Date Format

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2.40% - Unemployment Insurance
0.95% - Occupational Accident
10.00% - Pension Plan
0.60% - Unemployment Insurance
7.00% - Health Plan
0.00% - 634,756.50
4.00% - 634,756.5 - 1,410,570
8.00% - 1,410,570 - 2,350,950
13.50% - 2,350,950 - 3,291,330
23.00% - 3,291,330 - 4,231,710
30.40% - 4,231,710 - 5,642,280
35.00% - 5,642,280 +

Minimum Wage


Minimum wage in Chile 301,000 CLP/month


Payroll Cycle

All companies have their own payroll and benefit structure. Payments however must be made at least monthly.

Working Hours


A full work week in Chile is 45 hours.  The employer has the right to extend the day by no more than 2 hours a day, or 10 hours a week. 


Overtime is calculated at 150% of normal hourly wages

Payroll Contributions

Social Security

Employers are required to contribute 3.35% of wages. Employee contributes equal to 17.6% of their salary.

Pension Fund

In Chile, 10% of the gross salary is deducted for the purpose of pension. It is not mandatory for the employer to contribute to the pension.   

Health Insurance

In Chile, the employee is obligated by law to contribute to a private health insurance scheme called “Isapres” with a cap of 2,200,000 CLP per month.  Anything more than this amount is considered supplemental and is deducted from the employee’s net salary after tax. 

Unemployment Insurance

In the event that the employee is terminated, the employee is entitled to withdraw the contributions made to unemployment. 


Maternity Leave

In Chile, the woman is entitled to 30 weeks of paid maternity leave, divided by 6 weeks before the birth and 24 weeks after and is paid by health insurance.

During the pregnancy, the woman is not required to participate in activities that would endanger her health (i.e. heavy lifting). If this is a requirement of the job, the employer must reassign her to a different position during her pregnancy without pay reduction.    

Paternity Leave

Fathers are entitled to 5 days of paid paternity leave.

After the 7th week of birth, the mother can opt to transfer some or all of her maternity leave to the father. 

Parental Leave

Female employees are entitled to 10 days of parental leave for a child under the age of 18.  While the employee is entitled to be paid, they must make up the time taken off at a later date. 


Termination Process

In order to terminate an employee, the cause must first be decided.  By law, the following reasons are valid reasons for termination:

  • Mutual agreement, resignation, or expiration of a contract
  • Breach of contract (employer must be able to provide proof)
  • Company needs or reorganization (most common reason for the dismissal of an employee)

The employer must prepare a letter for the employee stating the cause for termination as well as the effective date and it must be signed in person by the employee or sent by certified mail to their home address.  In addition, the same letter must be filed with the Chilean Labor Ministry.  It is common that the employee be notified on the last day or work. 

After the termination letter is given, the employer must prepare a severance agreement which must include the cause for termination as well as the amount that will be paid out to the employee.  The severance agreement must be signed within 10 days of the termination. 

In the case of a mutual agreement, both parties must sign a document acknowledging that both parties have agreed that the employment contract is terminated.  A severance agreement must also be signed w ithin the first 1-2 weeks following the termination date.   


Notice Period

Notice period is 1 month by law.  It is common that the notice period is waived and payment is made in lieu. 

Severance Pay

If the employee has completed at least 1 year of employment, they are entitled to severance pay.  For every year of service up to 11 years, the employee is entitled to 1 month’s salary. In addition, after one year of employment, the employee accumulates an additional month of severance pay if they have worked for at least half of the following year. 



19% standard rate.