Employer of Record Guide in 

Chile

Your EOR guide in Chile

An EOR proposal should name the Chilean employer and explain how the worker will serve your business. Under regulated temporary services, an Empresa de Servicios Transitorios (EST) signs the employee’s employment contract, while a separate placement agreement connects the EST and the client, called the usuaria. The EST must have registration and a guarantee; the proposed assignment must satisfy a permitted reason and the applicable duration rules.

For ordinary EST placements, extraordinary events and workload increases have a 90-day limit; qualifying new projects or a new business’s startup have a 180-day limit. Replacement of an absent employee follows that absence. Confirm the permitted reason and any specific exception against the duration rules. Roles representing the client and replacement of lawful strikers are among the prohibited uses.

The EST carries the employer’s pay and contribution obligations. The client directs the agreed work, supplies attendance records and has direct health and safety duties, plus subsidiary liability for the EST’s employment and social-security obligations. Review the client responsibilities before accepting the commercial agreement.

A genuine subcontracted service follows a different model: the contractor delivers work on its own account and risk with employees under its direction. Simply putting a person on another company’s payroll while your managers supervise them does not establish that model. Chile’s Labour Directorate explains when intermediary arrangements become illegal worker supply. For an ongoing, client-directed role, obtain a documented assessment of the lawful employment structure rather than treating temporary supply as an unlimited hiring solution.

Start with the role, intended duration, supervisor and work location. The sections below explain the practical Chile employment rules: pay and tax, leave, termination, holidays and onboarding. “Other” explains the arrangement choices and responsibility split. When you are ready to evaluate vendors, use the separate Chile EOR comparison.

Pay & Tax

Minimum Wage

From May 1, 2026, Chile's monthly minimum wage is CLP 553,553 for workers older than 18 and up to age 65. The rate is CLP 412,938 for workers under 18 or over 65. These amounts are national monthly floors for covered employees and do not establish a market salary for a specific role.

The minimum wage changes periodically. Confirm the employee's age category, working-time arrangement and the rate in force for the pay period against the Labour Directorate's current minimum-wage guidance.

Payroll Cycle

The employment contract can set a weekly, fortnightly or monthly pay period, but equal pay periods cannot exceed one month. Payroll must follow the agreed pay date. There is no general rule requiring every salary to be paid before the fifth day of the next month. Record the pay period and date in the contract, then build payroll cutoffs around that commitment. See the Labour Directorate's remuneration guidance.

Individual Income Tax

Dependent employment income can be subject to the monthly Impuesto Único de Segunda Categoría, or IUSC. The employer withholds this progressive tax after determining the employee's net taxable employment income. The exemption threshold and band limits are expressed in monthly tax units, or UTM, so their peso values change each month.

Do not apply the marginal factor to the employee's full gross salary. Payroll uses the current month's UTM table, statutory deductions, factor and rebate. Check the 2026 SII monthly tables for the applicable peso thresholds and deduction amount.

Tax Residency Criteria

For Chilean income-tax purposes, a person can become resident by being in Chile for more than 183 days, continuously or not, within any twelve-month period. Domicile is a separate concept based on facts showing an intention to settle, so day count alone is not always the full analysis.

A foreign individual who becomes domiciled or resident in Chile is generally taxed only on Chilean-source income during the first three years after entering the country, with worldwide-income taxation applying afterwards unless an authorized extension applies. International assignments should be reviewed against the SII residence criteria and the SII foreign-income guidance.

Employer Payroll Contributions

Start with gross contractual remuneration, then calculate employer obligations on their applicable bases. For August 2026 to July 2027 remuneration, covered private-sector employees generally have these employer-side items:

The employer pension schedule, unemployment insurance, workplace insurance and SANNA funding guidance establish these separate items.

In 2026, the monthly ceiling is 89.9 UF for pension, health and workplace-risk contributions and 135.1 UF for unemployment insurance. SANNA also uses the pension-system ceiling. UF is an inflation-indexed unit whose peso value changes daily. Apply each item’s current contribution ceiling and payroll base rather than a single percentage to the entire salary.

