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Global Expansion Guide

Chile

Manage and pay your employees easily with BIPO in Chile and 170+ other markets. Build your international teams today with our global Employer of Record service!

employment guide_currency

Currency

Chilean Peso (CLP)

employment guide_language

Language

Spanish

employment guide_capital

Capital

Santiago

Employer of Record Chile

Employment Contract

Statutory Contributions

Minimum Wage

Public Holidays

Working Hours

Leave

Termination and Compensation

BIPO as your Employer of Record

Benefits of BIPO EOR Service in Chile

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Employer of Record Chile

Embark on your business expansion in Chile with BIPO’s Employer of Record (EOR) services. Designed to assist you in navigating the intricacies of local employment laws and regulations, we can help ensure a smooth transition for your business and workforce.

As an Employer of Record (EOR), we act as your legal employment entity, streamlining the process of business expansion. Allowing businesses to focus on their core business operations while the EOR manages all aspects of compliance, payroll, HR, and employee benefits when venturing into the Chilean market. An EOR provider addresses the common challenges associated with local employment laws, payroll regulations, and work permit requirements.

This guide was last updated on 18 December 2025. The content in this guide is current as of this date and based on common business practices.

Employment Contract

  • Employment contracts must be executed in writing, with one copy retained by each party.

    • If an employer fails to execute a written contract within fifteen (15) days from the employee’s date of commencement (or within five (5) days where the contract is for a specific work, task, or service, or where the contract term is less than thirty (30) days), the employer shall be subject to a fine equivalent to one (1) to five (5) legal tax units, payable to the national treasury.
    • Where an employee refuses to sign the contract, the employer shall submit the contract to the relevant labour inspection authority, which shall request the employee’s signature.
    • If the employee continues to refuse to sign during the labour inspection process, the employer may terminate the employment without compensation, unless the employee can demonstrate that the employment conditions differ from those stipulated in the written contract.

  • An employment contract shall include, at a minimum, the following clauses:

    1. Place and date of execution of the contract
    2. Identification details of both parties, including the employee’s nationality, date of birth, and date of commencement
    3. Nature of the services and the place where the services are to be performed
    4. Agreed remuneration, including the amount, method of payment, and payment frequency
    5. Daily working hours and work schedule; where a shift system applies, the company’s internal rules and regulations shall govern
    6. Duration or term of the contract
    7. Any other terms and conditions mutually agreed by the parties

Statutory Contributions

Types Monthly Cap (UF) Employee Contribution Employer Contribution
Pension Insurance 87.8 10% 1%
Public Health Insurance 87.8 7% –
Private Health Insurance – – –
Unemployment Insurance 131.8

0.6%

(Permanent Contracts)

2.4 %

(Permanent Contracts)

–

(Fixed Term Contracts)

3.0%

(Permanent Contracts)
Disability and Survivors Insurance – – 1.49%
Work-related Injury and Occupational Disease Insurance 87.8 –

≥ 0.91%

(Based on Incident Rate)

Notes:

  • UF: Chile’s inflation-adjusted unit, updated daily based on the Consumer Price Index announced by the Central Bank of Chile.
  • Public and private health insurance belong to separate systems, and employees may participate in only one.
  • Overpayments of public health insurance can be claimed for a refund twice a year.
  • Overpayments of private health insurance can be accumulated for medical expenses or supplementary payments and refunded once per year.

Minimum Wage

Employee Age Effective Date Minimum Wage
18 to 65 Years Old 1 May 2025 CLP 529,000 / Month
1 January 2026 CLP 539,000 / Month
< 18 Years Old or > 65 Years Old 1 May 2025 CLP 394,622 / Month
1 January 2026 CLP 402,082 / Month

Public Holidays

The public holidays listed below are national public holidays observed across Chile. Please refer to official government announcements for the latest updates.

  • New Year’s Day
  • Good Friday
  • Labour Day
  • Navy Day
  • Indigenous Peoples’ Day
  • Feast of St. Peter and St. Paul
  • Our Lady of Mount Carmel Day
  • Assumption of Mary
  • Independence Day
  • Army Day
  • Day of the Two Worlds
  • Day of the Evangelical and Protestant Churches
  • All Saints’ Day
  • Immaculate Conception Day
  • Christmas Day

Notes:

  • If a public holiday coincides with a weekly rest day, there is no mandatory requirement to provide a compensatory day off.
  • Overtime Compensation for Public Holiday Work: 1.5 times the regular wage.
  • Exemptions from Overtime Compensation: Managers, administrative staff, agents with managerial authority, and employees whose work does not require direct supervision.

Working Hours

Normal Working Hours

Effective Date Working Hours Per Week
From April 26, 2024 44 Hours
From April 26, 2026 42 Hours
From April 26, 2028 40 Hours
Note: Weekly working hours must be distributed over no fewer than 5 days and no more than 6 days.
  • Daily Rest: At least 30 minutes of rest per day, except for work of a continuous-operation nature.
  • Weekly Rest: Sunday is generally observed as the rest day; however, some industries have exceptions and may require compensatory rest.
  • Overtime Compensation: 1.5 times the regular wage.
  • Exemptions from Overtime Compensation: Managers, administrative staff, agents with managerial authority, and employees whose work does not require direct supervision.

