Chile PEO & Employer of Record

Expand your organization into Chile with or without a Chilean entity

The South American country of Chile has developed rapidly in recent decades, and it is an increasingly attractive site for foreign investment.

If your business is planning an expansion into Chile, then you should expect things to potentially take longer than planned. While the country continues to improve its administrative processes, inefficiencies still remain which, along with the language and cultural barriers can make progress slow when trying to establish and grow a business.

At New Horizons, we help businesses from all industries to expand into Chile. Our professional employer organization (PEO), employer of record, and payroll services can provide your organization with everything you need to kickstart your Swiss in a matter of days, not weeks or months.

As the only global PEO with an in-house recruitment team, we can also take care of the sourcing, hiring, and onboarding of your Chile workforce, along with any ongoing HR and compliance work. Explore our Chile expansion services below, or get in touch with our team to let us know about your expansion goals.

Why choose New Horizons outsourcing

New Horizons enables your business to expand its operations into Chile, without setting up a legal subsidiary.

Rapid Market Entry

New Horizons will enable you to source, hire, and onboard professionals across Chile in as little as 48 hours.

Cost-Effective Expansion

Our PEO solution can help you benefit from cost savings of up to 85%, without the need to establish a Chilean entity.

Payroll Outsourcing

Simplified Chile salary & payroll processing, including social security payments, tax, and any other required contributions.

Employee Onboarding

Utilize the relevant provision for all types of Chilean labor contracts, whether a fixed-term or open-ended contract.

Onsite Legal & HR Team

Full support for Chile-specific contract renewals, terminations, annual leave management, HR, and strategic guidance.

Ensure Full Compliance

We ensure that employment contracts are fully compliant and adhere to Chile’s labor laws and best practices.

In general, employees in Chile are entitled to one month of notice prior to termination. They are usually also entitled to a severance payment of one month of salary, plus extra depending on their length of service with the employer.

Hiring in Chile: Employment law overview

📝 Employment contracts in Chile

We strongly recommend that all employers in Chile provide every employee with a written contract of employment. The contract should have all necessary details of the employment agreement such as salary, vacation leave, working hours, duties, and so on. It should also be written in the official language of Spanish and use the Chilean peso currency.

⏰ Working hours in Chile

The standard working week in Chile is 45 hours. Workers are entitled to at least one day off per week, and for most, this is Sundays. Overtime rates must be at least 150% of normal salary.

📅 Public holidays in Chile

Date
Description
1 Jan
New Year’s Day
10 Apr
Good Friday
11 Apr
Holy Saturday
1 May
Labour Day
10 May
Mother’s Day
21 May
Navy Day
21 Jun
Father’s Day
29 Jun
Saint Peter and Saint Paul
16 Jul
Our Lady of Mount Carmel
15 Aug
Assumption Day
18 Sep
Assumption Day
19 Sep
Day of the Glories of the Chilean Army
12 Oct
Race Day
25 Oct
Chilean municipal elections
31 Oct
Reformation Day
1 Nov
All Saints’ Day
8 Dec
Immaculate Conception Day
25 Dec
Christmas Day

🏖 Vacation leave in Chile

Workers in Chile with at least one year of service with their employer are entitled to a minimum of 15 days of paid vacation leave.

😷 Sick leave in Chile

Employees in Chile are entitled to paid sick leave if they present a medical note as proof of sickness. Generally, they will only be entitled to compensation for absences of more than three days.

👶 Parental leave in Chile

Female employees in Chile are usually entitled to 18 weeks of paid maternity leave, with six weeks prior to the birth and 12 weeks after. Part of their compensation is subsidized, and the employer can choose to make up the remaining salary.

Fathers can take five days of paternal leave after the birth.

It may also be possible to take additional parental leave, which can be shared between the parents.

💰 Terminations and severance in Chile

In general, employees in Chile are entitled to one month of notice prior to termination. They are usually also entitled to a severance payment of one month of salary, plus extra depending on their length of service with the employer.

🏦 Taxation and withholdings in Chile

Chile has a number of mandatory social security contributions for both employers and employees. The employee contributions are generally withheld by the employer. Employees usually need to pay the following:

  • 10% of salary to pension
  • Between 2.84% and 3.4% to life insurance
  • 7% to health insurance
  • 0.6% to unemployment insurance

Employers generally need to contribute between 0.9% and 4.4% of salaries to workplace accident insurance and unemployment insurance, as well as 2.4% to an unemployment fund.

Income tax in Chie is between 0% and 35.5%, depending on income level.

Corporate tax in Chile is generally 25%.

🏥 Health coverage in Chile

Employees have to contribute to health insurance, and these contributions are generally withheld by their employer (see above). Some employers do choose to offer additional private medical insurance as a benefit.

💳 Chile compensations & benefits

Compensation laws in Chile

The minimum wage for employees in Chile is 320,500 pesos per month for full-time workers.

Benefit management in Chile

Building a benefits system for your Chilean workforce can be difficult and complicated to navigate if you are not familiar with the country, its customs, and its employment laws. To set it up independently, it can take several weeks and potentially lead to unexpected delays.

Outsourcing your benefit management process ensures that you fully understand and adhere to the rules, ensuring your compliance and speeding up the process significantly. At New Horizons, our Chile employment experts will help you to find and arrange your benefits, advise on your strategy, and ensure compliance with the law.

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