For an ordinary indefinite contract below all caps, with a 0% additional risk rate, these employer contributions total 6.83%: 3.5% + 2.4% + 0.90% + 0.03%. For a covered fixed-term contract on the same assumptions, they total 7.43%. These are contribution subtotals, not all-in employment prices.

The quote must separately identify gross compensation, any gratification treatment, supplemental benefits, equipment or expenses, setup and exit items, and the EOR service fee, with its currency, billing period and FX terms. For an EST placement, check the special compensation rules described under Legal Gratification before adding ordinary-employment bonus or severance lines.

Employee deductions reduce net pay. They generally include 10% pension saving plus the AFP commission, 7% health coverage, and 0.6% unemployment insurance for an indefinite contract, along with applicable income-tax withholding. Keep them separate from employer additions. Confirm any employee-specific exemption using the pension rules and health contribution guidance.

Working Hours

Chile's ordinary weekly limit is 42 hours from April 26, 2026. It falls to 40 hours on April 26, 2028. The 42 hours can generally be distributed over five or six days, with no more than ten ordinary hours in a day. Employers cannot reduce remuneration because of the statutory reduction. Confirm whether a genuine statutory exclusion applies instead of assuming a job title is exempt. See the Labour Directorate's 40-hour implementation guide.

Overtime Pay

Overtime should be based on temporary needs and covered by a written agreement lasting no more than three months, although it may be renewed. The ordinary limit is two overtime hours per day. Overtime is paid with at least a 50% premium over the employee's ordinary hourly rate. Hours beyond the agreed schedule that the employer knows about can still be treated as overtime. Review the overtime agreement rules and the minimum premium.

Legal Gratification

For ordinary employment, qualifying profit-making employers can satisfy legal gratification by distributing at least 30% of net profits proportionally, or paying 25% of each employee’s annual remuneration subject to a cap of 4.75 monthly minimum wages. Monthly advances need the appropriate annual reconciliation. Confirm eligibility and the selected method using the gratification rules.

An EST worker’s agreed remuneration has a special statutory treatment: Article 183-Z includes legal gratification, specified severance and notice compensation, and other proportional entitlements, while excluding the separate vacation compensation under Article 183-V. Require the proposal to explain how remuneration is composed so the same item is not added twice. The Labour Directorate’s EST remuneration ruling also distinguishes other pay that can remain due, such as semana corrida where its conditions apply.

Chile has no general requirement for a thirteenth-month salary or universal vacation bonus. Contractual and collective-agreement bonuses remain separate obligations to check.

Full-Time vs Part-Time

The ordinary full-time ceiling is 42 hours per week from April 26, 2026. Chile's special part-time rules apply when the agreed week does not exceed 30 hours. A reduced schedule does not remove minimum employment protections; pay and certain benefits are calculated under the applicable proportional or statutory rules. Put the actual schedule, distribution, rest periods and time-recording method in the contract.

Leave Policy

Vacation Leave

For ordinary employment, an employee with more than one year of service generally receives 15 working days of paid annual leave. For counting leave, Monday through Friday are working days. Employees working in Aysén, Magallanes and the Province of Palena receive 20 working days. The first ten days are normally continuous; dividing the balance and accumulating up to two periods require agreement.

Progressive leave applies after ten years of recognized service: one additional day for each three new years with the current employer. Check the annual-leave rules, agreed division, accumulation limit and progressive entitlement.

EST workers have a separate vacation-compensation rule. At least 30 days of continuous or discontinuous service under one or more contracts with the same EST within the relevant twelve-month period can generate compensation. Confirm the accumulated days, amount and payment timing under the EST vacation rules and Labour Directorate interpretation, rather than using only the ordinary one-year leave threshold.

Sick Leave

An employee with an authorized medical leave can qualify for a social-security sickness subsidy if the contribution and certification conditions are met. For a medical leave longer than ten days, the subsidy can run from day one. For a leave of ten days or fewer, it generally starts on day four. The employer is not required to pay the first three days simply because the subsidy does not cover them. The employee must submit the medical certificate on time, and the payer depends on the health system. See the Labour Directorate's sick-leave guidance.

