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How to hire and pay employees in Chile
Slasify
Jun 21, 2025
Before Hiring in Chile
Discover the global hiring and employment landscape in Chile—positioned as a stable economy with a strategic location in South America, Chile offers a favorable business environment with robust infrastructure and proactive government policies, making it an attractive destination for international expansion.
Explore the employment essentials including payroll, personal income tax, statutory contributions, annual leaves, minimum wage, terminations, visa requirements, and more. Gain valuable compliance insights for a smooth entry into the dynamic Chile market with Slasify's global premium HR platform.
At a Glance
| Capital | Santiago |
| Currency | Chilean Peso (CLP) |
| Payroll Cycle | Monthly |
| Minimum Wage | CLP 510,500 per month |
| Annual Leave | 15 days |
| Personal Income Tax | Up to 40% |
Personal Income Tax
Personal income tax is levied on a progressive scale on income brackets that are expressed in Monthly Taxable Units (MTU). The exact value of MTU in CLP is updated monthly.
| Taxable Income (MTU) | Progressive Tax Rate (%) |
|---|---|
| Up to 13.5 | - |
| 13.5–30 | 4 |
| 30–50 | 8 |
| 50–70 | 13.5 |
| 70–90 | 23 |
| 90–120 | 30.4 |
| 120–310 | 35 |
| Over 310 | 40 |
Local Taxes
There are no local taxes on employment income in Chile.
Statutory Contributions
Contributions made for Unemployment Insurance are calculated based on the employee's salary of up to UF 126.6, while other contributions are generally calculated based on the employee's salary of up to UF 84.3.
Note: Unidades de Fomento (UF) is a non-circulating currency of which the exchange rate between UF and CLP is constantly adjusted for inflation. This is used as a unit of account, and their exact value in CLP is regularly updated.
Employer Contributions
| Contribution Rate | Note | |
|---|---|---|
| Work Accident Insurance | 0.93% | This rate of contribution may increase according to the presumed risk of the business activity. |
| Disability and Survival Insurance | 1.38% | - |
| Unemployment Insurance | 2.4% | Employers shall cover the employee's portion of this contribution if they are engaged on a fixed-term basis. |
Employee Contributions
| Contribution Rate | Note | |
|---|---|---|
| Pension | 10% | - |
| Health Care Coverage (FONASA) | 7% | - |
| Unemployment Insurance | 0.6% | This contribution shall be borne by the employer for fixed-term employees. |
Employees may be liable to pay an additional 0.49%–1.44% of AFP Administration Fee. Find out how much AFP charges to manage the employee's pension savings here.
Payment of Wages
Salaries can be set per unit of time—daily, weekly, fortnightly or monthly or by piece—but shall be paid at least once per month.
Minimum Wage
Effective January 1, 2025, the minimum wage in Chile is set at CLP 510,500 per month.
Statutory Bonus
A Christmas bonus, or Aguinaldo, may be customary, but not mandatory. However, companies that pursue profit and cooperatives that earn profits or liquid surpluses are generally obligated to reward their employees annually in a proportion of not less than 30% of their profits.
The employer's profit sharing obligation is regulated by the Labor Code, and more information on this can be accessed here.
Termination
Termination notices, resignation letters, mutual agreements and other settlements must be made in writing, signed by the relevant parties and ratified by the employee before the Labor Inspectorate.
Unilateral dismissals by the employer are allowed with the prior authorization of a competent judge on the grounds of a verified misconduct or other business related reasons.
Notice Period
Termination of employment contracts are subject a notice period that ranges between 3 to 30 days depending on the reason for termination:
| Reason for termination | Notice Period |
|---|---|
| Misconduct of a serious nature | 3 business days |
| Conclusion of a fixed-term contract | 3 business days |
| Force majeure | 6 business days |
| Resignation | 30 days |
| Business-related reasons | 30 days |
Severance Pay
Employees who have worked for at least a year and are dismissed either due to business-related reasons or bankruptcy are entitled to the receive a severance equivalent to 30 days' salary for each year of service, capped at 330 days' remuneration.
Severance pay is calculated based on the employee's last monthly salary or, in the case of employees receiving variable payment, based on their average salary over the last 3 months. In any case, the salary used to calculate severance entitlements are subject to a maximum of UF 90 on the last day of the month prior to their payment.
