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Employer of Record (EOR) in ClChile






Country Capital



Chilean peso (CLP)

G-P’s employer of record (EOR) model allows your company to start hiring talent in minutes via our global entity infrastructure. Unlike a Professional Employer Organization (PEO), G-P allows your company to expand your global footprint without the hassle of entity setup and management.

Our global employment products, including G-P Meridian Prime™ and G-P Meridian Core™, are backed by the largest team of HR and legal experts in the industry. We handle the growing complexities of compliant global expansion — so you can focus on opportunities ahead.

As a global EOR expert, we manage payroll, employment contract best practices, statutory and market norm benefits, employee expenses, as well as severance and termination. You’ll have peace of mind knowing you have a team of dedicated employment experts assisting with every hire. G-P allows you to harness the talent of the brightest people in 180+ countries around the world, quickly and easily.

Hiring in Chile

When extending an offer letter to a candidate in Chile, carefully state whether the offer is a gross or net annual salary. In Chile, it is common practice to negotiate salaries in NET monthly terms and the candidate is likely to interpret the offer as a NET salary payment rather than gross unless carefully stated otherwise.

When negotiating terms of an employment contract and offer letter with an employee in Chile, it may be useful to keep the following in mind.

Employment contracts in Chile

It is best practice to put a strong written employment contract in place in Chile, in the local language, which clearly states the terms of the employee’s compensation, benefits, and termination requirements. An offer letter and employment contract in Chile should always state the salary and any compensation amounts in pesos rather than another currency.

Working hours in Chile

The Chile workweek is 45 hours and 9 hours on daily basis. As general rule, the work shift is from Monday to Friday, from 9 a.m. to 7 p.m., with 1 hour for a meal break.

According to the law, an employee is entitled to a 12-hour break between 2 working days, a day of rest per week (preferably on Sundays), and a 1-hour meal break per working day. Even for employees who are not subject to time control, respecting the break of 12 hours and a day of rest per week is mandatory.

If employees in Chile with contracts subject to certain working hours and time control work overtime, as a general rule, they are entitled to an additional payment of 1.5 times their regular hourly salary. Overtime hours should not exceed more than 10 per week, or 2 hours per day.

Holidays in Chile

The following national holidays are celebrated in Chile:

  • New Year’s Day
  • Good Friday
  • Holy Saturday
  • Labor Day
  • Navy Day
  • Battle of Arica
  • Saint Peter and Saint Paul
  • Our Lady of Mount Carmel
  • Assumption of Mary
  • Independence Day in Chile
  • Army Day
  • Discovery of Two Worlds Day (Columbus Day)
  • Reformation day
  • All Saints’ Day
  • Immaculate Conception
  • Christmas Day

In certain cases, when a holiday falls on a weekend, the government in Chile may decide to extend the holiday to either the Friday or Monday.

Vacation days in Chile

Employees with more than 1 year of service have a right to 15 paid working days per year of annual vacation.  Ten days can typically be taken consecutively, and the remaining 5 as agreed by the employee and employer. Vacation time can be accrued for up to 2 consecutive years. Most employers give the statutory minimum vacation days.

In addition, after the first 10 years of work for one or more employers, annual leave is increased by 1 day for every 3 years worked at the same employer.

Chile sick leave

Employees are entitled to sick leave if supported by a medical certificate that is given to the employer within 2 working days from the date of beginning of the sick leave. The employer then has 3 working days to forward the medical leave certificate to the health insurance institution (Isapre or Fonasa) who pays for the sick leave, which may be subject to caps.

  1. 3 days or less of sick leave: Employees are not entitled to sick pay.
  2. Between 4 and 10 days of sick leave: Employees are entitled to sick pay.
  3. Greater than 10 days of sick leave: Employees are entitled to sick pay for all working days during the sick leave period.

Maternity/paternity leave in Chile

In general, employees are entitled to 6 weeks of maternity leave before childbirth and 12 weeks after childbirth. In addition, parental leave may be granted, at the choice of the new mother, under any of the following options: (a) a 12-week leave following the expiration of maternity leave or (b) 18 weeks of half-day work following the expiration of maternity leave.

Employees are entitled to a subsidy during leave. This is generally less than the employee’s salary and companies will often make up the difference. The employee’s job is protected for 1 year after maternity leave ends.

Fathers are entitled to 5 continuous working days of paternity leave to be used when they want after the child is born. Fathers can also share the parental leave up to 6 weeks of full-time leave or 12 weeks of part-time leave.

Health insurance in Chile

Employees must pay into a private health insurance scheme known as “Isapres.”  Any additional amount offered towards health insurance is considered supplemental and comes out of the employee’s net salary after tax. The employer can decide whether or not it wants to compensate the employee via a taxable bonus for this difference.