Maternity Leave

The standard maternity structure includes six weeks of prenatal leave and twelve weeks of postnatal leave. Longer postnatal periods can apply in cases such as premature or multiple births. Eligible workers receive a social-security subsidy rather than ordinary salary during the protected leave. Pregnancy and postnatal job protection also affects termination procedure. Confirm dates from the medical certificate and the official postnatal rules.

Parental Leave

After postnatal leave, an eligible mother can take twelve weeks of postnatal parental leave with the full subsidy, or eighteen weeks while returning for half the agreed working day, receiving half the subsidy and at least half the fixed contractual remuneration. If both parents are employees, the mother can transfer the final portion to the father from the seventh week under the statutory procedure.

A father also has five paid days following a birth, taken continuously from the birth while excluding weekly rest, or distributed within the first month. Review the parental options and birth-leave rules.

Bereavement Leave

Statutory paid bereavement leave varies by relationship:

The leave starts from the death, subject to the specific rule for gestational loss. See the Labour Directorate's guidance for a child or gestational loss and a spouse, civil partner, parent or sibling.

Marriage & Other Statutory Leave

An employee who marries or enters a civil union is entitled to five continuous paid working days, in addition to annual leave. The employee must give 30 days' advance notice and provide the certificate within 30 days after the event. Other leave depends on the event, role or agreement; there is no universal five-day study or family-emergency entitlement. Check the contract, collective agreement and the law that matches the event. See the Labour Directorate's marriage and civil-union guidance.

Leave Entitlement Summary

Contracts and collective agreements can provide more generous terms. Validate eligibility, notice, evidence and payroll treatment for the employee's specific event.

This summary describes ordinary employment. Use the EST vacation-compensation rule above for a temporary-services contract, and confirm the actual employee’s subsidy eligibility and protection status.

Termination

Termination Types

Ending a client’s service agreement, ending an EST assignment and ending the employee’s employment contract are different events. Ask the legal employer to identify the ground, effective date, notices and final amounts for the actual arrangement before the client communicates an exit.

For an EST placement, continued work after the agreed employment term can make the client the indefinite employer. Using temporary services to conceal a permanent client relationship also has consequences. Review the EST rules and sanctions before extending the assignment.

For ordinary employment, Chile requires a statutory ground, such as mutual agreement, resignation, fixed-term expiry, completion of agreed work, a qualifying conduct ground or needs of the enterprise. Written dismissal notices must state the ground and supporting facts. The termination formalities depend on that ground.

Notice Period Requirements

For ordinary employment, a 30-day advance notice applies to needs-of-the-enterprise and the limited employer-desahucio ground, unless compensation in lieu is paid. Other grounds have their own notice and filing deadlines, often measured in business days. The notice must address social-security payment status where required. Use the ground-specific notice rules.

For an EST engagement, reconcile the agreed end date and the remuneration rules under Article 183-Z. Do not promise a universal 30-day termination route for every assignment.

Severance Pay

For an ordinary employment contract ending on needs of the enterprise after at least one year’s service, statutory years-of-service compensation is generally 30 days of the last monthly remuneration for each year and any fraction longer than six months, capped at 330 days. The remuneration basis is generally capped at 90 UF. Notice compensation can apply separately.

A court can increase compensation for an unjustified, improper or groundless dismissal. Check the years-of-service rules and remuneration cap. For EST employment, use its special remuneration treatment rather than automatically adding this ordinary-contract formula to an assignment quote.

Probationary Periods

Chile's Labour Code does not provide a general probationary period that lets an employer end an ordinary employment contract without a statutory ground. A contract can set performance expectations and review dates, but calling the first six or twelve months probation does not displace Chile's termination rules. Build role clarity, feedback and documentation into onboarding instead of relying on a no-fault trial period.

Final Pay Requirements

The finiquito records the termination ground, amounts due and reservations. It and the related payment must generally be made available within ten business days after separation. Payment in instalments requires agreement and must follow the applicable formalities. Reconcile salary, unused accrued leave, statutory severance, compensation in lieu of notice and any other earned amounts. See the Labour Directorate's finiquito deadline.

