Employer of record in Chile: costs, rules and how to hire

Chile has no ordinary probation period, so the first three months carry the same termination rules as the third year.

Agree and register the employment terms

The written contract should identify the parties, role, workplace, start date, pay and payment period, hours, duration and other agreed terms. The general writing deadline is 15 days after the employee joins, reduced to five days for specified work or contracts shorter than 30 days. Separately, register the contract with the labour authority within 15 days of its conclusion, and for an EOR hire agree and sign the terms before the start.

Workers have the right to organise under the Labour Code, and where a collective instrument covers the employee, an individual contract cannot reduce the remuneration, benefits and rights it provides. Ask the employing entity to identify applicable collective terms before setting pay, hours, benefits and exit provisions, and to explain how it handles representation and employee concerns. Do not assume one national agreement applies to every Chilean hire.

Choose the right contract

The ordinary fixed-term limit is one year, or two years for managers and people with qualifying professional or technical higher-education credentials. A second renewal, or continued work with the employer's knowledge after expiry, makes the contract indefinite, and repeated contracts can also create an indefinite-employment presumption. A genuine project contract is a separate arrangement and cannot be used to divide permanent work into artificial stages.

For an ordinary private-sector hire, do not treat the first one or three months as a period in which employment can be ended without the usual rules, because the Labour Code's general termination grounds apply from the start. A fixed-term assessment contract must meet the fixed-term rules and does not remove pay, leave or contribution rights. Special categories such as domestic work have their own rules.

Part-time contracts under the Labour Code cover schedules of no more than 30 hours a week, and the employee keeps the other statutory employment rights. The minimum base salary and the legal-gratification cap can be proportionate under the applicable rules. Ordinary daily work must be continuous, subject to the permitted meal break, and cannot exceed ten hours. Do not assume every schedule below 42 hours permits a proportional minimum wage.

Check the actual relationship and workforce

The Labour Code treats paid personal services performed under an employer's dependence and direction as employment, and those facts can establish an employment contract even when the document is called a services agreement. Check supervision, hours, duties and independence before engaging a contractor, because invoicing or working remotely does not by itself remove employee rights.

An employer with more than 25 workers generally needs at least 85% of its workforce to be Chilean, counted across its Chilean operations rather than each branch separately. Specialist technical personnel are excluded, and the law treats certain foreign workers with Chilean family links or more than five years of residence as Chilean for this calculation. Ask the EOR to check its actual workforce and the statutory exceptions.

Record remote-work and ownership terms

The contract or addendum should specify the remote or hybrid arrangement, work location, duration, supervision, working-time treatment and disconnection period, and the arrangement must be registered electronically with the labour authority within 15 days. The employer provides necessary equipment and bears operation, maintenance and repair costs, and cannot require the employee to use personal equipment. Workplace risk information and training remain necessary.

Chile distinguishes employment inventions, software and other creative work. INAPI explains that inventions arising from agreed inventive duties generally belong to the employer, subject to the law and contrary terms, while inventions outside those duties can have different ownership or extra-payment rules, and employment software has its own default rule. With an EOR, document the rights or licences your business needs, including any transfer from the employing entity, rather than assuming that paying for all work automatically makes your business its owner.

Misclassification risk, and why remote work is not a defence

Chile looks at dependence and direction, and it has closed off the two arguments hirers reach for first. The Labour Code treats paid personal services performed under an employer's dependence and direction as employment, and those facts can establish an employment contract even where the document is called a services agreement. Source: the approved Chilean contractor-status guidance, Labour Code via dt.gob.cl, checked 18 September 2026.

The closing line of that guidance is the one to remember: invoicing or working remotely does not by itself remove employee rights. Neither an invoice nor a home office is evidence of independence, and both are routinely presented as though they were. Source: the approved Chilean contractor-status guidance, checked 18 September 2026.

What a hirer does about it: check supervision, hours, duties and independence before engaging a contractor, and be honest that a remote full-time role reporting to your manager is a job. I have not found a Chilean government source in our registry setting out the penalty schedule, so I am not quoting one.

Three of the six rows below changed during 2026, which is why an older quote is worth re-pricing rather than re-reading.

Check these points before signing

Ask the provider to answer each of these against the actual employer, employee and start date.

The sections below explain the practical consequences and link the supporting evidence.

The ordinary employer load is 6.83% of covered pay, which is low by Latin American standards, and the pension part of it rose only last month.

