 working days. Under 11 days: Pay only starts on the 4th day. Over 11 days: Pay starts from the 1st day and covers the entire period. The state health fund or private health insurance pays sick leave.
Maternity leave	Prenatal: 6 weeks
Postnatal: 12 weeks. Once this passes, the mother can choose to extend for a further 12 weeks (full-time) or 18 weeks (part-time)
Paternity leave	5 days paid leave, taken at once or spread over the first month after birth.
Severance pay	Under Article 161 of the Chilean Labor Code, severance is given to employees who are dismissed for ‘company reasons’.
One month’s salary for every year of service, capped at 330 days or 11 months of pay.

Employment cost calculator

What hiring in Chile really looks like

While hiring in Chile is less common than in Brazil, Mexico or Colombia, it is still a good economic choice for international employers. Hiring in Chile is relatively easy, but employment regulations remain highly protective of workers’ rights.

Chile has a much smaller talent pool than other LatAm countries (especially those closer to the American border), but Chilean employees are known for being hardworking, which appeals to Western markets. EOR services in Chile have few restrictions on placing workers onsite or hiring remote workers, but restrictions may apply to hiring foreign workers if the company has more than 25 employees.

Spanish remains the predominant language in Chile, and only a small percentage of the citizens speak English. English is mostly spoken by foreign nationals working in the country, and these workers are concentrated in major hubs like Santiago, Las Condes, Providencia, and Vitacura.

Currently, Chile is considered one of the most stable and economically viable choices for entry into Latin America, if employers are willing to navigate through local labor regulations.

Immigration of foreign workers to Chile

Hiring foreign nationals in Chile requires advance planning. This is because of the processing timelines for work permits and visas. When relocating an employee to the country, you will need around 6 months for the candidate to receive final authorization. Immigration quotas also apply when the company has more than 25 employees. In this case, 85% of workers must be local and 15% can be expats.

The primary route for securing entry into Chile is the Temporary Residence Visa. This visa has several sub-categories, and an EOR provider can sponsor eligible employees, manage employment contracts and submit documentation required by Chile’s national immigration agency (Servicio Nacional de Migraciones).

Where compliance can be challenging in Chile

Rivermate is responsible for ensuring full compliance with Chilean law, but international companies would benefit from understanding how these laws are applied in practice.

Overtime payments

According to Article 30 of the Labor Code, overtime is defined as work exceeding the maximum legal working hours (42 hours per week). Overtime may be agreed upon for temporary business reasons, and it is good practice to put such agreements in writing. However, under Chile’s labor law, any hours worked beyond regular working hours are considered overtime and must be paid as such, even without a written arrangement.

Terminations

Terminations are straightforward when employers follow the statutory process under local labor laws. However, this process takes time because there are set notice periods, and when there is a ‘no-fault’ dismissal on the part of the employee, severance payments are required. Employers have 10 days to pay the final settlement after the employee’s last day.

The standard notice period is 30 days, but you can also pay the employee 30 days' salary in lieu of notice.

Employment contracts

Employment contracts take three forms in Chile: indefinite, fixed-term or part-time. They must be written in Spanish, but bilingual versions are also allowed, as long as the Spanish version prevails. A written contract is mandatory and must be signed before the first day of employment. Chilean law does not formally recognize probation periods; therefore, employment protections apply from Day 1 and probation periods are not included in contracts.

How an Employer of Record can help you in Chile

Hiring through an Employer of Record, like Rivermate, is a strong option if you don't want to establish your own local entity in Chile or handle the compliance burden. For most local hires, we can onboard your employee within nine days, sometimes less depending on whether we receive all the required documentation. If your needs fall into one or more of these categories, you will benefit from our services:

• Startups that need to enter the Chilean market quickly without the costs of establishing a legal entity.
• Companies relocating key talent to Chile.
• Businesses testing the Chilean market or wanting to hire a single remote employee.

Ready to hire in Chile?

Finding the right talent is only the first step in hiring. Rivermate can manage payroll, income tax withholding, benefits administration and Chilean labor compliance for you.

Talk to a Chilean Hiring Expert

Sources:

Average Salary in Chile: $817/mo + Min Wage (2026)
https://kpmg.com/xx/en/our-insights/gms-flash-alert/2026/flash-alert-2026-187.html
Chile Personal Income Tax Rates (2026) — TaxAtlas
Chile: Taxing Wages 2026 | OECD
dt.gob.cl/portal/1628/w3-article-60151.html