Argentina is becoming a talent hotspot, and many organizations are looking to hire skilled Argentine employees. While hiring Argentine employees has many benefits, it’s also an intricate process. For one, the cost of hiring an employee in Argentina must be considered. The cost of hiring an employee in Argentina can vary depending on factors such as the employee's salary, the type of contract, the industry, and the location of the company.
Here’s a guide on how to gain some insight into Argentine tax and labor laws, and how much it costs to hire an employee from Argentina.
What is Mandatory?
To be compliant, employers are required to pay a range of mandatory contributions, taxes, and social security contributions for their employees. These mandatory payments include up to 25.53% of contributions for social security, health insurance (Programa de Atención Médica Integral, also known as PAMI, mandatory life insurance, pension, as well as taxes on salaries and other benefits on top of an employee’s salary. Additionally, some collective bargaining agreements or sectoral regulations may require additional benefits or contributions.
According to a report from the International Labour Organization (ILO), the average cost of hiring an employee in Argentina is approximately 1.45 times the average employee's salary on a worldwide scale. This includes both the employee's salary and the mandatory contributions and taxes paid by the employer. However, the actual cost of hiring an employee varies and is dependent on certain circumstances. Factors such as recruitment expenses, training costs, perks, and benefits may also increase costs.
What to Know Before Hiring
Here are some other things to consider before hiring from Argentina.
Background
The official language of Argentina is Spanish and the official currency of Argentina is the Argentine Peso (ARS). There are 23 provinces in Argentina. Argentina has a population of 45.81 million people and an employment rate of 44.2% as of 2022. Although the main industries in Argentina are food processing, automobile production, textiles, energy production, and mining, the tech sector is growing exponentially. Many skilled software engineers are from Argentina. According to Harvard Business Review’s analysis, Argentina is the #1 country with leading tech skills worldwide. When hiring in Argentina, your employee must be a resident and have a Documento Nacional de Identidad (DNI).
Work Culture in Argentina
Holidays, Sick Leave & Paid Time Off
There are 18 public holidays that regions may observe differently. When it comes to vacation, the amount of paid vacation an employee receives in Argentina depends on their seniority. The paid vacation time in typically Argentina is:
- Up to 5 years of service - 14 paid vacation days
- 5 - 10 years of service - 21 paid vacation days
- 10 - 20 years of service - 28 paid vacation days
- 20+ years of service - 35 paid vacation days
It is important to note employers must grant vacation requests between October 1st and April 30th. While annual leave is compulsory, employees are also required to work at least half a calendar year to earn their annual leave. In addition to these holidays, employees are able to request periodical days off fully paid.
If employees are sick, they are entitled to three months per year of sick leave if they’ve been with the organization for less than five years. Employees who have been working for longer than five years can ask for up to 6 months of sick leave. This duration is doubled for employees with families and other dependents.
Working Hours
In Argentina, employees typically work eight hours daily and 48 hours per week. A minimum of 40 hrs per week is required for a full-time job in Argentina with overtime in sight. With that being said, overtime hours cannot exceed three hours per day, 30 hours per month, or 200 hours per year. The majority of Argentine companies do not offer part-time or hourly-paid employment, but there is a significant informal market too that is largely contract-based.
Salary, Bonuses, & Non-Competes
In Argentina, companies tend to conduct salary revisions twice a year due to astronomically high inflation rates. On top of frequent salary revisions, employers in Argentina are expected to pay a 13th salary that is payable in two installments, the first of which is required before June 30th, and the second before December 18th.
For overtime work, employees must be paid an additional 50% pay and an additional 100% pay for holidays for work on Saturdays and Sundays after 1 pm.
What about non-compete agreements? They cannot exceed two years in Argentina. The employee must also be compensated at the rate of at least 50% of their monthly salary in cases like this.
Probationary Period, Notice Period, & Severance
The probationary period in Argentina is three months. The notice period that an employer would have to offer in Argentina depends on the period of continuous employment:
- 3 months of employment - 15 days notice period
- 3 months - 5 years of employment - one month notice period
- 5 years + of employment - 2 months notice period
If an employer dismisses an employee for just cause, a written notice is required. Severance pay also differs depending on the cause and length of continuous employment:
- Without cause termination - month’s salary owed for every year of service (after 3 months probationary period)
- Redundancy termination - half a month’s salary for every year of service
- With just cause termination - none owed
Employers can also choose to pay salaries in lieu of notice or during the notice period.
Hire from Argentina with Borderless
If you want to hire from Argentina, but are overwhelmed by the complexities of paying an employee in Argentina, Borderless is here to help. Borderless is a platform and Employer of Record specifically designed to help organizations compliantly hire employees abroad. Do more beyond borders with Borderless.
Disclaimer
Borderless does not provide legal services or legal advice to anyone. This includes customers, contractors, employees, partners, and the general public. We are not lawyers or paralegals. Please read our full disclaimer here.
