| Year | 2020 |
| Country | Chile (CL,CHL) |
| Capital | Santiago Chile |
| Num. States / Province | 56 provinces |
| Principal Cities | Santiago de Chile, Gran Concepción, Gran Valparaíso, Gran la Serena |
| Language | Spanish |
| Local Currency | Chilean Peso (CLP) |
| Major Religion | Catholic |
| Date Format | DD/MM/YYYY |
| Thousands Separator Format | 999.999,99 |
| Country Dial Code | +1 56 |
| Time Zone | Easter Island Summer Time (EASST) UTC-5 * |
| Chile Summer Time (CLST) UTC-3* | |
| * started on the 7th of September 2019 | |
| Easter Island Standard Time (EAST) UTC -6 ** | |
| Chile Standard Time (CLT) UTC-4 ** | |
| **Starts on the 4th of April | |
| Population | 18.850 Million |
| Border Countries | Peru to the north, Bolivia to the northeast and Argentina to the east |
| Continental surface | 755,776.4 Km2 |
| Tax Year | January 1st to December 31st |
| VAT % | 19% |
| Minimum Wage | 301,000.00 CLP per month, until the 1st of March |
| Tax Payer Identification Number Name in the country | National Single Role - RUN (Rol Único Nacional) or |
| Single Tax Role - RUT (Rol Único Tributario) | |
| Current President | Sebastián Piñera |
| Laws | Brief Description |
| Constitucion Politica de la Republica de Chile | It is the maximum law that governs the economic, social and political life in Chile |
| Labor Code (CT- Codigo de trabajo) | Labor relations between employers and workers will be regulated by this Code and by its complementary laws. |
| Law 21.015 | Encourage the inclusion of people with disabilities in the world of work |
| Law 20.545 | Modifies the rules on maternity protection and incorporates the Parenta Postnatal Permit |
| Law 20.137 | Grants work permit for birth and death of relatives |
| Law 20.012 | Grants extraordinary bonus for lower income sectors |
| Law 20.005 | Punish sexual harassment |
| Law 19728 | Unemployment Insurance |
| Law 16.744 | Approves social insurance against accidents risks at work and occupational diseases |
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Authorities |
Brief Description |
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Internal Revenue Service (SSI-Servicio de Impuestos Internos) |
Is responsible for overseeing and providing services aimed at the correct application of internal taxes; efficiently, equitably and transparently. Its purpose is to reduce tax evasion and provide taxpayers with excellent services to maximize and facilitate voluntary tax compliance. |
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Ministry of Finance of Chile
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It is the State Ministry responsible for directing Chile's finances; its mission is to efficiently manage public resources through a modern state at the service of citizens; generating conditions of stability, transparency and competitiveness in an internationally integrated economy that promote sustainable and inclusive growth. |
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National Health Fund (FONASA- Fondo Nacional de Salud) |
It is the financial entity in charge of collecting, administering and distributing the state money destined to health in Chile, being one of its functions to finance the health benefits of its beneficiaries. |
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Pension Health (ISAPRES- Instituciones de Salud Previsional) |
They are private entities that operate on the basis of an insurance scheme, which are empowered to receive and administer the mandatory health contribution of workers and individuals, who free and individually they opted for them instead of the state health system (FONASA) |
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Pension Health Institutions (AFP- Administrado de Fondos de Pensiones) |
The mandatory individual capitalization system is that all workers must deposit a percentage of their salary or income in a personal account with a Pension Fund Administrator (AFP) each month. These resources are aimed at financing the future pension that the person will receive at the retirement stage. |
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Disability and Survival Insurance (SIS- Seguro de Invalidez y Sobrevivencia) |
Disability and Survival Insurance is a percentage of the employees’ taxable income that aims to pay them pension in case of disability or survival to the employees’ family in case of death. |
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Social Security Institute (IPS- Instituto de Previsión Socia) |
The IPS provides social security benefits and services, through its ChileAtiende service network, promoting excellence in its management and bringing the State in an inclusive manner to people, considering its officials and civil servants as the main capital of the institution. |
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Indefinite contract |
The fixed term contract becomes indefinite when:
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Temporary Work or Task Contract |
It is that convention by which the worker is bound by the respective employer to execute a specific and determined work, whose validity is limited to its duration. The different tasks or stages of a work may not by themselves be subject to two or more continuous contracts, in which case the contract will be understood to be an indefinite term. |
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Part-time Contract |
This type of work its when it has been agreed to not exceed two thirds of the ordinary work day. Part-time workers will enjoy all other rights provided for full-time workers. However, the maximum limit of legal gratification may be proportionally reduced, in accordance with the relationship between the number of hours agreed in the part-time contract and that of the ordinary working day. |
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Apprenticeship contract |
Apprenticeship work is when the employer or a third party undertakes to impart to an apprentice in certain conditions, the knowledge and skill to fulfill a task or work and will receive an agreed remuneration. Only workers under 21 years of age may enter into an apprenticeship contract. The following will be special obligations of the employer: 1.- Occupy the apprentice only in the work of the apprenticeship program, providing the appropriate work elements. 2.- Allow the controls that correspond to the National Training and Employment Service in contracts of this kind. The contract referred to in this chapter will be valid until the end of the learning plan, which may not exceed two years. |
The information that the contract must contain is stablished in the Article 10 of Labor Code:
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The payroll is one of the most important documents within a company, since there is a control of all the withholdings, by law and additional, of the salary of the employees. From this operation, the final amount that a worker will receive and the amount that the company will invest in a given period is obtained.