Note: For the purpose of calculating severance entitlement, a fraction of 6 months of service shall be rounded up to a full year.
Probationary Period
There are no formal regulations surrounding probationary period for private sector employees in Chile.
Work Time Rules
Standard Working Hours
With the introduction of Law No. 21,561, the weekly maximum working hours shall be reduced from 45 hours by an hour every year starting from 2024 until they reach 40 hours per week in 2028.
When fully implemented, standard working hours shall not exceed 40 hours per week, distributed over 4 to 6 days per week.
The distribution of weekly working hours can be done on the basis of weekly averages in periods of up to 4 weeks, provided that it does not exceed 45 hours in each week and that the limit is not extended for more than 2 continuous weeks in the cycle. A comprehensive guide on the implementation of working hours averaging can be accessed here.
Break Period
Employees are entitled to a 30-minute break period in each working day, which shall not be considered as part of their working hours.
Moreover, female employees with a child under 2 years old are entitled to at least an hour of nursing break per day. This period shall be counted as part of the employee's working hours. This break can be taken at any time during the day, continuously or separated into two portions, or be taken at the start or end of the working day.
Note: An employee's right to nursing break can be transferred to the working father of the child with a written letter addressed to the respective parent's employers and the Labor Inspectorate 30 days in advance.
Overtime
Overtime can be worked only if it is necessary to meet the company's temporary needs, provided that they do not harm the employee's health and does not exceed 2 hours per day.
An agreement to work overtime must be made in writing. These agreements shall remain valid for up to 3 months, subject to any renewal of agreements
Overtime work is paid at 150% of the employee's hourly pay and shall be paid together with their usual pay
Weekly Rest Days
Employees are generally entitled to a day of rest per week, which usually falls on Sundays. Obligations and prohibitions related to rest days will begin at 9 p.m. before the relevant day and end at 6 a.m. the following day, except for time changes that occur due to the rotation of work shifts.
Conditions permitting employees to work on their rest days are similar to those for the performance of work on public holidays.
Holiday and Leave Entitlements
Public Holidays
Public holidays are considered rest days for employees unless work has been authorized for that day by Law. There are 18 days of public holidays in Chile for 2025.
| Holiday | Date |
|---|---|
| New Year's Day | January 1 |
| Good Friday | April 18 |
| Holy Saturday | April 19 |
| Labor Day | May 1 |
| Day of Naval Glories | May 21 |
| National Day of Indigenous Peoples | June 20 |
| Saint Peter and Paul's Day | June 29 |
| Day of the Virgin of Carmen | July 16 |
| Assumption | August 15 |
| National Independence Day | September 18 |
| Day of the Glories of the Army | September 19 |
| Meeting of Two Worlds | October 12 |
| Day of the Evangelical Churches | October 31 |
| All Saints' Day | November 1 |
| Presidential and Parliamentary Elections | November 16 |
| Immaculate Conception | December 8 |
| Presidential Elections | December 14 |
| Christmas Day | December 25 |
Employees who have been authorized to work on public holidays must be granted compensatory days off and be paid overtime rates whenever their work exceed their regular weekly working hours.
Annual Leave
Employees with more than a year of service will be entitled to 15 working days of paid annual leave, or 20 working days for employees in the Region of Magallanes, the Region of Aysén, and in the Province of Palena.
In addition to the above, employees with at least 10 years of work experience, regardless of having changed employers, will be entitled to an additional day of leave for every 3 years of work. However, only up to 10 years of work provided to their previous employers can be counted towards this entitlement.
Annual leave of up to 10 working days must be taken continuously, with the remaining days being divisible by mutual agreement. This leave can also be accumulated and carried over for up to a period of 2 consecutive years, provided that at least the first half of this leave is used before completing the year that gives them the right to a new period.
Sick Leave
In the event of an illness or an accident, employees shall be entitled to sick leave for the duration indicated in the certificate issued by the medical professional.
There is no limit to sick leave, provided that the applicable duration is reflected on the medical certificate. Such medical certificate must be provided within 2 working days of being sick.
