Global PEO Services (GPS) helps companies hire employees in Chile without establishing a legal entity. All human resources, benefits, payroll, and tax needs for the employees are managed by the Global PEO, while the new hires and headquarter teams focus on your business goals.

When hiring employees in Chile, establishing a subsidiary or branch office is not always the best route, as it’s often a lengthy and expensive process. Hiring via a Professional Employer Organization (PEO), or Employer of Record (EOR), is a faster and often more effective option – especially when starting up in a new country.

Global PEO Services hires the employees on your behalf, legally contracting them through our subsidiary in accordance with Chilean labor laws. As a result, the burden of compliance is on us and the employees can begin work for your company in a matter of days. PEOs/EORs provide you with a streamlined option for hiring employees, testing markets, and responding to growing business needs in Chile. With Global PEO Services, you get control without taking on legal entity liabilities, contractor risks, or sacrificing on talent or speed to market.

Country Overview


Chile is one of the stable and high-income economies in South America that offers a favorable investment climate for foreign companies. The domestic and foreign enterprises operate as equals in the country of which 60% GDP is generated through foreign trade (imports and exports). Chile’s openness to transparent regulatory environment, global trade and investment, and strong rule of law provide a sound foundation for economic dynamism. The Global Competitiveness Report places the country significantly above some of the Latin American giants such as Brazil and Argentina. A transparent regulatory system in Chile is further bolstered by secured property rights and provides commercial security to the private sector.

Currency: Chilean Peso

Principal Language: Spanish

Government: Democratic Republic

Capital City: Santiago

Major Cities: Santiago, Concepción, Valparaíso, Viña del Mar

Employment Contracts

The Labor Code mandates that employees and employers agree to a written employment contract. An employment contract needs to contain the following minimum provisions:

  • The date and place of the contract
  • Name and nationality of the employer and the employee
  • Amount of remuneration
  • Date of employment commencement
  • Nature of the services that the employee will provide
  • Method and period of remuneration
  • Duration of the contract, and
  • Work schedule.

Work/Time Regulations

The maximum allowed workweek in Chile is 6 days or 45 hours. Work is usually prohibited on Sundays and holidays other than essential services and few other exceptions. If employees work on a Sunday, they receive a wage premium of 30%.

The law mandates a 30-minute break in the workday. These limitations on hours worked do not apply to managers, administrators, directors, domestic workers, and those who telecommute.

Overtime Rules
The rate of overtime pay is 150% of the standard hourly wage and must be paid when the work beyond 8 hours of per day or 45 hours per week is performed. The total work time that a worker is allowed to work in a day, including overtime, should not be more than 10 hours.



Chile observes the following 15 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. 18-19: 2 national holiday and Army Day (moved to Monday and Tuesday or Thursday and Friday if one of the days falls on Wednesday)
  • 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 (generally a curtailed workday but not a full holiday in other sectors)

States and territories can declare additional holidays or substitute one or more in the above list. Companies authorized to work on holidays must give compensatory off to employees or pay overtime.

Annual Leave
Employers provide paid annual leave of 15 days to most workers who have completed at least 1 year of service, although employees who work in Chile's 11th or 12th regions, and in the province of Palena in the 10th region, are entitled to 20 days of vacation. Employees who have completed 9 months of service, but not yet a full year, qualify for 11.3 days of paid leave. Employees who have worked 10 or more years for one or more employers are entitled to an additional day as an annual leave in every 3 years of employment. Annual leave must include at least 10 consecutive days. Unused leaves can be carried over for up to 2 years and may get encashed as mutually agreed by an employer and employee.

Maternity Leave
Female employees get maternity leave of 6 weeks before the expected date of childbirth and 12 weeks after delivery, paid from a government or private healthcare insurance fund. Depending on the child’s condition, the leave may be extended to 18 weeks. Further leave of 7 days for an additional child is provided for multiple births. Leave can be extended for up to 1 year in case of serious health conditions and both the parents can split it between them. The same leave policies apply for adoptive parents. Maternity leave can get extended up to a year for serious health conditions and can be split between the mother and the father.

Paternity Leave
Men are entitled to receive 5 days of paid leave for the birth or adoption of a child. In case the mother dies at the time of delivery, or when taking her maternity leave, the father can take her unused leave. The same leave policies are valid for adoptive parents. A worker who is the guardian or custodian of a child younger than 6 months may take up to 12 weeks' leave. The 12-week period can extend up to 18 weeks based on a part-time work agreement.

Sick Leave
Employees who have taken part in a government health insurance program for at least 6 months and made contributions for a minimum of 3 months are entitled to receive government-paid sick leave after they miss their fourth day at work. If the sick leave extends longer than 10 days, pay applies retroactively to the first day of missed work.

Employers may provide extra coverage if payments to the national health insurance are lower than workers’ remuneration.