Anti-Discrimination & Retaliation Laws

Termination cannot rest on unlawful discrimination or retaliation. Protected employees, including some maternity- or union-protected workers, may require prior judicial authorization before dismissal. EST employment has specific maternity-protection provisions under Article 183-AE; the ordinary protection duration cannot simply be assumed for an assignment. Have the legal employer review the employee’s status, actual arrangement and proposed ground against the Labour Code before action.

Statutory Time Off

National Public Holidays

A 2026 calendar reference lists these national public holidays:

January 1, May 1, September 18, September 19 and December 25 are mandatory and nonwaivable holidays for most commerce workers, subject to statutory exceptions.

Confirm special or newly enacted holidays for the pay period. The calendar reference links to the underlying holiday laws; use the commerce-holiday rules when scheduling covered workers.

Regional & Local Holidays

Regional holidays can apply in addition to the national calendar. In 2026, June 7 is a holiday in the Arica and Parinacota Region, and August 20 is a holiday in the communes of Chillán and Chillán Viejo. Confirm the employee's work location each year instead of treating Santiago's calendar as nationwide coverage.

Holiday Pay & Working on Holidays

Employees in activities that are legally exempt from Sunday and holiday rest can be scheduled on a public holiday, subject to rest and compensatory-day rules. A holiday worked within the ordinary schedule does not automatically receive double pay. Overtime attracts at least the normal 50% overtime premium, and the treatment of accumulated compensatory days follows separate rules. Most commerce workers cannot waive the five mandatory holidays listed above. Check the holiday-work rules and mandatory commerce holidays before scheduling coverage.

Observance & Substitution

Do not assume every holiday that falls on a weekend moves to Monday. Chile's movement rules apply to specified holidays, including Saints Peter and Paul and Meeting of Two Worlds under their weekday formulas. Use the enacted annual calendar for payroll and scheduling, and manage individual religious accommodation requests under the employer's policies and applicable equality rules. The Labour Directorate explains the movable-holiday rule.

Onboarding

Required Documents

Collect the worker’s identity and RUN or RUT details where applicable, pension and health affiliation, bank-payment information, compensation terms and work authorization where needed. Collect role-specific certificates only when the job or law requires them.

For ordinary employment, put the contract in writing within 15 days after incorporation, or within five days for specified short or task-based contracts. Register the signed employment contract electronically within 15 business days after execution. The ordinary contract rules and registration guidance describe separate obligations.

For EST employment, both the employee contract and the placement agreement have special writing deadlines: within five days after incorporation, or within two days if the engagement lasts less than five days. The placement agreement identifies the parties, permitted reason, jobs, duration and commercial price. Prepare both before the start where possible and track the EST contract requirements and writing deadlines.

Work Authorization

A foreign national needs immigration status that permits the proposed work. Chile's temporary-residence route for remunerated activities can cover an employee with a Chilean employer, while a person in transitory status generally cannot work unless a specific authorization applies. Do not promise a standard approval time or let work begin based only on an application receipt. Match the contract, start condition and payroll setup to the authorization shown in the National Migration Service's remunerated-activity route or its exceptional transitory work authorization.

Background Checks

Use a background check only when it is lawful, necessary and proportionate to the role. Define the business reason, obtain any required consent, limit collection to relevant information, restrict access and set a retention period. Do not make a universal criminal, health or education check part of every Chile hire. If a regulated role requires a certificate, record the legal basis and verify the document through the proper issuing authority.

Data Protection

Limit employee and candidate data to a defined purpose, explain its use, control access and establish retention and deletion rules under Chile’s personal-data law. Law 21,719’s replacement framework takes effect on December 1, 2026. Review onboarding notices, vendor terms and cross-border flows before that date against the new legislation.

IP Assignment & Confidentiality

Define confidentiality, permitted data use, ownership or licensing of work product, moral-rights constraints where relevant, return of property and post-termination obligations in role-specific terms. Do not assume every invention or work automatically transfers because the person is an employee. Coordinate the employment wording with the governing intellectual-property rules and any client-facing invention-assignment requirement.

