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Chile's legal framework for employment, including distinct categories of labor agreements and mandatory written employment contracts, ensures clarity and compliance in the hiring process.
With a workforce of around 8.8 million people, Chile provides access to a considerable talent pool for international employers.
Despite its relatively small size, Chile boasts the fourth largest GDP in South America, indicating economic stability and growth opportunities.
Chileans are known for being friendly and hospitable, making it easier for foreign employers to integrate into the local business culture.
When it comes to employment in Chile, there are three main types of agreements: individual contracts, collective contracts, and special contracts (like apprenticeships). Collective contracts set general employment terms, but the actual job relationship begins with an individual contract, which can be either permanent or temporary. As per Chilean Labor Code Article 10, the agreement needs to cover basics like:
The labor laws don't set strict rules for how long an employee's probation period should be. Typically no more than 12 months for employees with fixed contracts, the entire contract period is considered a probationary period.
The standard maximum working hours per week are 45, spread across five or six days but commonly 9 hours, observed from Monday to Friday.
Employees can work up to two extra hours a day or ten extra hours a week. For this overtime, they get paid 50% more than their regular salary for that day.
The minimum wage for full-time workers is currently CLP 460,000. The law outlines gradual increases, and by July 1, 2024, the minimum wage is set to reach CLP 500,000.
Chilean labor law doesn't have specific provisions for 13th salaries.
Individual income tax in Chile is calculated based on progressive rates ranging from 0% to 40%. The tax is applied to monthly income, and 1 Monthly Tax Unit is equivalent to approximately 51,500 CLP.
Employees are required to contribute 10% to their pension. Getting the old-age pension is a choice, not a must. To qualify, employees need to be 65 (for men) or 60 (for women) and be part of AFP (Administradoras de Fondos de Pensiones).
The tax-related information provided in this guide is intended for general guidance and informational purposes only. Reach out to our dedicated team for insights on remote hiring in Chile tailored to your needs.
To terminate an employee in Chile, a valid reason must be determined. According to the law, acceptable reasons for termination include:
According to the law, the notice period for termination is one month. However, it's common for the notice period to be skipped, and instead, payment is made in place of the notice.
If an employee has worked for a year or more, they get severance pay. For each year up to 11 years, they get one month's salary. After the first year, they earn an extra month of severance pay if they have worked for at least half of the following year
Public holidays that fall on the weekend are usually forfeited.
Legal and compliance experts are readily available to provide guidance and case-by-case Q&A support.
By leveraging dedicated support from in-house legal and compliance experts for case by case questions and more.
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