Employer Record in Chile

Basic information

Capital: Santiago

Time zone: GMT-4

Languages: Spanish

Currency code:CLP

Human Resources at a Glance 

Contract Terms

Contracts must be in Spanish and can be bilingual. They must be in writing and signed by both parties. A contract must include:

• Name
• Start date
• Length of the employment
• Job description
• Remote work conditions
• Right to disconnect conditions
• Termination conditions

Guidelines Regarding Probation Period/Trial Period

There is no probation period in Chile.

Regulations and Rules Regarding Working Hours

Standard working hours are 9 hours per day, 45 hours per week. The standard workweek is from Monday to Friday.

Overtime is paid according to the following rates

According to Chilean labor law, employees working more than 45 hours per week are required to pay overtime, which is calculated as 50% of the base salary.

Minimum Wage Requirements

The national minimum wage for full-time employees in Chile is CLP 440,000.

The law establishes gradual increases over the years 2023 and 2024 to raise the minimum wage to CLP 500,000. As part of this change, on September 1, 2023, the minimum wage will increase to CLP 460,000, and finally to CLP 500,000 on July 1, 2024.

Payroll Cost for Employers

The employer cost is generally estimated between 4.91% of the employee salary.

• Legal Profit Sharing – CLP 182,092
• Work from Home Allowance – CLP 32,000
• Life Insurance – 1.58%*
• Work Accident Insurance – 0.93% up to a maximum salary for the contribution of CLP 2,941,704.48 including Legal Profit Sharing
• Unemployment Insurance – 2.4%**

*The maximum salary for the calculation of Life Insurance is CLP 2,941,704.48 including Legal Profit Sharing, and CLP 4,419,766.78 including Legal Profit Sharing for the calculation of Unemployment Insurance

**Up to a maximum salary for the contribution of CLP 4,419,766.78 (including Legal Profit Sharing)

Termination

Grounds

Terminations must respect complex rules and the rules of an employee’s employment country. The off-boarding is always handled by the Employer with the primary stakeholders. It may include ad-hoc fees as well as required or recommended steps on specific termination cases.

Terminations in Chile can be complex. There is no at-will termination in Chile for employers. Employers must ground terminations on a company-related business need.

Compliant terminations include:

• Voluntarily by the employee
• By mutual agreement
• Unilaterally by the employer based on:
  • Probation period
  • Objective grounds
  • Disciplinary dismissal
• By the expiration of the contract

After the end term, the employer must confirm in writing to the employee that the agreement won’t be renewed for fixed-term contracts.

Notice Period

The minimum notice period is 30 days. The employer can also provide payment in lieu.

Severance compensation

In Chile, all employees who are terminated due to general grounds or without notice are entitled to severance pay. Severance pay is 30 days of salary per year of service up to 330 days based compensation.

The monthly severance compensation cannot exceed a maximum of 90 UF (USD 3,500) unless the employee is dismissed without notice.

Payment & leave Compensation & Holidays

SalaryPayment

Monthly

Payslip Payroll

No explicit provision

Annual Leave

Both full-time and part-time employees are entitled to 15 working days of paid time off (PTO) a year. PTO accrues monthly 1.25 days per month. Employees are eligible for annual leave as it accrues by mutual agreement between the employer and employee

Sick Leave

Employees are entitled to unlimited paid sick leave.

The employer is not responsible for paying sick days. Payments are made by the health institution the employee has (ISAPRE or FONASA). The Chilean healthcare system requires 6 months of contribution before they will subsidize sick leave.

Sick leave is paid as follows:

• 1-3 days: 0% of salary paid to the employee, healthcare only pays the employee’s contribution to social laws.
• 4-10 days: The healthcare system pays the employee their normal salary and the employee’s contribution to social laws, discounting 3 days.
• 11+ days: The healthcare system pays the employee their normal salary and the employee’s contribution to social laws completely.

The employees salary is paid daily, calculated on the past 3 months average daily salary, with a maximum amount of 86UF monthly.

The doctor submits the medical certificate through iMed, which issues a notification to the employer. The employer has 3 days to process this leave of absence electronically. If the document could not be submitted through iMed, the employee has 48 hours to submit the document to the employer.

Maternity & Parental Leave

Pregnant employees who have contributed to Social Security for 6 months are entitled to 126 days of paid leave, broken into 2 parts. 42 days must be taken before the child’s birth (pre-birth license) and 84 days must be taken after the birth (post-birth license).

This leave is paid at 100% of the employee’s regular salary up to a cap, and Social Security will be responsible for this pay.

This leave may be extended through parental leave.

Mothers who have taken maternity leave are entitled to further parental leave. They may choose one of the following options:

1. An additional 84 days of full-time leave.
2. An additional 144 days of half-day leave. In this case, the employee only works for half of the working day, and the other half is spent with the child.
3. An additional 84 days that is shared with the father of the child. The employee must notify the employer of this at least 30 days before the end date listed on the post-birth license.

No medical certificate is needed for parental leave. The choice of parental leave is completely up to the employee and cannot be influenced by the employer.

This leave is paid for at 100% of the employee’s regular salary by the healthcare system.

Tax and Social Security Information

Personal Income Tax

The individual income tax ranges from 0% to 40%. Income tax is calculated according to progressive rates. Non-residents may be subject to an additional flat tax rate of 15%.

Gross Annual Income	Tax Rate (%)
Up to CLP 854,050.50	0%
CLP 854,050.51 to CLP 1,897,890.00	4%
CLP 1,897,890.01 to CLP 3,163,150.00	8%
CLP 3,163,150.01 to CLP 4,428,410.00	13.50%
CLP 4,428,410.01 to CLP 5,693,670.00	23%
CLP 5,693,670.01 to CLP 7,591,560.00	30.40%
CLP 7,591,560.01 to CLP 19,611,530.00	35.50%
Over CLP 19,611,530.01	40%

Social security

• Health Insurance
• Life Insurance
• Pension Fund
• Profit-Sharing Bonus
• Unemployment Insurance
• Workers Compensation Insurance
• Private Healthcare – Unisure (optional)
• Private Healthcare – Allianz (optional)

Public Holidays 2024

Holidays	Date
New Year’s Day	1.1
Good Friday	3.29
Easter Saturday	3.30
Labour Day	5.1
Navy Day	5.21
Primary Elections Day	6.9
National Day of Indigenous Peoples	6.20
Feast of St Peter and St Paul	6.29
Our Lady of Mount Carmel	7.16
Assumption Day	8.15
Independence Day	8.18
Army Day	9.19
Added National Holiday	9.20
Meeting of Two Worlds	10.12
Municipal Elections Day	10.27
Reformation Day	10.31
All Saints’ Day	11.1
Immaculate Conception	12.8
Battle of Ayacucho	12.9
Christmas Day	12.25