Hiring in Chile: Complete Guide 2027
Everything you need to know about hiring and managing employees in Chile
Overview
Chile is the cheapest country in South America to carry an employee. From August 2026 pay the employer owes about 6 to 7% of gross: 3.5% under the Ley 21.735 pension reform, 2.4% unemployment insurance to the AFC and 0.93% accident cover through a mutual such as ACHS. The employee carries 18 to 19%: 10% to the AFP plus its commission, 7% health, 0.6% to the AFC. The Código del Trabajo collects on exit instead: dismissal only on a listed ground and 30 days of severance per year of service. An EOR runs those steps; its quote must say which year's employer rate it uses.
Currency
Primary Language
Payroll Tax
Pay Frequency
Overview
Employer Costs
Employer Social Contributions
Mandatory Benefits
EOR Service Fee
Total Additional Cost
Employee Deductions
Income Tax
Employee Social Contributions
Mandatory Employee Benefits
PAYROLL & SETUP
Setting Up Payroll in Chile
Chilean payroll runs monthly. The employer needs a RUT and an "inicio de actividades" at the SII, registers contracts with the Dirección del Trabajo, affiliates with the AFC and a mutual, and pays contributions through Previred every month. Employee deductions in 2026: 10% to the AFP plus its commission, 7% health to Fonasa or an Isapre, 0.6% unemployment insurance on indefinite contracts, up to a UF ceiling republished each January. Employer items from August 2026 pay: 3.5% under Ley 21.735 (2.5% of it to the new Seguro Social Previsional, which absorbs the 1.62% SIS), 2.4% AFC on indefinite contracts (3% on fixed-term, ceiling 135.1 UF) and 0.93% to the mutual plus a risk surcharge. The rate climbs each August to 8.5% in 2033. Minimum wage: CLP 553,553 since 1 May 2026 (Ley 21.830). Income tax is withheld monthly: exempt up to 13.5 UTM, about CLP 970,000, then 4% to 40% above 310 UTM. The EOR files all of it.
Key Labor Laws &
Requirements
Employment Contracts
- Written contract within 15 days of the start date
- No statutory probation; fixed-term up to 1 year does that job
- 42-hour week since April 2026, 40 hours from April 2028
Leave & Time Off
- 15 working days of annual leave after one year
- Maternity 6 weeks before and 12 after birth, paid by the state
- 15 to 16 public holidays a year
Termination Rules
- Only the grounds in articles 159, 160 and 161
- 30 days' notice plus 30 days' severance per year, capped at 11 years
- Finiquito signed before a notary or the Inspección del Trabajo
COMPLIANCE
Dismissal Grounds and Severance Compliance in Chile
Chile has no at-will dismissal and no statutory probation. A contract ends only on a ground in articles 159, 160 or 161 of the Código del Trabajo. The one an employer can invoke on its own judgement, "necesidades de la empresa" (article 161), costs 30 days' notice or pay in lieu plus severance of 30 days' pay per year of service, capped at 11 years and at 90 UF a month; a court that finds the ground unjustified adds 30%. Fixed-term contracts do the probation job: up to one year, two for degree holders, and a second renewal makes them indefinite. The finiquito is signed before a notary or the Inspección del Trabajo with contributions paid up to date, since unpaid contributions void a dismissal (Ley Bustos).
Key Challenges
- Employer pension contribution rises every August until 2033 (Ley 21.735)
- No statutory probation period
- Severance of 30 days' pay per year of service, capped at 11 years
- The finiquito must be signed before a notary or the Inspección del Trabajo
- 85% of staff must be Chilean once a company passes 25 employees
Country Highlights
Advantages
- Employer on-costs of about 7% of gross, the lowest in the region
- 42-hour week since April 2026, 40 hours from April 2028
- OECD member with a stable peso and electronic contract registration
- Santiago talent in fintech, mining technology and software
- Time zone one hour off the US East Coast for most of the year
Popular Industries & Roles
Technology
Avg. Salary: CLP 30M-CLP 60M
Santiago's software and fintech firms hire engineers for the whole Spanish-speaking market, with Start-Up Chile behind more than a decade of founders
Mining & Energy
Avg. Salary: CLP 36M-CLP 72M
Copper and lithium make Chile the world's largest copper producer; mining engineers, geologists and plant managers sit at the top of the pay scale
Financial Services
Avg. Salary: CLP 28M-CLP 55M
Santiago's banks, AFPs and insurers run the deepest capital market in the region relative to GDP, with risk, data and compliance roles in demand
Top 3 Providers in Chile
Based on our analysis of pricing, compliance record, service quality, and customer reviews
Rivermate
- Human-first EOR from $319–$639/month by country
- G2 #1 for Ease of Use and Best Support
- 180+ countries, 38 owned entities (Hightekers)
- 24/7 real experts via Slack and WhatsApp
Deel
- EOR in 130+ countries; owned entities in 120+
- Contractor and EOR in one platform
- 300+ integrations including Slack, Workday
- AI-powered compliance automation
Serviap Global
- Merged into Rivermate on 28 April 2026
- Pricing historical: was from $399/month
- LATAM EOR founded in Mexico City in 2010
- Existing contracts continue under Rivermate
Frequently asked questions
Hiring in Chile through an EOR, in short.
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How much does an employer pay on top of salary in Chile?
Employer contributions in Chile come to ≈6.8%; the largest mandatory line is Pension 3.5%. With the other statutory benefits and a typical EOR fee, budget ~15–30% on top of gross salary.
What does an EOR charge per employee in Chile?
Published EOR fees in Chile run $400–700/mo per employee per month, with any setup fee negotiated separately. The fee is flat, so it weighs less as the salary rises.
What does an employee in Chile pay in tax and contributions?
Income tax is 0–40% progressive and employee social contributions are ≈18–19% (10% pension), both withheld by the employer on every pay run.
How long does it take to hire through an EOR in Chile?
3-7 Days once the employee's documents are in. The contract is issued by the EOR's local entity and payroll runs on the local cycle (Monthly).
Which EOR providers rank best in Chile?
Rivermate, Deel and Serviap Global hold the first three places in our ranking for hiring in Chile. The full top 10, with the questions to put to each provider before signing, is here: Top 10 EOR providers in Chile.
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