General Overview & Economic Facts
- Chile is a long, narrow country located on the southwestern coast of South America. With a population of over 19 million people
- Despite its small size and population, Chile has one of the highest levels of income per capita in Latin America. In 2020, its GDP per capita was around $15,000
- Chile’s economy is highly dependent on exports, particularly copper, which makes up over 50% of the country’s exports. Other important exports include fruit, fish, and forestry products
Why Employ In Chile?
- Companies earning profits in Chile are required to give all employees an annual statutory bonus in addition to their base pay
- Chile is among the most industrialized countries in Latin American and some of its key industries include mining (copper, coal and nitrate), manufactured products (food processing, chemicals, wood) and agriculture (fishing, viticulture and fruit)
- The country has a well-developed financial sector, including a highly regarded pension system and a sophisticated stock market. The Santiago Stock Exchange is one of the largest and most important in the region.
Overview Of The Labour Law
- The labor law in Chile can be considered relatively stringent compared to some other countries, as it provides a wide range of protections and benefits for workers. For example, it sets minimum wage levels, limits the number of working hours per day and week, mandates vacation time, and requires employers to provide social security benefits to their employees. However, some critics argue that the law could be more robust in protecting workers’ rights, particularly with regards to the enforcement of labor standards and the treatment of migrant workers. In recent years, there have been calls for reforms to strengthen labor protections and address issues such as discrimination, unequal pay, and precarious work arrangements
- The labor law in Chile is generally balanced between the interests of employers and employees, with provisions designed to protect the rights of both parties. For example; The Labor Law requires employers to have just cause for terminating employees and provides for severance pay in certain cases of termination. At the same time, the law also recognizes the rights of employers to manage their businesses and make decisions regarding hiring, promotion, and termination. Employers are also allowed to engage in collective bargaining and other forms of negotiation with their employees
Fun Country Facts
- Chile is the longest country in the world from north to south, stretching over 4,300 km (2,670 miles) along the western coast of South America
- The Atacama Desert in northern Chile is considered one of the driest places on earth, with some areas having not received rainfall in over 400 years
- Chile is home to the largest swimming pool in the world, located in the resort town of Algarrobo. The pool is over 1,000 meters (3,300 feet) in length and contains 250 million liters (66 million gallons) of water
- The national dance of Chile is the cueca, which is performed during celebrations and festivals throughout the country
- The Chilean peso is one of the few currencies in the world that features a woman on its banknotes. The current series of banknotes features famous Chilean poet Gabriela Mistral on the 5,000-peso note
Why Use Playroll Services For Chile?
- Employing in Chile requires companies to have their own legal entity in the
country as well as to manage payroll, employee benefits, taxes and legal compliance.
This can get quite complicated, especially with the complexity of employment laws in
Unemployment Insurance (SANED)
Calculated on the employees growth monthly salary with a maximum of 122,60
Employees with indefinite contracts
Employees with fixed term contracts
Miscellaneous Serviapp costs
Occupational Accident and Disease Insurance
Additional rate ranging from
0 – 3,4%
Family allowance Insurance coverage for working parents (Fondo SANNA)
Maximum salary 81,60
Calculated per employee monthly. Finances insurance coverage for working parents of sons and daughters over 1 year of age and under 15 or 18 years of age, as applicable, that have a serious health condition.
Labour standards annual bonus accrual
Unemployment insurance fund
Pension (individual saving insurance)
Medical (health insurance)
- Over 18 and under 65 = 410 000,00 per month
- Maximum = 10,00 hours (p/d)
- Maximum = 45,00 hours (p/w)
- Average working hours a day comes out to be 7.5 hours.
- Sundays will be a holiday. Rest days will begin at the latest at 9:00 p.m. on the day before Sunday or a holiday and will end at 6:00 a.m. the day after, except for time changes that occur due to the rotation of work shifts.
- Minimum = 30,00 minutes
- Breastfeeding Breaks
The employees will have the right to have at least 1 hour a day, to feed their children under two years of age. The time consumed for the purpose of breastfeeding shall be considered as working time and cannot be in any case, waived by the employees who have children under the age of 2 years old.
