Setting up and running a Paraguay payroll
If you are planning a Paraguay expansion one of the first steps is likely to be setting up a Paraguayan entity and hiring a local workforce. While this is possible to do independently, it can be difficult to understand and follow the country’s unique employment laws and overcome language barriers, which can cause unexpected delays to expansion.
At Horizons, we specialize in helping organizations of all kinds expand internationally, including into Paraguay. We will handle your payroll setup and ongoing management, whether or not you already have a registered in the country.
Why choose the Horizons payroll solution?
If you have an entity
For organizations that have already established an official entity in Paraguay, we offer a comprehensive and tailored payroll outsourcing service. Our expert team will set up and manage your payroll, also handling all of your associated administration, HR, and compliance with local regulations.
This service is ideally suited to larger organizations and those expanding into Paraguay in the long-term.
If you don’t have an entity
If you have not already officially registered an entity in Paraguay, then you can outsource your payroll setup and management to Horizons, making use of our established Paraguay subsidiary to act as employer of record.
This option is well suited to organizations looking for a quick, low-risk, and flexible route into Paraguayan hiring and expansion.
How Horizons can help you build a presence in Paraguay
Paraguay payroll guide
Taxes and withholdings in Paraguay
Employers and employees in Paraguay are required to pay a percentage of salaries to social security at rates of 16.5% and 9% respectively. Income tax is on a Pay As You Earn system, meaning employers must withhold it before paying salaries.
Income tax is generally charged at 10%.
Paraguay entitlements and terminations
In general, employees in Paraguay are entitled to between one and three months of notice prior to termination, with the exact length depending on their length of service with the employer. Severance payments may also be required and are usually paid at a rate of 15 days of normal salary per year of service. Probation periods are limited to three months.
How to establish a Paraguay payroll
If you want to hire and set up payroll in Paraguay, we recommend establishing a Paraguayan entity first. However, tackling this independently can be complicated, possibly leading to delays and impacting your profits.
Alternatively, Horizons can simplify your entire employment and payroll process, helping you get up and running in Paraguay in a matter of days. Our employer or record service means that you can even benefit from our solutions if you don’t have a registered entity in Paraguay, using our Paraguay subsidiary as employer of record for your workforce.