Leave

Annual Leave

  • Applicable Employer Type: Single Employer (Standard Annual Leave) and Combined Employer (Supplementary Annual Leave)

    • Standard Annual Leave: 15 days for employees who have completed 1 year of continuous service with a single employer.
    • Supplementary Annual Leave: For employees with 10 or more years of continuous service with a single or combined employer, an additional 1 day of annual leave is granted for every subsequent 3 years of continuous service. A maximum of 10 years of prior service with previous employers may be counted.

  • Allowance:

    • Fixed Wage Employees: Paid at 100% of the fixed wage.
    • Variable Wage Employees: Paid based on the average income of the previous three months.
    • Employees with Fixed + Variable Wages: Paid based on the fixed wage plus the average of the variable portion.
  • Annual Leave Cash-out: If an employee leaves employment with unused annual leave, the employer shall pay full compensation.

Sick Leave

  • Types of Sick Leave: Ordinary illness or accident, preventive medical leave, maternity leave before and after childbirth, serious illness of children under one year old, work-related or commuting accidents, occupational diseases, and pathological pregnancy.
  • Duration: Determined based on a certificate issued by a medical professional.

  • Allowance:

    • Disability Benefit:

      • For sick leave exceeding 10 days, the allowance is calculated from the first day of leave; for sick leave of 10 days or less, from the fourth day.
      • The allowance base is the average net monthly income (taxable remuneration minus social security contributions and personal income tax), including subsidies, over the three months immediately preceding the start of sick leave.
      • The daily allowance is 1/30 of the allowance base, with a minimum of CLP 5,683 per day (effective 1 May 2025).
    • Civil servants or employees in certain occupations may receive wage compensation according to applicable laws.

  • Eligibility for Allowance:

    • Fixed-term employees: At least 6 months of social security contributions, including at least 3 months in the most recent 6 months.
    • Temporary employees: At least 6 months of social security contributions, including at least 1 month in the most recent 6 months.
    • Self-employed employees: At least 12 months of social security contributions, including at least 6 months (continuous or non-continuous) in the most recent 12 months.

Maternity Leave

  • Eligibility: Employees of private enterprises who have obtained authorised sick leave and have made continuous or cumulative social security contributions for at least 6 months prior to the start of leave, including at least 3 months in the most recent 6 months.

  • Duration:

    • Pre-natal Leave: 6 weeks (42 days). Supplementary leave applies for pregnancy-related illnesses, and extended leave applies if the original leave exceeds 6 weeks.
    • Post-natal Leave: 12 weeks (84 days), or 18 weeks for premature births (gestation < 33 weeks or birth weight < 1,500 g). An additional 7 days for each subsequent child in multiple births. Extended post-natal leave applies for pregnancy-related illnesses.
  • Allowance: Same as the disability benefit described above.

Other Leave Types

  • Bereavement Leave for Stillbirth: 7 consecutive days, fully paid.

  • Bereavement Leave:

    • 10 consecutive days for the death of a child.
    • 7 consecutive days for the death of a spouse or civil partner.
    • 4 consecutive days for the death of a parent or sibling, fully paid.

  • Parental Leave:

    • 12 weeks for full-time female employees; 18 weeks for part-time female employees.
    • Leave may be transferred to the father starting from the 7th week. Disability benefit applies.
  • Marriage Leave: 5 days, to be taken continuously on the wedding day or civil partnership signing, or a few days before or after, fully paid.
  • Breastfeeding Leave: 1 hour per day for female employees with children under 2 years old, fully paid.
  • Paternity Leave: 5 days, which the father may take continuously from childbirth (excluding weekly rest days) or intermittently within the first month, fully paid.

Termination and Compensation

Termination by the Employer

  1. Immediate termination: The employer may terminate the employment contract with immediate effect and without compensation in cases of serious misconduct or serious breach of discipline by the employee.

  2. Termination for business needs: Termination on grounds of business necessity (not applicable to employees on sick leave due to ordinary illness, work-related injury, or occupational disease) requires:

    • Written notice at least 30 days in advance, or payment in lieu of notice; and
    • Submission of a copy of the notice to the labour inspection authority. Severance compensation shall be paid based on the employee’s length of service.
  3. Termination due to disability: Termination on the grounds of total or partial disability is deemed unjustified. Compensation shall be paid based on the employee’s length of service, together with an additional statutory percentage as supplementary compensation.

  4. Termination due to contract expiry or force majeure:

    • In cases of contract expiry or completion of specific work, the employer must issue written notice within 3 days of the employee’s departure.
    • In cases of unforeseen events or force majeure, written notice must be issued within 6 days of the employee’s departure. Severance compensation shall be paid based on the employee’s length of service.

