|Payroll Frequency||All companies have their own payroll and benefit structure. Payments however must be made at least monthly|
|VAT||19% standard rate|
Employer of record Services
TopSource offers complete payroll, EOR and contractor management services for Chile. TopSource provides Employer of Record services to global companies establishing a presence in Chile that do not wish to be burdened with the complications of Chile employment regulations.
TopSource serves as an outsourced Global Employment Solutions provider. We provide comprehensive employment services such as payroll, payroll related compliances, leave and attendance administration, HR management, and assistance with employer compliances.
If you have an established presence in Chile, our payroll bureau services are available. But if you are seeking to avoid the complications of a subsidiary—or wish to establish a presence quickly an convert to a subsidiary later—our EOR service is ready to support you today.
Services we offer
|• Payroll bureau solutions for your Chile entity|
|• Employment solutions/leasing||• Providing documents associated with employment|
|• Employee on-boarding process and documentation||• Monthly salary calculation|
|• Salary disbursement to employee’s account||• Pay slip generation (If applicable)|
|• Employee statutory benefits administration and deduction|
|• Foreign exchange and money transfer services for payment of employees and 3rd parties|
Company formation in Chile
We can help with company registration, company incorporation along with all the necessary documentation in Chile. We can also assist foreign companies to smoothly setup a company anywhere in Chile.
- Minimum Wage
Minimum wage in Chile 301,000 CLP/month
Employer Payroll Tax 2.40% – Unemployment Insurance 0.95% – Occupational Accident 3.35% – Total Employment Cost Employee Payroll Taxes 10.00% – Pension Plan 0.60% – Unemployment Insurance 7.00% – Health Plan 17.60% – Total Employee Cost Employee Income Tax 0.00% 634,756.50 4.00% 634,756.5 – 1,410,570 8.00% 1,410,570 – 2,350,950 13.50% 2,350,950 – 3,291,330 23.00% 3,291,330 – 4,231,710 30.40% 4,231,710 – 5,642,280 35.00% 5,642,280 +
Working HoursA standard, full time work week in Chile is considered 45 hours. The employer is not permitted to increase the hours by any more than 2 hours per day or 10 hours per week.
Overtime – It is calculated at 150% of normal hourly wages
Health InsuranceIn Chile, the employee has to make compulsory contributions to a private health insurance scheme called “Isapres” with a cap of 2,200,000 CLP per month. If more contributions are made over and above this, it will be considered supplemental and will be taken from the employee’s net salary after tax.
Maternity LeaveMothers can have up to 30 weeks of paid maternity leave, divided by 6 weeks before the birth and 24 weeks after the funds are covered by health insurance.
During the pregnancy, the woman is not required to participate in activities that would endanger her health (i.e. heavy lifting). If this is a requirement of the job, the employer must reassign her to a different position during her pregnancy without pay reduction.
Paternity Leave/Parental LeaveFathers can take up to 5 days of paid paternity leave.
The mother has the option, 7 weeks after the birth, to transfer some or all of her maternity leave to the father.
Parental Leave – Female employees are entitled to 10 days of parental leave for a child under the age of 18. While the employee is entitled to be paid, they must make up the time taken off at a later date.
Social SecurityEmployees are required to contribute a minimum of 17.6% of their salary and employers have to contribute a minimum of 3.35%.
Pension FundIn Chile, 10% of the gross salary is automatically deducted from the employee for their pension, it is not compulsory for the employer to make any contributions.
Unemployment InsuranceWhen employment is terminated the employee has the option to withdraw any contributions that they have made towards unemployment insurance.
Annual Holiday LeaveEmployees with more than one year of service are entitled to 15 days paid holiday.
Termination ProcessWhen an employer wants to terminate employment of an employee they must have one of the following valid reasons:
• Mutual agreement, resignation, or expiration of a contract
• Breach of contract (employer must be able to provide proof)
• Company needs or reorganization (most common reason for the dismissal of an employee)
The employer must issue a letter to give to the employee stating the cause for termination as well as the date of termination and it must either be signed in person by the employee or sent by certified mail to their home address. This letter has to then be filed with the Chilean Labour Ministry.
After this letter has been issued to the employee the employer is required to prepare an agreement that stipulates the cause of termination and what severance amount will be paid to the employee, this agreement has to be signed within 10 days of termination.
In the case of a mutual agreement, the employer and the employee have to both sign a document acknowledging that both parties have agreed that the employment contract is terminated. A severance agreement must also be signed within the first 1-2 weeks of the the termination date.
Severance Pay/Notice PeriodIf the employee has completed at least 1 year of employment, they are entitled to severance pay. For every year of service, capped at 11 years, the employee is entitled to 1 month’s salary. If the employee has been employed for over one year they only need to have worked up to six months of the following year to qualify to receive an additional month of severance pay.
Notice period – It is 1 month by law although commonly the notice period is waived and payment is made in lieu.