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Mercans offers complete payroll, PEO and HR services in Chile

Mercans provides comprehensive payroll, PEO, and HR services in Chile to help businesses comply with local regulations and focus on their core operations. With local expertise and a global outlook, Mercans can support businesses of all sizes and industries in Chile.


Doing Business in Chile

Chile is considered one of the most business-friendly countries in Latin America, with a stable economy, well-developed infrastructure, and a highly educated workforce. However, navigating bureaucracy can be a challenge, and it's important to have a good understanding of local laws and regulations.

Entity Registration and Incorporation Requirements

In order to incorporate a company in Chile, the investor needs to register the business with the Companies Registry, obtain a Tax Identification Number, open a bank account and fulfill the legal and regulatory requirements. The incorporation process involves selecting the type of legal entity and filing the relevant documentation, which can take around one to two weeks.


Banking Hours: 9:00 am to 2:00 pm from Monday to Friday

Working Week

The standard working week is from Monday to Friday from 9:00 am - 2:00 pm

Labor Law

Chile's labor law regulates the relationship between employers and employees, covering topics such as minimum wage, working hours, vacations, and collective bargaining.

Main Industries

Copper, lithium, other minerals, foodstuffs, fish processing, iron and steel, wood

GDP Growth


Dates & Numbers


Official State Name

Republic of Chile


18.4 million



Major Languages



Chilean peso

Internet Domain


International Dialing Code


Santiago, CL
2:47 am, May 23, 2024
temperature icon 8°C
overcast clouds
Humidity 94 %
Wind Gust: 0 mph


In Chile, payroll management can be complex due to the ever-changing tax and labor regulations. However, outsourcing payroll to a reputable provider, like Mercans, can help businesses stay compliant, reduce costs, and increase accuracy and efficiency. Additionally, outsourcing payroll can allow businesses to focus on their core operations and leave the time-consuming administrative tasks to the experts.

It is acceptable to provide employees with online payslips


Payroll reports must be kept for 3 years


Employees receive paid annual leave of 15 days

Annual Leave

Employees receive paid sick leave of 3 days

Sick Leave

18 weeks of paid maternity leave and 5 days of paid paternity leave

Maternity & Paternity Leave

30 days

Employee Termination

There are no provisions mandated by law regarding the 13th-month salary

13th-month salary

350,000 CLP per month

Minimum Wage

Overtime payment of 1.5x the employee's ordinary rate of pay


Employees paid monthly are entitled to 30 days’ pay for each year of employment for the first eleven years of service

Severance Pay


Tax and Social Security

In Chile, income tax rates range from 0% to 40% depending on income level, and social security contributions are split between employers and employees, with a total contribution rate of 10% to 16.4% depending on the type of insurance.


As of 2021, employees are subject to income tax rates starting at 0% for income up to CLP 720,000 per year (approximately USD 947), and up to 40% for income exceeding CLP 18,880,000 per year (approximately USD 24,895).


Corporate Income Tax


Personal Income Tax


Sales Tax



Social Security

In Chile, social security contributions are split between employers and employees, with a total contribution rate of 10% to 16.4% depending on the type of insurance. Social security covers pensions, health care, and unemployment insurance for Chilean workers.


Social Security Rate


Social Security Rate for Employers


Social Security Rate for Employees


Employment Law

Employment law in Chile mandates a maximum 45-hour workweek, a minimum of 15 days of paid vacation per year, and various other benefits and protections for employees. Employers are also required to provide a safe working environment and adhere to non-discrimination and collective bargaining laws.

Employment Agreement

In Chile, an employment agreement must include basic information such as the job description, compensation, working hours, and duration of the contract, and can be either written or verbal. However, written contracts are highly recommended to avoid disputes.

Working condition

In Chile, the legal maximum working hours are 45 hours per week, with a maximum of 10 hours per day. In certain industries, such as mining and transportation, the maximum working hours may be different. Overtime work is allowed with limitations, and employees are entitled to additional compensation for overtime work.


In Chile, employees are entitled to 15 days of paid annual leave after completing one year of continuous service with their employer. In total, there are approximately 11 public holidays in Chile, though not all of them are mandatory for employers to give as paid leave.

Employment termination

In Chile, both employers and employees can terminate an employment contract with notice or payment in lieu of notice. Employers must have a valid reason to terminate an employee and must follow specific procedures, while employees can resign at any time without cause. Severance pay is also required in certain circumstances.


30 days

Minimum notice period for terminating an employee



Total number of public holidays



Working hours per week


2 days

Total number of days for Compassionate & Bereavement Leave



Foreigners who wish to work in Chile must obtain a work visa, which is typically obtained through their employer. The process involves submitting several documents, including a work contract, and the approval of the visa application can take several months. Once in Chile, foreign workers must also obtain a RUT (tax identification number) and register with the social security system. There are different types of work visas available depending on the nature of the work and the duration of the stay.


Residency permits

Foreigners can obtain a temporary or permanent residency permit in Chile through various means, such as investing in Chile, studying, or family reunification. The process involves submitting various documents, including a criminal background check, and meeting certain requirements, such as having a clean criminal record and sufficient financial resources.

Work Permit Validity

2 years

Required Documents

Copies of a passport that’s valid for at least 12 months from the application

Proof of legal status in their country of residence

One colored passport-size picture taken in a studio with a plain white or off-white background

Copies of their flight itinerary and reservation

Proof of hotel reservation or accommodation

Bank statements from the past three months

A local work contract, job offer, or services contract with a duration longer than three months

A letter of invitation, if applicable

A letter explaining all the reasons they’re traveling

Compliant, reliable, error-free and touchless payroll in Chile

Build the best team and hire top talent compliantly in Chile. Get in touch with Chile payroll outsourcing & PEO specialists for a free consultation!

This document was prepared for informational purposes only. As local laws & regulations keeps on changing. Please consult your tax & legal advisors as well.
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