  5. Termination due to liquidation: Where the employer enters into liquidation proceedings, it must:

    • Issue written notice together with a liquidation certificate within 6 working days; and
    • Submit a copy to the labour inspection authority.

    The employer shall pay compensation in lieu of notice equivalent to the employee’s average wage over the previous 3 months (or, if employed for less than 3 months, two months’ wages or the last month’s wage). Where the employment contract exceeds one year, severance compensation shall also be paid based on length of service.

Termination by the Employee

An employee who resigns must provide the employer with at least 30 days’ written notice.

Calculation of Compensation

  • Base for Calculation

    • Compensation shall be calculated based on the employee’s actual income at the time of termination.
    • For variable remuneration, the average income of the most recent three months shall apply.
    • The monthly wage ceiling is 90 UF, excluding family allowances, overtime pay, and occasional benefits.

  • Method of Calculation

    • Open-ended contracts (1 year or more) terminated for business needs: Compensation equivalent to 30 days’ wages for each completed year of service, with any period exceeding six months counted as one full year. The maximum compensation is capped at 330 days’ wages.
    • Fixed-term or specific-work contracts: Compensation of 2.5 days’ wages for each month of service. Any period exceeding 15 days shall be counted as one full month.
    • Domestic employees: Regardless of the reason for termination, the employer must deposit 1.11% of the employee’s monthly wage into the individual pension account as compensation. Contributions accumulate from 1 January 1991 or the employee’s date of hire, whichever is later, for a maximum of 11 years.

  • Disputes:

    • If the employee successfully proves in legal proceedings that the termination was unlawful, the severance compensation shall be increased by between 30% and 100%, depending on the severity of the employer’s unlawful conduct.

BIPO as your Employer of Record

BIPO’s total HR solutions include our award-winning HR Management System, Global Payroll Outsourcing, Employer of Record service, and Athena BI.

As your EOR partner, our services are designed to provide a comprehensive, hassle-free experience:

  • Initial Consultation:
    The journey typically begins with an in-depth discussion to understand your specific business needs, ensuring our EOR services perfectly align with your objectives.
  • Payroll Management:
    We offer a streamlined payroll system that ensures timely and accurate salary disbursement, complete with statutory deductions and contributions in full compliance with Chilean regulations.
  • Contributions and Taxes:
    Our expertise in managing local social security requirements ensures your business complies with in-country financial obligations.
  • Compliance with Minimum Wage and Working Hours:
    We guarantee that your employment practices adhere to Chile’s minimum wage and working hours standards, safeguarding your business against potential legal issues.
  • Leave and Paid Time Off Management:
    Implement and manage leave policies that comply with Chilean laws, ensuring a fair and transparent leave management system for your employees.
  • Regulatory Compliance:
    Stay ahead of local labour laws and regulations with our up-to-date compliance services, minimising legal risks for your business.
  • Other services:
    Work visa, permit applications, termination procedures.

Services may vary across countries.

Benefits of BIPO Employer of Record Service in Chile

Unlock your growth potential with BIPO’s Employer of Record service in Chile. Our EOR service empowers businesses with seamless scalability while ensuring regulatory compliance.

From smooth onboarding to risk mitigation, BIPO handles the administrative HR tasks, enabling companies to concentrate on core business functions and accelerating growth. Our local expertise and global reach ensure efficient operations, enhancing flexibility and reducing operational complexities.

Stay up to date with the latest employment regulations.

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Frequently Asked Questions

An Employer of Record (EOR) is a partner company that acts as the official employer for your employees.

An EOR company handles all the HR aspects and processes, including the legal complexities associated with regulatory and tax compliance.

As your EOR, BIPO supports your organisation by providing a comprehensive range of HR, payroll and advisory services to ensure your business stays compliant. These include end-to-end on/offboarding services for your employees (e.g.: payroll processing, HR and benefits administration, labour contracts, visa applications, payroll/tax compliance, and more).

By engaging BIPO as your EOR, your business benefits from:

  • Compliance in the global markets where you operate
  • Reduced costs and risk mitigation
  • Overall workforce productivity, effectiveness, and efficiencies

A global EOR benefits organisations regardless of size or industry. It is especially useful for organisations that want to:

  • Scale their global business and be fully operational in foreign markets quickly
  • Reduce financial and HR complexities while expanding internationally
  • Minimise time spent trying to understand local labour laws and foreign tax systems
  • Stay compliant across global markets while reducing HR and administrative workflows
  • Benefit from a centralised and intuitive cloud HR platform to manage international teams

A global EOR enables businesses to fast-track their market entry into international market, and reduce the complexities of setting up multiple foreign entities.

When you partner with BIPO, we take on the the day-to-day administrative tasks, while you maintain full control of the business and delegate HR workflows and hiring needs.

Our vast network of business partners across 170+ markets globally supports your business expansion plans, with in-country HR experts providing localised support. Going global has never been easier!

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