Budget above the employee's gross pay

From August 2026, the employer pension contribution is 3.5% of covered pay, including the SIS funding within that contribution. For an ordinary indefinite contract, add 2.4% unemployment insurance, 0.9% basic occupational accident cover and 0.03% SANNA, plus any additional risk rate. These components total 6.83% when the same pay is below the relevant ceilings, while benefits, gratification, EOR fees and exit costs are additional and special cases need their own calculation.

Example: CLP 1,000,000 covered monthly pay

This example assumes an ordinary indefinite-contract employee whose pay is fully covered and below each contribution ceiling.

Salary plus those items is CLP 1,068,300. This partial example excludes additional accident contributions, gratification and its charges, benefits, EOR fees and potential exit costs, so request a quote using the full compensation package.

Apply the right deductions and ceilings

An ordinary employee contributes 10% of covered pay to pension savings, plus the AFP's administration commission, and 7% to statutory health coverage, while a covered indefinite-contract employee also pays 0.6% unemployment insurance. Apply each scheme's ceiling and the employee's status, because private health-plan costs can differ. The employer's pension and other employer charges are separate from these deductions.

For covered indefinite employment, the employer pays 2.4% and the employee pays 0.6% of covered pay, while for fixed-term or project work the employer pays the full 3%. The 2026 monthly ceiling is 135.2 UF. After 11 years in the same employment relationship, the individual-account contributions stop under the scheme's rules, while the employer continues the 0.8% solidarity-fund contribution. Check exclusions and the actual contract history.

The employer's basic occupational accident contribution is 0.9% of covered pay, with an additional rate depending on the activity and the employer's assessed accident record, and SANNA adds a separate 0.03% contribution. Ask for the employer's current assessment and the applicable contribution base rather than assuming an office role always has no extra risk charge.

The pension regulator's final 2026 monthly ceilings are 90.0 UF for pension, health and occupational accident contributions, and 135.2 UF for unemployment insurance, applying from February 2026 remuneration and superseding the provisional amounts announced in January. UF is an indexed unit, so the peso equivalent changes and the payroll calculation must use the applicable conversion and scheme rules.

Use September's income-tax table for September payroll

Employment income tax is progressive and the thresholds move with the monthly UTM, so the table has to match the payroll month.

For September 2026 monthly payroll, taxable income up to CLP 968,233.50 is exempt and higher bands use marginal rates from 4% to 40%, together with the table's deduction amounts. The base is generally remuneration less qualifying employee pension and health deductions. Payroll must also apply the deduction amount for the relevant band, and these marginal rates are not a flat percentage of the employee's gross salary.

Keep payment dates and records clear

Social contributions generally fall due by the tenth of the following month, with the applicable next-working-day rule when that date is a weekend or holiday, and electronic payment generally extends to the thirteenth, including weekends and holidays. Check the provider's bank cut-offs and confirm payment receipt. These are contribution deadlines rather than a universal deadline for paying the employee's salary.

Give the employee a payslip showing the amount paid, how it was calculated and the deductions, and where pay includes commissions or incentives the required annex should explain the underlying operations and calculation. Keep the contract, hours, leave, tax and contribution records, and agree how your team can verify that the EOR has paid the employee and the relevant institutions.

Chile has two statutory minimum wages rather than one, and legal gratification is a real annual cost rather than a discretionary bonus.

Set pay above the applicable minimum

The labour authority gives a standard adult monthly minimum of CLP 553,553 from 1 May 2026, and a separate CLP 412,938 rate for workers under 18 or over 65. Check the employee's category, working hours and any higher contractual or collective floor. This is a monthly amount in Chilean pesos rather than a dollar figure or an estimate of total employer cost.

Use the income survey as context

Chile's INE reported mean monthly net labour income of CLP 962,945 and median income of CLP 680,000 in its 2025 survey, published in July 2026. The survey covered employed people during October to December 2025, and net means gross income less pension and health deductions. It is not a September 2026 gross salary or a quote for a particular role, so compare occupation, seniority and location before setting an offer.

A national income measure does not tell you what to offer a software developer, sales representative or operations assistant. Compare the role, experience, location and working hours, and keep the gross salary offer separate from survey net income.

Agree payday and gratification

The employment contract sets payday and the pay period, which cannot exceed one month, and there is no general rule that every employee must be paid by the tenth of the next month. Pay is in legal currency, with electronic transfer to the employee's bank account permitted at the employee's request and without cost to them. Provide an itemised payslip with the calculation and deductions.

Qualifying profit-making employers that keep accounting records and earn profits must provide statutory gratification. The Code provides a profit-sharing method of at least 30% of qualifying net profits, allocated under its rules, and an employer can instead use the article 50 method of 25% of the employee's relevant annual remuneration, capped at 4.75 monthly minimum wages. Confirm the chosen method and any advances, and check whether holiday bonuses are due under the contract or collective terms.

