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Chile 2022
Day Date Holiday Notes
Saturday Jan-1 New Year's Day
Friday Apr-15 Good Friday
Saturday Apr-16 Holy Saturday
Sunday May-1 Labor Day
Saturday May-21 Navy Day
Tuesday Jun-21 Indigenous People's day
Monday Jun-27 Saint Peter and Saint Paul
Saturday Jul-16 Our Lady of Mount Carmel
Monday Aug-15 Assumption of Mary
Sunday Sep-18 National Holiday
Monday Sep-19 Army Day
Monday Oct-10 Columbus Day
Monday Oct-31 Reformation Day
Tuesday Nov-1 All Saints' Day
Thursday Dec-8 Feast of the Immaculate Conception
Sunday Dec-25 Christmas Day
Countrypedia

Chile
Payroll and Benefits Guide

Last updated: Apr 10, 2022
Currency
Chilean Peso (CLP)
Payroll Frequency
Monthly
Employer Taxes
4.39%

Papaya Offers Complete Payroll, PEO and Contractor Management Services For Chile

Overview

Capital
Santiago
Currency
Chilean Peso (CLP)
Date Format
dd/mm/yyyy
Fiscal Year
1 January- 31 December
Public holidays calendar

Contributions

Employer

Employer Payroll Contributions

2.40%

Unemployment

1.99%

Disability and Survival Insurance (SIS)

4.39% Total Employment Cost

Employee

Employee Payroll Contributions

10.0%

Pension

0.60%

Unemployment Insurance

7.00%

Health Plan

17.60% Total Employee Cost

Employee Income Tax

*1 Monthly Tax Unit = approximately 51,500 CLP

0.00%

Up to 13.5 Monthly Tax Units

4.00%

13.5 – 30 Monthly Tax Units

8.00%

30 – 50 Monthly Tax Units

13.50%

50 – 70 Monthly Tax Units

23.00%

70 – 90 Monthly Tax Units

30.40%

90 – 120 Monthly Tax Units

35.00%

120 – 310 Monthly Tax Units

40.00%

310 + Monthly Tax Units

Minimum Wage

General

The monthly minimum wage in Chile is 350,000 CLP for employees over the age of 18 and under 65.  For employees under the age of 18, and over 65, the monthly minimum wage is 261,092 CLP.

Payroll

Payroll Cycle

Monthly

13th Salary

There are no provisions in the law regarding 13th salaries.

Working Hours

General

A full workweek in Chile is 45 hours.  The employer has the right to extend the day by no more than 2 hours a day, or 10 hours a week. The Chilean Labour Code recommends daily rest periods, a midday meal (as part of a break for at least half an hour), and a weekly rest day on Sundays and national holidays.  

Employees delivering services providing technical support, working in public shops or within the entertainment business, and therefore, required to work on Sundays and national holidays, are provided with rest days on different days. 

Overtime

Overtime is paid at a rate of 150% of the regular pay.   

Working Week

Monday-Friday/Monday-Saturday

Leave

Paid Time Off

Employees who have been employed for at least 1 year are entitled to 15 working days paid leave.   

Public Holidays

There are 16 public holidays in Chile.

Sick Days

In Chile, employees are entitled to sick leave if they can provide a medical certificate within 2 days from the beginning of the leave.  The employer must then forward the certificate to the health insurance within 3 days.   

  • For the first 3 days of sick leave, the employee is not entitled to pay  
  • From the 4th day on, employees are entitled to sick pay, however, it may be subject to a cap.   

Maternity Leave

In Chile, the woman is entitled to 30 weeks of paid maternity leave, divided by 6 weeks before the birth and 24 weeks after, and is paid 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

Fathers are entitled to 5 days of paid paternity leave.

After the 7th week of birth, the mother can opt 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.

Other Leave

Bereavement Leave- If a member of the employee’s immediate family passes away, the employee is entitled to 3 days of paid leave. 

Termination

Termination Process

In order to terminate an employee, the cause must first be decided.  By law, the following reasons are valid reasons for termination:

  • Mutual agreement, resignation, or expiration of a contract
  • Breach of contract (employer must be able to provide proof)
  • Company needs or reorganization (the most common reason for the dismissal of an employee)

The employer must prepare a letter for the employee stating the cause for termination as well as the effective date and it must be signed in person by the employee or sent by certified mail to their home address.  In addition, the same letter must be filed with the Chilean Labor Ministry.  It is common that the employee is notified on the last day or work.

After the termination letter is given, the employer must prepare a severance agreement which must include the cause for termination as well as the amount that will be paid out to the employee.  The severance agreement must be signed within 10 days of the termination.

In the case of a mutual agreement, both parties must 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 following the termination date.

Notice Period

The notice period is 1 month by law.  It is common that the notice period is waived and payment is made in lieu.

Severance Pay

If the employee has completed at least 1 year of employment, they are entitled to severance pay.  For every year of service up to 11 years, the employee is entitled to 1 month’s salary. In addition, after one year of employment, the employee accumulates an additional month of severance pay if they have worked for at least half of the following year.

Probation Period

12 months

VISA

VISA

Anyone who comes to Chile with the intention to work, even if they don’t require a visa to enter, must receive a work visa.

There are two kinds of work visas available to foreigners:

Visa Subject to a Contract – for candidates who have secured an employment contract prior to arriving in Chile. It is valid for 2 years and can be renewed for an additional 2 years. After that, a candidate needs to a apply for permanent resident status, which would allow the candidate to continue to work in Chile.

The process requires about 20-30 days to complete. The application should be filed 30-60 days before the expected arrival.

To get the permit, the hiring company must be incorporated in Chile, demonstrate that the hiring will help Chile, and have their VAT and employee insurance paid for the past 3 months.

Working Holiday Visa

People from Colombia, Mexico, Peru, Germany, Canada, Australia, Czech Republic, and New Zealand who are between the ages of 18 and 35 can apply for a 1-year visa that allows them to work in Chile. The visa cannot be renewed.

VAT

General

19% standard rate.

Version History

April 10, 2022
The monthly minimum wage in Chile is now 350,000 CLP for employees over the age of 18 and under 65.
November 26, 2020
Minimum wage: raised to 326,500 (from 320,500)
Stay up to date on payroll & employment law changes

Questions & Answers

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Sila P.
Sila P.
2 months ago

Do all employees receive the new basic food basket contribution?

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