Payroll and Benefits Guide Argentina

Employer

Employer Payroll Contributions

Employee

Employee Payroll Contributions

Employee

Employee Income Tax

General

The national minimum wage is 112,500 ARS.

Payroll Cycle

Payment is dependent on the type of contract in place and per Sections 126 and 128 of the Argentina Employment Contract Law. Payments are made as follows:

• Monthly employees are to be paid at the end of each calendar month
• Employees with daily or hourly wages must be paid weekly or bi-weekly
• Personnel who are paid per project must be paid weekly or bi-weekly

Payments must be made within four working days for monthly or bi-weekly employees and three working days for weekly employees.

13th Salary
Argentinian local law states employees are entitled to receive an additional month’s salary, a 13th month salary: Aguinaldo. This 13th-month salary is payable in two semi-annual installments, which are due for payment before June 30th and December 18th, respectively.
The amount of each installment is equal to 50.00% of the highest monthly wage received during the previous 6-month period.

General

In Argentina, The Employment Contract Law states that working hours shall not exceed 8 hours per day and 48 hours per week excluding rest time. However, laws associated with work considered unhealthy or with night shifts (9 pm – 6 am) limit employees to 7 hours of work.

Overtime

Overtime hours must not exceed 3 hours per day, 30 hours per month, or 200 hours per year unless prior authorization from the relevant labor authority has been agreed.
Overtime worked on weekdays is paid at an additional 50% of the salary, whereas overtime worked on a Saturday afternoon, Sunday, or public holiday would be paid at double the salary.

Working Week

The typical working week is from Monday to Friday

Paid Time Off

Employees who have worked for an employer for more than six months are entitled to 2 weeks (14 calendar days) of annual leave. The amount of holiday entitlement increases with the length of continuous employment, up to a maximum of 35 calendar days.

New employees are entitled to 1 day of leave for every 20 days worked.
The entitled paid vacation for employees in Argentina is dependent on their time with the employer:

• Employees who have worked for the same employer for less than five years are entitled to 14 calendar days leave
• Employees who have worked for the same employer for 5–10 years are entitled to 21 calendar days leave
• Employees who have worked for the same employer for 10–20 years are entitled to 28 calendar days leave
• Employees who have worked for the same employer for more than 20 years are entitled to 35 calendar days leave

During annual leave, the employer must pay the employee full salary as well as any other entitled benefits. Annual leave is calculated by dividing the salary payment by 25 and multiplying it by the number of days of holiday to which the employee is entitled.

Public Holidays

There are 18 national holidays. Holidays that fall at the end of the week are moved to the following Monday.

Sick Days

If an employee has worked for a company for less than five years, they are entitled to a maximum of 3 months of paid sick leave. Once they have worked for a company for more than five years, the paid sick leave is extended to 6 months.
The employer covers the payment of sick pay, however, the Employment Risk Insurance (which is compulsory insurance for employers) covers any treatment, sick pay, or rehabilitation for a work-related accident, injury, or illness.

Maternity Leave

Maternity leave is 90 days of which the mother must take at least 30 days before the birth of the child. Commonly, the leave is split 45 days on either side of the delivery.
The Argentine Social Security system pays maternity leave.

Paternity Leave

New fathers are entitled to 2 days of paid paternity leave.

Parental Leave

There are no provisions for Parental leave in Argentina.

Other Leave

Employees also receive paid leave under the following circumstances:

• An employee is entitled to 10 days’ leave for their marriage
• An employee is entitled to 3 days’ leave for the death of a child, parent, or spouse and one day’s leave for the death of a sibling

An employee is entitled to two days’ leave (at any one time, with a maximum of 10 days) for university or high school exams

Termination Process

The employer must justify any termination with notice unless it is through mutual agreement, the employee’s failure to fulfill their work requirements, severe misconduct, or economic factors.

Notice Period

Employees who have worked for the same company for more than three months but less than five years must provide one month’s notice.
Employees who have worked for the same company for more than five years must provide two months’ notice.

Severance Pay

An employee who is dismissed without reasonable cause is entitled to statutory severance of 1 month’s salary for each year of service, or period longer than 3 months. This amount is calculated using the employee’s highest monthly, regular compensation received in the last 12 months of work.

This baseline cannot be more than 3 times the monthly payment, which is the average of all compensation set out in the applicable CBA at the time of the dismissal. This average is periodically published.

If the employee is not subject to a CBA (typically senior employees), the limits applicable to the activity in which they perform duties still apply. In no case will the amount of the compensation payable be less than 1 month of salary.

Currently in the Vizotti case, the Supreme Court of Justice has raised the basis for calculating compensation subject to a limit, establishing that it will be 67% of the employee’s monthly and usual compensation, the amount to be multiplied by the employee’s years of service based on constitutional reasons and in cases where the application of the legal limit imposes a reduction to the severance payment of more than 33%.

This severance payment may be reduced or increased in other types of termination (e.g., force majeure and lack or reduction of work, death of the employee, employer bankruptcy, employee retirement, employee illness, or employee pregnancy).

Further, on December 13, 2019, the administration enacted Decree No. 34/2019 to protect the employment market. Specifically, it implemented double compensation in the event of dismissal without cause, which is effective until June 2022. Recently, by means of Decree No. 886/2021, the national government increased severance based on the timing of the dismissal, as follows:

(i) Severance payment will be increased by 75% if the dismissal occurs between January 2022 and February 2022 (ii) Will be increased by 50% if the dismissal occurs between March 2022 and April 2022, and (iii) by 25% if the dismissal occurs between May 2022 and June 2022.

This regime applies to those employees who were employed on or before December 13, 2019, and are dismissed without cause between December 14, 2019, and June 30, 2022. In case of dismissal without cause during the employment emergency period, the dismissed employee is entitled to receive an increased severance payment in accordance with the current legislation, covering all the compensatory items originated by such wrongful termination.

Probation Period

The Probation period in Argentina is three months.
During the first three months of employment, should the employer or the employee decide to terminate the contract without cause, the employer has no obligation to pay severance but must notify the employee of the termination 15 days in advance.

General

• Gym Allowance – 5,000 to  7,000 ARS monthly.
• Meal Vouchers – 6,000 ARS monthly.
• Transportation Allowance – 200 to 300 ARS per day, depending on distance between workers home and office.
• Internet Allowance – 2,500 ARS monthly.
• Mobile Allowance –  3,000 ARS monthly.
• Private Health Insurance – 10.000 to 12.000 ARS monthly for employee-only cover. The age, extent of cover, and medical history can also impact the cost.

VISA

There are three categories of residence for Argentina: transitory, temporary, and permanent residence.

• The transitory residence is generally for individuals living in Argentina for less than three months and does not allow work except for technical residents.

• Technical Residency is granted to foreigners who perform technical or professional activities. Individuals can obtain this residency at the Argentinean Consulate in their  home country/territory or after arriving  as a tourist.
• Business residency is issued to foreigners who have been invited by a company that is established in Argentina. The Individual can request this residency at the Argentinean Consulate of the foreigners’ home country/territory only. This type of residence is for business use; it is a 60-day residency, extended upon the Immigration Office’s discretion.

Temporary Residency is for foreigners who want to live in the country/territory for an extended period. They can work, study, live, etc.  A Work Residence is the residence type applied to foreigners employed by a local company long term. The Work Residence is  valid for one year, and this can be extended indefinitely.

Permanent Residence is for those foreigners who want to live in the country/territory permanently.

General

The rate of VAT in Argentina is 21%.