Establishing and maintaining payroll in Chile
The South American country of Chile has developed rapidly in recent decades, and it is an increasingly attractive site for foreign investment.
If you are planning a Chilean expansion, one of your first steps will be hiring a local workforce. To do this you will generally need a legal entity in the country and will need to establish an in-country payroll and employment infrastructure. This can be a long and difficult process in many cases, taking several months to complete and causing delays.
At Horizons, we specialize in helping organizations spanning all industries expand internationally, including into Chile. We can handle your payroll setup and management, even if you don’t have a legal entity in Chile.
If you have an entity
If your organization has already registered an official entity in Chile, then you can outsource your payroll setup and management to us to get expert support and to fast-track your operations.
This level of outsourcing is perfect for larger organizations that are looking to expand into Chile long term.
If you don’t have an entity
If you don’t have a registered entity in Chile, you can use our full payroll outsourcing service. Our Chilean subsidiary will act as employer of record for your employees, and our team will handle the HR, administration, and complex legal compliance work.
Choose this service for a low-risk, flexible, and scalable solution for your Chilean payroll setup and management, with all the benefits of hiring locally and none of the usual complications.
Build your business in Chile with help from Horizons
Reliable Delivery
We guarantee that all payments will be on time, your data will be secure, and you can be up and running within just 48 hours.
An Established Presence
Our in-country subsidiary will act as employer of record, offering you a presence in Chile for legal local employment.
Flexible Solutions
Our team will manage all of the admin, payroll, HR, and taxes, so you can focus on building your business in Chile.
Up-To-Date Compliance
We’ll ensure you stay fully compliant at all times with Chile’s complex business and employment legislation.
A Single Point of Contact
Our centralized service gives you a single point of contact, simplifying the entire Chile employment process.
Proven Global Expertise
Our in-house teams of payroll and HR experts have already helped all kinds of organizations expand globally.
Chile payroll guide
What withholdings and taxes are required 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 toward 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 Chile is between 0% and 35.5%, depending on income level.
Corporate tax in Chile is generally 25%.
Unemployment | 2.4% |
Occupational Accidents | 0.95% |
Total Employment Cost | 3.35% |
| Pension | 10.0% |
| Health Insurance Plan | 7.00% |
| Unemployment Insurance | 0.60% |
| Total Employee Cost | 17.60% |
0- 11.368.06 CLP | 0.00% |
11,368.06- 25,262.37 CLP | 4.00% |
25,262.37- 42,103.94 CLP | 8.00% |
42,103.94- 58,945.52 CLP | 13.50% |
58,945.52- 75,787.10 CLP | 23.00% |
75,787.10- 101,049.46 CLP | 30.40% |
101,049.46 CLP and above | 35.00% |
Entitlements and terminations
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.
How to establish a Chile payroll
For many businesses, setting up a payroll and hiring in Chile is likely to involve establishing a local entity, registering with the authorities, opening a bank account, and more. This can be complex and slow expansion progress significantly.
Another option is to outsource your payroll setup and management to Horizons. We can offer the use of our Chilean subsidiary to act as employer of record for your employees in Chile, so you can avoid the complex setup and management process, and can benefit from our solutions even if you don’t have a legal entity in Chile. Additionally, we can set up and run your payroll, HR, compliance, and any other associated work, allowing you to work on successfully expanding your businesses in Chile.
Speak to an expert today.
Your all-in-one solution for payroll outsourcing and global expansion
Horizons’ Chile payroll services help your business to quickly and compliantly begin trading in Chile, without the complex process of establishing a local entity and navigating local regulations. This can help your business to commence its Chile operations in as little as 48 hours and has the potential to cut your expansion costs by more than 80%, whether or not you already have a registered entity in the country.
Our team of Chile experts can also handle all of your company’s payroll, benefits, expenses, HR duties, and compliance work in the country. And as the only global PEO with an in-house recruitment team, Horizons can rapidly source, hire, and onboard your local staff, freeing you to focus on your successful expansion into Chile.