Note: Employers are obligated to pass on the employee's medical certificate to the relevant health insurance organization within 3 working days, which will then cover sick leave allowances to the employee on leave.
Maternity Leave
Female employees are entitled to 6 weeks of pre-natal leave and 12 weeks of post-natal leave, provided that the employer is presented with the relevant medical or midwife certificate. This leave can be further extended in the following cases, provided that these are supported by the relevant medical certificates:
| Extension of pre-natal leave | Extension of post-natal leave |
|---|---|
| If a sickness occur due to the pregnancy, the employee will be entitled to additional pre-natal rest, the duration of which is determined by the services in charge of medical care | If a disease preventing the employee's return to work is caused by childbirth, they will be entitled to additional post-natal rest, the duration of which is determined by the services in charge of medical care |
| If the delivery occurs after 6 weeks of the employee's pre-natal leave, the pre-natal leave is considered to be extended until the date of birth | If the delivery occurs before the 33rd week of gestation, or if the newborn child weights less than 1500 grams, the post-natal rest will be extended to 18 weeks |
| In the case of multiple births, the post-natal rest will be increased by 7 days for each additional child. |
During maternity leave, the employee will be entitled to receive an allowance equivalent to their normal remuneration, paid by the relevant social security authority.
Note: In the event of the employee's death during childbirth or post-natal leave, the remaining maternity leave is transferrable to the child's father or the person with the child's custody.
Paternity Leave
Male employees are entitled to 5 days of paid paternity leave, which can be taken continuously or non-continuously within a month of their child's birth.
Parental Leave
Working mothers are entitled to 12 weeks of parental leave right after their maternity leave.
| If the mother has died or the father has the personal care of the minor by court ruling | The parental leave entitlement can be transferred over to the male employee. |
|---|---|
| If both parents are working, |
The mother may choose to transfer up to 6 weeks of her parental leave entitlement to the father (or 12 weeks for part-time leave). In the event that the father makes use of this leave, their employer and the Labor Inspectorate must be notified 10 days in advance. |
This leave can be taken on a part-time basis, i.e. returning to work after maternity leave for half days, for a duration of up to 18 weeks, provided that a certified letter of notification is given to the employer and the Labor Inspectorate 30 days before the end of the employee's post-natal leave.
Employers are obligated to inform the social security authority responsible for covering the employee's pay during their leave about their decision to take parental leave before its start date.
Other Leave
| Leave | Paid/Unpaid | Duration | Note |
|---|---|---|---|
| Bereavement Leave | Paid | 4–10 days | This can be taken in the death of a child (10), child during gestation period (7), spouse or civil partner (7), sibling (4) and parent (4). |
| Leave for Mammography and Prostate Exam | Paid | 0.5 days per year |
For employees who have worked for more than 30 days to undergo mammography and prostate exams, and other preventive medicine services, provided that the employer is informed a week in advance. This also applies to those participating in public immunization programs or campaigns through vaccines or other means to control and prevent communicable diseases, provided that the employer is informed 2 says in advance. |
| Leave to Take Care of a Sick Infant | Unpaid | - |
For working mothers to take care of a child up to a year old with serious illness. In the event that both parents are working, any of them, at the mother's choice, can enjoy this leave. However, fathers will only enjoy this leave when he has custody of the child or the mother has died. |
| Leave to Take Care of a Sick Child** | Paid | 10 days per year |
For working parent to take care of a child between 1 and 18 years old who suffers from a serious, acute and life-threatening illness, or a serious accident. If both parents are working, they may use this leave jointly or separately. |
| Marriage/Civil Union Leave | Paid | 5 days |
For employees in the event of their marriage or civil union, provided that the employer is notified 30 days in advance. The employee must submit the marriage certificate or civil union agreement from the Civil Registry and Identification Service within 30 days of the celebration. |
| Military Service Leave | Both | - | Employees doing military service or those who form part of the mobilized national reserves are not paid for their absence. However, reserve personnel called to serve for less than 30 days will be paid by their employers. |
**This leave can also be taken to care for the employee's terminally sick spouse, civil partner and parent, provided that the time not worked are restored by the employee by assigning it to their next annual leave entitlement, working overtime or through any other means mutually agreed upon by the parties.
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