The employer must deduct from the salary the taxes, social security contributions, union dues in accordance with the respective legislation and obligations with social security institutions or public bodies. Whatever the basis of the deductions made to the remuneration by the employer, or the origin of the loans granted, in no case they may exceed, together, 45% of the total compensation of the worker.
The main remuneration benefits that the employer is obliged to pay to its workers on the occasion of the employment relationship are those indicated in the Labor Code, without prejudice to all those granted and agreed according to the employment contract.
The role that labor benefits play is that they are always aimed at improving the living conditions of workers, reducing their expenses and granting them incentives that foster their cultural and social development.
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Salary Article 41, Labor Code |
Compensation is understood as the consideration in money and the additional benefits that can be assessed in money that the employee must receive due to the employment contract, an they shall be paid in the legal currency of the country. A compensation ca be:
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Legal Gratification Article 47and 52, Labor Code |
Companies that pursue profit, will have the obligation to annually reward its workers in a proportion not less than 30% of the profits or surpluses. This obligation is annual. Even so, legally and commonly what is done by companies, is to pay 25% of the accrued in the respective commercial year for monthly remuneration. In other words, 25% of the employee's gross salary is paid. It is also possible to opt for another modality by the employer, this is, in case 25% of the base salary exceeds 4.75 times the minimum monthly income the bonus to be received would be $ 119,146 (with a minimum salary of 01-03-2019). |
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Vacations Article 67, Labor Code |
Workers with more than one year of service will be entitled to an annual holiday of fifteen working days, with full compensation that will be granted in accordance with the formalities established by the regulation. During the holiday, the full remuneration will be constituted by the salary in the case of workers subject to the fixed remuneration system. In the case of workers with variable remuneration, the full remuneration will be the average of earned in the last three months worked. |
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Christmas Bonus
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There is no legislation regulating the Christmas bonus, however, companies usually pay an amount in the month of September (national holidays) and another in December (Christmas). |
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Special Leaves Article 66, 199,206 and 207, Labor Code |
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The employer contributions turn out to be those sums of money that the employer will be obliged to contribute to the state for having employees. They are not recoverable for the employer and turn out to be indispensable for employees since this covers part of what is paid to social security.
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Social Security |
Disability and Survival Insurance AFP, SIS: Seguro Invalidez y Sobrevivencia AFP, SIS |
This insurance is financed by employers during the employees active working life. This insurance covers expenses in case of being declared invalid (partial or total) or death, granting a survivor's pension. The SIS covers dependent, independent or voluntary affiliates, remaining under the concept of “Covered”. For the purpose of paying employers, the only rate to be paid is 1.53%. Benefits:
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Social Security against Accidents and Occupational Diseases ATEP Seguro de Accidentes del Trabajo y Enfermedades Profesionales, ATEP |
The objective of the ATEP is to prevent and protect the worker from an accident at work, from accidents on the way to work / home or from a professional illness by performing his work, either on a dependent basis (with an employment contract) or independently (fees or on their own). The dependent worker is covered from the moment he begins to work, even if he does not have a written contract or the respective contributions have been paid. |
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Unemployment Insurance Seguro de Cesantía |
It is an economic protection in case of unemployment, to which all workers governed by the Labor Code are entitled. This affiliation is mandatory and must be communicated by the employer to AFC Chile. For each Affiliate, the AFC creates an Individual Unemployment Account (CIC), whose accumulated resources are owned by each worker. As a complement to individual savings, there is the Solidarity Unemployment Fund (FCS), which is a distribution fund made up of contributions from the employer and the State, whose property does not belong to any particular worker, but to all affiliated workers. It is used to supplement the benefit when the balance of the Individual Unemployment account is insufficient. Unemployment Insurance contributions are planned and therefore are exempt from income taxes. |
Workday is the time during which the worker must effectively lends his services in accordance with the contract and will also be considered the time in which the worker is at disposition of the employer without doing work, for reasons that are not attributable to him.