Pre-start Dependency Check

Approve the employer’s identity and employment route before a start date. For EST supply, verify registration, guarantee, the permitted reason, assignment duration and the client’s identity as usuaria. For an ongoing role, require a structure that supports the intended duration and actual supervision.

Then agree gross compensation and its components, the work location, the 42-hour schedule or genuine exclusion, time recording, benefits, work authorization and payroll cutoffs. Set performance expectations and review dates; a trial-period label does not create a right to dismiss without a statutory ground.

Onboarding Sequence

Timing depends on the route, documents, work authorization and payroll cutoff. Record the remaining dependencies with dates. An EOR employment contract does not itself grant permission to work in Chile.

What the EOR Handles

A provider offering local employment support should specify who drafts and registers contracts, calculates payroll, remits contributions, maintains leave records, handles employee notices and completes final settlement. Name the Chilean employer and identify any separate local delivery party. Confirm benefit enrollment, immigration-support limits, data handling, invoice currency, FX treatment, payroll cutoff and service fees in writing.

Borderless AI’s EOR service describes support for onboarding, contracts, payroll, benefits and compliance. For a Chile hire, ask the team to confirm the legal employer, lawful arrangement, role eligibility and exact service scope. Bring the job description, reporting line, work location, expected duration, gross salary, benefits and proposed start date to a hiring discussion.

Other

Worker Classification

In Chile, personal services performed under subordination and dependence in exchange for remuneration can create an employment relationship regardless of the contract label or invoice format. Control over schedule, instructions, supervision and integration into the business matters. Review the actual working model before treating a person as an independent contractor, and use the Labour Directorate's employment-relationship test.

Unionization & Collective Agreements

Employees can have statutory union and collective-bargaining rights. A collective agreement can improve pay, leave, allowances, working-time or termination terms beyond the individual contract. During diligence, confirm whether the role or workplace is covered, whether a protected representative is involved and which collective terms must be reflected in payroll or policy.

Document Workplace Expectations

Avoid turning broad cultural assumptions into employment rules. Put enforceable expectations in the contract and policies: working hours, reporting line, communication channels, availability, travel, expense approval, information security and performance measures. Provide clear employee-facing instructions and record any location or schedule change that affects payroll or compliance.

Remote Work

A remote-work agreement should identify the work location, schedule or applicable time exclusion, supervision method, equipment, security requirements and expense handling. The employer must provide and maintain necessary equipment and cannot make the employee bear operating or repair costs. Eligible remote employees with freely arranged hours or an applicable schedule exclusion have a right to at least twelve continuous hours of disconnection in each 24-hour period. The employer must register the remote-work agreement electronically within 15 days. See the rules on equipment and costs, disconnection and agreement registration.

EOR Responsibility Split

Which employment arrangement fits?

For EST supply, the permitted reasons include replacing an absent worker, extraordinary events, a new or specific project, starting a new business, occasional or extraordinary workload increases, and urgent work requiring immediate execution. These are statutory conditions, not a general permission to place any remote employee.

The ordinary time limits include 90 days for extraordinary events or workload increases and 180 days for qualifying new projects or a new business’s startup. Absence replacement follows the replaced worker’s absence. The duration rules restrict extensions; document any specific statutory exception, including the separate disability provision in Article 183-AC, rather than treating these limits as renewable by default.

EST supply cannot be used for roles representing the usuaria, such as managers or agents with representative powers, to replace lawful strikers, or to transfer workers to another EST. Check the actual duties against the prohibited uses.

Responsibilities in an EST placement

The usuaria also has subsidiary liability for the EST’s labor and social-security obligations. The client-liability rules make this a material part of the arrangement. For genuine subcontracting, assess that framework’s own employer/principal duties instead of reusing the EST responsibility table.

An EOR agreement does not establish immigration permission or settle the foreign business’s corporate-tax position. Review those dependencies separately, and agree how changes in role, location, supervision or duration will be assessed before they take effect.

To assess your proposed arrangement, discuss your Chile hire with Borderless AI. Provide the role, supervisor, duration, location and compensation brief so the local employment route and service scope can be confirmed before a start date.