Employer of Record in Bolivia

Hiring in Bolivia for the first time can be overwhelming, especially when navigating unfamiliar employment laws. Whether you hire independent contractors, set up a legal entity, or use an EOR service, understanding the local employment landscape is crucial for success. Playroll’s comprehensive guide can help you get started if you're hiring locally or relocating a team member.

Companies can hire employees in Bolivia in the following three ways:

• Setting up a local entity. Entity establishment reduces risk exposure and enables direct hiring, but can be costly and time-consuming – making it less practical for companies seeking quick and flexible solutions for hiring in Bolivia.
• Partnering with an Employer Of Record. An EOR, like Playroll, is a third-party entity that serves as the legal employer of your international workforce which hires, pays, and manages compliance with Bolivia’s labor laws and tax regulations.
• Hiring independent contractors. Hiring contractors gives companies a flexible, affordable alternative to hiring local employees, though it involves unique misclassification risks.

Businesses can only operate smoothly in Bolivia if they comply with local labor laws including drafting compliant employment contract agreements and meeting taxation and payroll obligations. Learn more about the employment laws and regulations in Bolivia below, to avoid any compliance issues.

Employment Contract Requirements

In Bolivia, employment contracts can be verbal or written. The typical expectation is for contracts to be indefinite and signed, although fixed-term contracts are allowed if documented. Verbal contracts are assumed to be indefinite, and written contracts need authorisation from a labour inspector or higher administrative authority.

Onboarding Process

We can help you get a new employee started in Bolivia quickly, with a minimum onboarding time of just 1-2 working days. The timeline starts once the employee submits all required information onto the Playroll platform and completes any necessary local authority registrations. For non-nationals, the Right to Work assessment (if applicable) may add up to three extra days. Additional time may be needed for follow-ups on this assessment. Please note, payroll cut-off dates can impact the actual start date. Playroll's payroll cut-off date is the 10th of each month unless otherwise specified.

Working Hours in Bolivia

In Bolivia, the standard working hours are 8 hours per day, with a maximum of 6 working days in a week.

Overtime in Bolivia

Any work performed beyond the standard working hours per week in Bolivia is subject to overtime pay, as stipulated by employment contracts or collective agreements. Typically, the maximum limit for overtime hours is 2 hours per day, and the compensation is set at 200% of the regular salary rate.

Probation Period in Bolivia

The probation periods for permanent employees in Bolivia typically range from 1 to 3 months.

Fiscal Year in Bolivia

1 January - 31 December is the 12-month accounting period that businesses in Bolivia use for financial and tax reporting purposes.

Payroll Cycle in Bolivia

The payroll cycle in Bolivia is usually monthly, with employees being paid on the last working day of the month.

Minimum Wage in Bolivia

The minimum wage for employees in Bolivia is typically 11.719 BOB per hour, amounting to ~2,250 BOB per month for a typical 48 hour work week.

Bonus Payments in Bolivia

Bolivian employees receive a 13th-month salary (Aguinaldo) equivalent to one month's pay, capped at 25.00% of the company's profits. It is disbursed at year-end and is tax and social security exempt. A 14-month bonus is mandatory if the GDP exceeds 4.50% or the company earns annual profits.

Employer Tax Contributions

Employer payroll contributions are generally estimated at an additional 16.71% on top of the employee salary in Bolivia.

Employee Payroll Tax Contributions

In Bolivia , the typical estimation for employee payroll contributions cost is around 12.71%.

Individual Income Tax Contributions

The individual income tax in Bolivia is a flat rate of 13%.

Pension in Bolivia

Irrespective of personal savings, all resident citizens of Bolivia aged 60 and older are covered by the Renta Dignidad, or Dignity Pension Programme (RDP), receiving monthly payments of 193.65 BOB.

Mandatory Leave Entitlement in Bolivia

The annual leave entitlement in Bolivia is 15 days for a full time worker. These can include public holidays on top of that or within those days, which would otherwise be unpaid.

Public Holidays In Bolivia

Bolivia observes 13 national public holidays, in addition to state-specific public holidays that may vary:

Paid Time Off in Bolivia

In Bolivia, annual paid leave is typically stipulated in the employment contract, starting at a minimum of 15 days after one year of service, increasing to 20 days after 5 years, and 30 days after 10 years of employment, in addition to public holidays.

Maternity Leave In Bolivia

Pregnant employees in Bolivia receive 90 days of paid maternity leave, with 45 days taken before the due date and the remaining 45 days after. Initially, the employer pays 100% of the national minimum wage, later reimbursed at 90% by Social Security.

Paternity Leave In Bolivia

Fathers in Bolivia have the right to mandatory paid paternity leave, with a duration of 3 days.

Parental Leave In Bolivia

There is no separate, additional parental leave policy beyond maternity and paternity provisions in Bolivia.

Sick Leave In Bolivia

In Bolivia, employees receive 26 weeks of paid sick leave annually and must submit a medical certificate within 48 hours of the initial illness. The employer covers the leave at 100% of the regular pay rate, with Social Security reimbursing 75% of the rate starting from the 5th day of sickness.

Termination Process in Bolivia

Acceptable terminations in Bolivia include:

• Voluntary employee resignation
• Terminations with cause (intentionally-caused damage of work instruments, disclosure of company privacy, total or partial breach of agreement, employee theft or robbery)
• Contract expiration

Notice Period in Bolivia

Per Bolivian labour law, there isn't a required notice period.

Severance in Bolivia

In Bolivia, severance pay is obligatory and varies based on the type of termination. It generally amounts to one month's regular salary for each completed year of service.