The amount for this additional taxable health insurance bonus would be approximately CLP 100,000 to help cover the out-of-pocket expense for the employee’s additional private health insurance cost. This is considered an excellent supplementary benefit.

Chile supplementary benefits

Life insurance: There is no obligatory withholding that covers a concept of life insurance (in case of an employee’s death, the next of kin has access to their pension fund, but this is not a life insurance policy, per se).  In some cases, employers may decide to provide a benefit amounting to life insurance covering 2 years’ pay. If a company has a global umbrella coverage that can be extended to international team members, this may be the best way to provide this benefit. Alternatively, a taxable cash allowance can be negotiated for the employee to purchase their own coverage.

Allowances: Car allowances are not common in Chile, except for executive level positions and for employees required to use their personal cars for business. Company cars cannot be provided to employees without a significant tax penalty.

A monthly commuting allowance subject to certain limits depending on the gross salary is another way to offer tax-advantaged compensation to employees who commute to work.


The bonus/commission target amounts should be agreed with the candidate and stated in local currency — CLP.

Legal gratification in Chile: Employees are entitled to an annual “legal gratification” of 25% of the annual salary typically paid monthly, limited to 4.75 minimum monthly wages. The amount changes when an increase to the minimum wage is announced. The base salary specified in the work contract can be lowered in order to take into consideration the fact that legal gratification must be added, so that the total cost to the company is not increased. Once a base salary is stipulated and agreed to with the employee, it cannot be lowered without the employee’s consent.

Aguinaldos (13th-month payment in Chile): While not required, it is customary to pay aguinaldos, twice a year — once during Chile’s Independence Day holidays (Sep. 18) and another at year-end (around the holidays). Amounts depend on the level of the employee. G-P recommends not negotiating this with the candidate as the amounts are typically nominal and inconsequential.

Termination/severance in Chile

In case of termination without cause, due to redundancy, or company need, an employee is required to be provided with 1 month of notice by law.  In most cases, this month of notice is paid as opposed to asking the employee to work for 1 month after being served notice.

Termination of employment regulations: In Chile, companies may terminate employment for the following reasons:

  • Mutual agreement
  • Force majeure (e.g. an unexpected event, for example, a natural disaster)
  • The employee’s death
  • The expiration of an agreed upon term or duration of employment
  • Resignation by the employee
  • Company needs/company reorganization
  • Dismissal due to breach of contract or other serious issue (must be proven by the employer)

Employers can be liable for attorney’s fees and costs and other damages in cases of wrongful termination.

Termination payments in Chile:

The following payments are required in Chile when terminating an employee:

  • Wages in Lieu of notice
  • Pending vacation days
  • Severance, if the termination is due to redundancy or business need and tenure is 1+ years
  • Wages, commissions, bonuses that are outstanding
  • Severance Payment and Long Service Payment:

Severance payment and long service payment in Chile: In the event that an employee is terminated due to redundancy or business need, they are entitled to legal severance of 1 month of gross salary for every year worked, up to a total of 11 years.  After one year, the employee accumulates an additional month of severance once they have worked for at least half of the following year.  For example, an employee who is fired after having worked 1 year and 5 months is due one month of severance + 1 month notice + unused vacation.

Employee resignation in Chile: In the event of a resignation, the employee should present their employer with the resignation letter as soon as the decision to resign is made, indicating the final day. This resignation letter must be granted before a public notary or electronically in the labor authority website.

Paying taxes in Chile

When budgeting for payroll in Chile, assume that most social security costs are withheld from the employee rather than paid by the employer. Employer taxes on top of labor costs are quite reasonable for employers in Chile.

Employees are required to contribute a portion of their earnings to a:

  • Pension fund (10% of salary)
  • Health insurance plan (7%)
  • Life insurance plan (2.84% to 3.4%)
  • Unemployment insurance plan (0.6%)

Employers must contribute to funds for work-related accidents and illnesses and the unemployment insurance plan. This can range from 0.9% to 4.4% of payroll, depending on the company’s industry.

Employers must also contribute 2.4% of payroll to the unemployment fund.

Why G-P?

At G-P, we help companies unlock the power of the everywhere workforce through our industry-leading Global Growth Platform™. Let us handle the complex and costly tasks involved in finding, hiring, onboarding, and paying your team members, anywhere in the world, with the speed and guaranteed global compliance your business needs.

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THIS CONTENT IS FOR INFORMATIONAL PURPOSES ONLY AND DOES NOT CONSTITUTE LEGAL OR TAX ADVICE. You should always consult with and rely on your own legal and/or tax advisor(s). G-P does not provide legal or tax advice. The information is general and not tailored to a specific company or workforce and does not reflect G-P’s product delivery in any given jurisdiction. G-P makes no representations or warranties concerning the accuracy, completeness, or timeliness of this information and shall have no liability arising out of or in connection with it, including any loss caused by use of, or reliance on, the information.

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