The duration of the ordinary working day shall not exceed 45 hours weekly.
The weekly maximum may not be distributed in more than six or in less than five days. In no case may the ordinary day exceed ten hours per day.
The work day will be divided into two parts, leaving at least half an hour for collation.
The ordinary day may be exceeded, but to the extent necessary to avoid damages in the normal operation of the establishment or work, when force majeure or case occur, or when accidents must be prevented or arrangements or repairs cannot be carried out in the machinery or facilities. Hours worked in excess will be paid as overtime.
Overtime will be paid with a 50% surcharge on the salary agreed for the ordinary day and must be paid together with the ordinary remuneration for the respective period.
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Type of Work Day |
Working hours per Day |
Over Time |
Sundays |
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Day shift |
10 hours per day/ 45 hours per week |
An additional 50% of the salary |
Obligatory day of rest |
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Night Shift |
7 hours per day / 36 hours per week |
On Sundays and those that the law declares holidays will be rest, except for the activities authorized by law to work on those days.
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Mandatory Rest Date |
Holiday Name |
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January 1st |
New Years |
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April 26th |
Constitutional Plebiscite |
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May 1st |
Labor Day |
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June 7th |
Mayor´s Primary Elections (TBD) |
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September 18th |
National Independence |
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September 19th |
Day of the Glories of the Army |
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October 25th |
Municipal Elections |
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December 25th |
Christmas |
For foreigners’ workers who have been hired by a company with residence in Chile, they have authorized work visa maximum of 2 years, and they can apply also for a resident visa for their family members.
The process will take place in the Consulate of chile from their foreign residence and the Department of Immigration of the Ministry of Foreign Affairs, will analyzes the data of the applicant.
Requirements:
Requirements for the contracting company:
About the Work Contract:
It must be drafted according to the Chilean legal norms and contain the following clauses:
The employment contract will end in the following cases:
The employment contract ends without the right to compensation when the employer terminates it by invoking one or more of the following causes:
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Misconduct of serious nature:
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Negotiations executed by the worker within the business line and that would have been prohibited. |
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Non-attendance of the worker to their work without just cause for two days in a row. |
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Abandonment of the work. |
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Acts, omissions that affect safety or operation in the establishment. |
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Intentional damage to facilities, machinery, tools, etc. |
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Serious breach of the obligations imposed by the contract. |
The employer may terminate the employment contract by invoking as grounds the needs of the company, establishment or service, such as low productivity, changes in market conditions or the economy, which make the separation of one or more workers necessary.
Invalidity, total or partial, is not just cause for the termination of the employment contract. The worker who is separated from his duties for this reason, will be entitled to a compensation.
In case of termination, the employer must communicate it in writing to the worker, personally or by registered letter sent to the address indicated in the contract, expressing the cause (s) invoked and the facts on which it is based.
Notwithstanding the foregoing, the employer must pay the worker the remuneration and other benefits set forth in the employment contract during the period between the date of dismissal and the date of sending or delivering the said communication to the worker.
If the contract has been valid for a year or more and the employer terminates it in accordance with article 161 of the Labor Code, the worker must pay compensation for years of service that the parties have agreed individually or collectively, the employer must pay the worker a compensation equal to 30 of the last monthly remuneration for each year of service and fraction greater than six months, provided continuously. This compensation will have a maximum limit of 330 of remuneration.
The employer will have to pay as well the provision of the holidays that the employee was entitle to at the time of the termination.
The contract concluded for a specific work or task has been in force for a month or more, the employer may terminate it justifiably as long as it pays the worker, at the time of its termination, compensation equivalent to 2.5 days of remuneration for each month worked and a fraction greater than fifteen days […] (CDT. Art. 163)