If you are hiring employees in Paraguay, it’s essential to create a strong compensation and benefits plan. Employees may choose one position over another because of the salary and benefits, so your company needs to build a competitive offering to stand out.
Paraguay compensation laws
Paraguay’s compensation laws include a minimum wage of PYG 2,680.37 per month. The minimum wage last changed in 2023, and the government could decide to update the wage again in the coming years.
All employees should receive an additional annual compensation or 13th-month salary, equal to 1-month’s salary, which must be paid before December 31 of each year.
Guaranteed benefits in Paraguay
When you start putting together your Paraguay benefits management plan, you must include statutory benefits required by law. Paraguay has several national holidays, and employees must get those days off with pay. Typically, employees start earning vacation days after 1 year of employment. For example, they’ll get 12 days of paid annual leave if they’ve worked 1 to 5 years, 18 days for 5 to 10 years, and 30 days for 10 years or more of employment.
Paraguay offers sick leave, maternity leave, and paternity leave as other guaranteed benefits. Employees need to have a justified illness to take medical leave. Expecting employees should receive 18 weeks of maternity leave paid by the IPS at 100% of their normal salary. Paternity leave is 2 weeks of paid time off after the birth of a child, which employers pay for.
Paraguay benefits management
Apart from the statutory benefits, you should also offer additional benefits to encourage talent retention.
Restrictions for benefits and compensation
Companies expanding to Paraguay run into trouble trying to operate in the country without a subsidiary. You need an entity in the country to provide a Paraguay compensation and benefits management plan, but it can take months to incorporate while also learning Paraguay’s compensation laws, labor laws, and tax regulations.
Fortunately, G-P has a global entity infrastructure that can assist your company, ensuring a quick expansion without any unnecessary stress.
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