- Maximum = 2,00 hours p/d
- No more than 2 overtime hours per day). Overtime must be paid with a 50% surcharge.
Public holidays 2023
17 public holidays
- Jan. 1: New Year’s Day
- Good Friday
- Holy Saturday
- May 1: Labor Day
- May 21: Navy Day
- Closest Monday to June 29: Holiday of St. Peter & Paul
- July 16: Holiday of Our Lady of Mount Carmel
- Aug. 15: Holiday of the Assumption of Mary
- Sept. 17-19: National holiday, Army Day and Independence Day
- Closest Monday to Oct. 12: Columbus Day
- Closest Friday to Oct. 31 (unless the date falls on a Thursday): Reformation Day
- Nov. 1: All Saints’ Day
- Dec. 8: Holiday of the Immaculate Conception
- Dec. 25: Christmas
- Dec. 31: bank holiday (typically a shortened workday but not a full holiday in other sectors)
Paid Leave / Vacation Days
- maximum = 15 days
- The holiday cannot be compensated in money. Every employee, with ten years of work, for one or more employers, continuous or not, will be entitled to an additional day of holiday for every three years worked, and this excess will be susceptible to negotiation via individual or collective agreement.
- Vacation time can be accrued for up to 2 consecutive years.
- An employer whose employee has accumulated 2 consecutive years of holidays, must grant at least half of the holiday before completing the year that entitled the employee to a new period.
- Medical exam leave – Maximum p/a = 0,50 (days)
- Vacation leave – maximum p/a = 0,50 (days)
- No annual limit on the number of days of sick leave that an employee can take. Depend on the medical license extended by the doctor.
- 3 days or less of sick leave = no paid leave.
- 4 – 10 days of sick leave = paid leave
more than than 10 days of sick leave = paid leave
- Female employees over 40 years of age and and male employees over 50 years of age who are employed for a term greater than 30 days have the right to half a day’s leave, once a year during the term of the employment relationship, to undergo medical examinations. Considered as hours worked by an employee, and permits for such leave cannot be compensated in money even after the termination of employment.
- In the cases of public vaccination programs or campaigns for the control and prevention of communicable diseases, all employees shall be entitled to half a day’s leave for vaccination.
- Minimum (p/a) = 18 weeks paid leave
Taxable Statutory Maternity Pay
- 100% of gross monthly income
- 5 days paid leave
Taxable Statutory Paternity Pay
- 100% of regular pay
Family Responsibility Leave Bereavement Leave
- Minimum (p/a) = 7 days
- There is one-month tenure protection for employees who suffer the death of a child or spouse beginning from the date of death.
Family Care Leave
- Minimum p/a = 10 days paid leave
- Minimum p/a = 5 working days paid leave
- 1 year of unpaid adoption leave.
- If the minor is less than 6 months old the parent is entitled to an allowance for adoption for a period of 12 weeks.
Short term care leave / Childcare leave
- Employee mother with a child under 1 year of age dealing with serious illness allowed to take leave and allowance in cases of prenatal, postnatal, and paternal postnatal leaves, during the period prescribed by the health service. Mother can decide to take this leave or give it to the father.
- Employee with a child older than 1 year and below 18 years, who has suffered from a serious accident or life-threatening illness = paid leave of absence for the number of hours equivalent to 10 working days per year, distributed at the employee’s choice in full, partial or combined days.
- 30 days
- Employer can produce an immediate termination,
without notice requirements. Other terminations require 30 days’ notice. Immediate terminations are allowed as well, if paying a severance in lieu of notice (1 month capped remuneration).
Severance Pay (for each full year employed)
- Pay due = 1 months salary
- If there is no agreement on this matter or if the agreed amount is lower than the legal severance pay, the legal severance must be paid.
- May not exceed 11 months; that is, 11 years of rendered services; and the amount of the remuneration for this purpose may not exceed 90 UFs.
- No probationary periods, except for a two-week term for domestic workers.
- Companies must distribute 30% of net profit to the employees, calculated in proportion to the employee’s salary.
- The employer may pay a bonus of 25% of the yearly salary, but the bonus cannot exceed 4.75 monthly minimum wages.