Chile at a glance
Taxes in Chile
Employer Contributions
Total employer contributions: 5.18%–9.18%
| Contribution Type | Rate |
|---|---|
| Social security | 2.71% |
| Unemployment insurance | 2.4%–3% |
| Professional illness insurance | Up to 3.4% (varies by industry) |
Total employer contributions: 5.18%–9.18%
| Contribution Type | Rate |
|---|---|
| Social security | 2.71% |
| Unemployment insurance | 2.4%–3% |
| Professional illness insurance | Up to 3.4% (varies by industry) |
Total employee contributions: 17.6%–58.2%
| Contribution Type | Rate |
|---|---|
| Social insurance (AFP pension) | ~10% |
| Health insurance (ISAPRE/FONASA) | 7% |
| Unemployment insurance | 0%–0.6% |
| Income tax (segunda categoría) | Progressive |
| Annual Income (CLP) | Rate |
|---|---|
| Up to 943,501.50 | 0% |
| 943,501.50 – 2,096,670.00 | 4% |
| 2,096,670.01 – 3,494,450.00 | 8% |
| 3,494,450.01 – 4,892,230.00 | 13.5% |
| 4,892,230.01 – 6,290,010.00 | 23% |
| 6,290,010.01 – 8,386,680.00 | 30.4% |
| 8,386,680.01 – 21,665,590.00 | 37% |
| Over 21,665,590.01 | 40% |
Employer of Record in Chile
How Remote& EOR Works
Remote& acts as the legal employer of your Chilean workers — managing AFP/FONASA contributions, unemployment insurance, payroll, tax filings, and employment contracts while you direct the work.
| Party | Role |
|---|---|
| Your Company | Manages work tasks, performance, and team direction |
| Remote& | Runs payroll, files AFP/health/unemployment contributions, administers benefits, ensures Labour Code compliance |
| Employee | Works for your company under a locally compliant Chilean contract |
Ask Remi:
"Hire a full-stack developer in Santiago — CLP 3,500,000/month, starting next month" Remi handles everything: contract, AFP registration, health insurance enrollment, unemployment fund setup, and payroll.
Benefits in Chile
- Legal gratification (gratificación legal): Companies that generate profits must distribute an annual statutory bonus to all employees — typically 25% of annual salary, capped at 4.75 times the minimum wage
- Workers' compensation insurance: Mandatory coverage for employment activity risks; contribution rate varies by industry risk level, up to 3.4% of salary
- Early vacation (first-year leave advance)
- Flexible working arrangements
- Education and professional development
- Private health insurance (ISAPRE upgrade)
- Stock options
- Annual salary review
- Aguinaldos (holiday bonuses)
- Childcare allowance
- Meal vouchers
Leave entitlements
| Leave type | Entitlement |
|---|---|
| Paid Annual Leave | 15–20 working days after one year of service + 16 public holidays |
| Sick Leave | Unlimited (paid via Mutual de Seguridad / FONASA after employer covers initial period) |
| Maternity Leave | 18 weeks |
| Paternity Leave | 5 days |
| Parental Leave | 12 weeks paid (shared between parents) |
Employment conditions
Probation
Chile does not provide a formal statutory probation period. Employers commonly use fixed-term contracts (maximum 12 months) as a practical evaluation period before converting to indefinite employment.
Termination Requirements
Employment termination requires a written letter specifying the reason and effective date. A severance settlement agreement (finiquito) must detail dismissal grounds and all severance owed — including notice, accrued leave, and applicable severance pay.
Employee Rights & Protections
Chilean workers are entitled to: written employment contract, payslip, pregnancy protections, equal pay, anti-discrimination protection, Right to Disconnect, trade union membership, workers' compensation insurance, and legal gratification.
Payments
End of employment in Chile
At-will termination is only available for directors, senior managers, and roles designated as "exclusive confidence" positions. All other employment requires a valid, documented reason for dismissal plus proper notice.
Wrongful termination (without valid cause or procedural compliance) exposes employers to compensation for the notice period, severance equal to 30 days' salary per year of service, plus a surcharge of 30%–100% of severance and potential attorney costs.
Frequently asked questions
Four routes: run payroll from HQ (generally non-compliant long-term); engage independent contractors (non-compliant for full-time workers); establish a Chilean entity for direct employment; or use Remote& as Employer of Record — the fastest path to compliant hiring without local incorporation.