When you employ a global workforce, you can manage their payroll in a few ways. Several of those strategies create administrative burdens for your team, and others incur high fees for a third party’s services. Plus, few solutions free your company from legal responsibility in the event of oversight or noncompliance.
At G-P, the fees we charge pay your employees’ salaries. When you outsource your global payroll to our team, we put your employees on our automated payroll and assume full liability.
Taxation Rules in Bolivia
Employers are responsible for withholding 13 percent of an employee’s monthly salary for income taxes. Other withholdings include:
- 10 percent for retirement contributions (future pension payments).
- 0.5 percent for solidarity pension contributions.
- 0.5 percent for the Pension Funds Administrators’ commission.
- 1.71 percent to pay for special insurance that covers common risks.
Employees with income that surpasses a specific amount each month are subject to an extra withholding. These contributions go toward the national solidarity pension fund system. The brackets for these payments are as follows:
- One percent of salaries between 13,000 and 25,000 BOB
- Five percent of salaries between 25,000 and 35,000 BOB
- 10 percent of salaries above 35,000 BOB
Employers must also make the following contributions without deducting the funds from workers’ incomes:
- 10 percent to the National Health Care body
- Two percent for housing
- One percent to the Institute of Professional Formation (INFOCAL)
- Three percent for the solidarity pension fund
- 1.71 percent as a professional risk premium for special insurance
Bolivia Payroll Options for Companies
Be sure to choose the best strategy for managing your global payroll. Your options include:
- Internal: The financial department at your office can handle payroll for international and local employees. This method is less expensive than others, but it adds a significant amount of extra work to your in-house staff’s list of duties.
- Remote: If you set up a separate business entity in-country, that subsidiary can manage its own payroll. This strategy is often time-consuming and expensive, though. Plus, oversights and failure to comply can result in sanctions or losing your business license.
- Bolivia payroll processing company: You can outsource your payroll for a fee. Note that your company is still liable for any legal mistakes.
- G-P: Our Employer of Record model lets us take full responsibility for managing your payroll. We ensure total compliance at all times.
How to Set Up a Payroll in Bolivia
Your company must register with the Ministry of Labour and the appropriate social security entities. When you hire new employees, you must register them for social security within five days of their start date.
As an employer, you’ll pay 13 salaries — one payment per month, plus a Christmas bonus paid at the end of the year. Companies with a gross domestic product over 4.5 must pay a second Christmas bonus.
The General Labour Law lists justifiable grounds for terminating an employment contract:
- Disclosing industry secrets
- Stealing from the workplace
- Damaging equipment, products, or tools
- Showing disregard for necessary security or hygiene
- Breach of the employment contract (partial or total)
- Theft or robbery
- Immoral or threatening conduct in the workplace
- Abandoning the workplace en masse
- Breach of internal regulations agreed to in the contract
These grounds for justified dismissal are only valid if proven by the employer.
If an employer chooses to end an employment relationship outside these grounds, they will have to pay severance. Exceptions include:
- Termination within the 90-day trial period.
- Reinstatement of the employee.
Payroll Processing Company in Bolivia
At G-P, we can handle every aspect of payroll so you don’t have to. Our Employer of Record model lets us put your global workforce on a single, compliant platform. Contact us today to learn more about our payroll outsourcing services.