Other Leave

Bereavement Leave
Workers get seven calendar days of paid bereavement leave from the date of death of a child or spouse. This leave is in addition to annual leave and may be taken regardless of time worked. There is a 1 month tenure protection for workers who suffer the death of a child or spouse commencing from the date of death.

Family Leave
Employees may take family leave to care for seriously ill or disabled children younger than 18 years. There is a special subsidized leave for mothers to care for an unwell child less than one-year-old, which is transferable to the child's father with the mother's consent.

Military Service or Training
Employees' jobs are guaranteed without losing seniority if they need to take leave for military service or training. Employers need to pay regular wages to reserve personnel called to service for less than 30 days.


Chile's social insurance system covers disability, old-age, and survivors’ pensions. Workers are eligible to request a basic state pension at age 65 (men) or 60 (women). Early retirement is possible for those who have accumulated sufficient amount before reaching the common retirement age and for those who have worked under strenuous conditions. Employees pay 10% of covered earnings for the old-age pension plus an average of 1.42% of earnings for administrative fees.

Those who work under harsh or arduous conditions need to contribute an additional 1 or 2% based on their occupation. Employers pay 1.49% in addition to 1 or 2% for employees who work under tough conditions. The employer contribution rate is 0.95% of covered payroll plus up to an additional 3.4% of covered payroll according to the industry and the assessed level of risk.

Unemployment Insurance
Chile has instituted a largely privatized system of unemployment insurance based on individual savings accounts (ISA) backed by the public Solidarity Severance Fund (SSF). The monthly contribution to the system is equivalent to 3% of covered wages. For employees under a fixed-term contract, the employer alone is responsible for contributions.

In the case of employees with open-ended contracts, the contribution is shared between employees (0.6% of monthly earnings, which is allotted wholly to the ISA) and the employer (2.4% of employees’ monthly earnings). The employer's contribution is allocated principally to employees’ ISA, with a small part paid to the SSF. In order to get the benefits, workers need to make minimum contributions of 52 weeks or 12 months in the previous 2 years.

Private Health Insurance
All workers have the option of enrolling in one of the private health insurance programs (ISAPREs) or with the federal health insurance program (FONASA). All employers must withhold and pay a percentage of enrolled employees’ taxable pay.

Employers with 1 employee or more must pay an ISAPRE unless their employees have elected to remain on the FONASA.

Rates and Thresholds
All employers must withhold 7% of workers’ taxable income. Computation of taxable income is a maximum of 113.5 developmental units. Evaluation of maximum computable income need to be on the last day of the month in which remuneration was paid (e.g., in December 2016, 113.5 developmental units = 2,990,495.73 Chilean pesos).

Taxable Amounts
Levy of the ISAPRE is on the total salary of employees.

Employers who do not declare or pay any of the social security costs will need to pay a fine of .75 developmental units per employee per month with some additional interest. All employers who do not make payments or file returns will not be receiving funds from public or private institutions funded by tax revenue.

Social Security
Chilean employees must contribute 13% of their monthly income (up to 70.3 UF) to an individual retirement account maintained with a Pension Administration Fund or AFP. Employers withhold this amount remit to the AFP.

How GPS can Help

With our Global PEO/Employer of Record services, companies can expand into Chile and hire their employees without having to establish a branch office or subsidiary in Chile.

  • Your candidate is hired via our Chile PEO. If needed, we can also help you find the right talent in any country with our comprehensive global staffing services.
  • Your new employee begins work quickly as we take care of employment contracts, statutory and non-statutory benefits, and running their payroll - all in full compliance with Chile laws.
  • Global PEO Services experts manage all day-to-day operational issues such as employee expenses, and severance/termination if required.
  • With no contractor risks, pass on the compliance burden to Global PEO Services.

Spin Off/M&A Support

  • Ensure continuity of payroll, benefits and HR support when acquiring or spinning off a business with employees overseas.

24/7 Support in 150+ Countries

  • Empower your teams with 24/7 support and a single point-of-contact model in which experienced client services directors are in continuous communication with information and advice.
  • We are backed by a mix of 300+ multidisciplinary experts from HR, Payroll, Finance, Tax, and Legal domains who are ready to respond to the expected and unexpected needs of your business on the shortest notice.

Easy Visibility into Your Employee Time & Attendance and Benefits Data
With our Global PEO, you get access to Mihi, our proprietary SaaS solution for time and attendance, vacation, leave management and benefits enrollment and management. Mihi enables clients to have easy access to employee data in real time. It is designed specifically for companies with a global workforce, especially when working in multiple countries with low headcount.

Ready for Growth When You Are
When ready, we can seamlessly transition you from the PEO/EOR model to your own legal entity and provide ongoing international HR, finance, legal, compliance and staffing support. Learn more about our end-to-end international expansion services.

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