Annual leave is 15 working days and Saturdays do not count towards it, which makes the entitlement closer to three calendar weeks than it first appears.

Plan paid annual leave

After more than one year of service, the general entitlement is 15 working days of paid annual leave, rising to 20 working days for work in Magallanes, Aysén and Palena province. Additional progressive leave can arise after ten years of work and each further three years. Keep at least ten working days together, and note that splitting the remainder and carrying leave forward require agreement within the legal limits.

Saturdays do not count for annual leave. The statutory rules also cover progressive leave, scheduling and payment of unused or proportional leave when employment ends.

Use the 2026 holiday calendar

The government lists 16 national holidays in 2026, with additional local holidays in Arica and Parinacota, and in Chillán and Chillán Viejo. The September national holidays are Friday 18 and Saturday 19 September. New Year's Day, Labour Day, both September holidays and Christmas have special non-waivable rules for covered commerce employees, with statutory exceptions, so apply the calendar and rest rules for the employee's workplace and activity.

Local dates include 7 June in Arica and Parinacota, and 20 August in Chillán and Chillán Viejo. Check the actual workplace and any special rule before setting the employee's calendar.

For activities legally allowed to work on Sundays and holidays, hours attract overtime pay when they exceed the ordinary weekly schedule, and compensatory rest also applies. Employees in the specified customer-facing commerce and service category receive at least a 30% premium for ordinary Sunday hours. Mandatory non-waivable commerce holidays have separate exceptions and rest rules, so do not apply a universal 100% holiday premium to every hire.

Follow the medical-leave process

An ordinary sickness subsidy requires authorised medical leave and the relevant insurance conditions, which for general dependent employees include six months of affiliation and normally 90 contribution days in the preceding six months. A certificate lasting 11 days or more pays from day one, while one of ten days or fewer normally pays from day four, and consecutive certificates for the same diagnosis can be combined. The subsidy uses a statutory net-pay calculation rather than an automatic employer-paid gross salary for every absence.

Plan maternity, parental and birth leave

Four entitlements make up the family-leave picture.

The ordinary maternity entitlement is six weeks before birth and twelve weeks afterward, with statutory subsidy rules, and pregnancy-related illness, a late birth and medical complications can extend leave. Birth before the 33rd week of pregnancy or birth weight below 1,500 grams can give 18 postnatal weeks, and multiple births have a separate extension. Confirm the medical certificates and benefit calculation rather than promising every employee uncapped gross salary.

After ordinary postnatal leave, the employee generally has twelve weeks of postnatal parental leave with the statutory subsidy, and a qualifying return for half the working day extends this to eighteen weeks, with half the subsidy and the relevant pay. The law provides notice requirements and allows the working mother to transfer part of the leave to the working father from the seventh week. Agree the dates and payroll treatment before leave begins.

The father or non-gestational parent has five paid days for a birth, which can run from the birth, excluding weekly rest days, or be distributed within the first month, and qualifying adoption cases also receive this leave. It is separate from any postnatal parental leave transferred under the statutory process, and cannot be waived. Confirm the employee's actual working days when setting the dates.

Under the current Labour Code, qualifying judicial care or adoption can give postnatal parental leave, and when the child is under six months a preceding twelve-week leave and subsidy can also apply. Law 21,760 changes adoption-related rights, but its commencement depends on specified regulations and accreditation steps. Check those conditions and the court order for the actual case before applying the broader future entitlement.

Account for other family rights and benefits

Marriage or a civil union gives five continuous working days of paid leave. Bereavement leave is ten calendar days for a child, seven calendar days for a spouse or civil partner, seven working days for a child who dies during gestation, and four working days for a sibling or parent. These rights are additional to annual leave, and other medical, caring and emergency permissions have their own evidence and notice rules.

An employer with at least 20 female employees generally has the statutory nursery obligation for eligible children under two, including permitted payment arrangements with an authorised nursery. Separately, employees covered by the child-feeding right have at least one paid hour daily for a child under two, even where the employer does not owe nursery provision, and the law allows qualifying use by the father or another carer. Confirm the employer's workforce and the family's circumstances.

Budget for statutory contributions, paid leave, applicable gratification, childcare duties and remote-work equipment, then confirm any meal allowance, transport allowance, supplementary health insurance, holiday bonus or extra leave promised in the offer or collective terms. List eligibility, amounts and payment timing. These extras should not be described as identical mandatory benefits for every private-sector employee.