It’s no secret that a global talent shortage has hit us in recent years. Companies worldwide struggle to find the talent they need within their borders, and positions lay vacant. Fortunately, you can find skilled professionals in all corners of the world. Emerging markets such as Paraguay are hidden gems, home to a growing talent pool.
An Employer of Record (EOR) offers a simple and straightforward way to hire and pay global talent legally. It provides everything you need to hire, onboard, and pay employees compliantly. This guide will explore Paraguay’s talent pool and how to tap into it effectively. It will also provide valuable insight into an Employer of Record services, so read on to learn more.
Why Hire Talent in Paraguay?
There are several reasons why you should consider hiring from Paraguay. To start, it’s cost-effective. You can recruit skilled professionals for a fraction of the cost of hiring in North America, as living expenses are significantly lower.
A big plus to hiring from Paraguay is the ability to collaborate in real-time. When you hire from Paraguay, you don’t have to worry about the time zone holding you back. Compared to outsourcing talent in Asia and Europe, Paraguay doesn’t have much of a time difference.
If you’re located on the East Coast in the US, you have a mere one-hour time difference. If you work out of the West Coast, there is a three-hour time difference. This minimal time difference means you can easily collaborate and communicate with your Paraguayian peers.
Lastly, Paraguay is strategically located near other thriving South American nations, such as Brazil and Chile. If your business could benefit from access to new markets, consider hiring from Paraguay.
How Can I Legally Hire an Employee in Paraguay?
Things can get complicated if you want to hire talent in Paraguay on your own. To hire in Paraguay, businesses must establish an entity based in the country. The process can be a headache and is only worthwhile if you intend to practice business in Paraguay long-term.
A global EOR offers an easy, straightforward way to hire employees from Paraguay. An EOR, like Borderless, becomes the legal employer of your global team, enabling you hire, manage, and pay talent in over 170 countries without a foreign legal entity.
What Does an EOR Do?
An EOR ensures you maintain strict compliance with local laws and regulations in the countries where you hire talent. They remove the legal roadblocks in hiring globally so you can focus on growing your business. Hiring laws vary considerably worldwide, and it’s challenging to keep up with constantly changing regulations. An EOR takes care of the following processes:
- Compliant employment contracts
- Onboarding
- Tax documentation and filing
- Payroll processing
- Employee benefits
- Intellectual property protection
- Termination
An EOR handles all of the tedious administrative tasks associated with these processes. They generate compliant employment contracts, collect tax documentation, file it per local laws, etc.
Employee Insurance and Benefits
Staying competitive is always important, especially in a tight labor market. An EOR will help you stand out from the crowd with a comprehensive benefits package, including generous health and wellness benefits, time off, financial security, and much more. It will ensure you provide your team members with what they’re legally entitled to and help you attract top talent with attractive offerings.
For example, in Paraguay, 13th-month payments are legally mandated. It’s typically called a Christmas Bonus as it’s paid out in December and is equivalent to one month of pay.
Vacations and Public Holidays
Employees' level of seniority determines paid vacation leave in Paraguay.
- Five years of service: 12 working days of leave.
- Five to ten years of service: 18 days of paid leave.
- Over ten years of service: 30 days of paid leave.
In addition to other forms of paid leave, such as maternity leave and sick days, employees in Paraguay are entitled to take the following days off.
- January 1: New Year's Day
- March 1: Dia de los héroes
- April 6: Jueves Santo
- April 7: Viernes Santo
- May 1: Día de los Trabajadores
- May 14 - 15: Independencia
- June 12: Dia de la Paz del Chaco
- August 15: Fundación de Asunción
- September 29: Victoria de Boquerón
- December 8: Virgen de Caacup
- December 25: Día de Navidad
Taxes & Social Security Contributions
In Paraguay, companies are required to register their employees with the country's mandatory social security system. All wages, whether paid in cash or products, are included in the computation, except for the family allowance and the necessary annual bonus.
In Paraguay, most taxes—including corporate, income, and sales—are set at 10%, with low-wage workers paying only 8% income tax. Employers must contribute 16.5%, and employees must contribute 9% towards social security.
An EOR, like Borderless, will ensure you remit payroll taxes on time, every time. With the support and expertise of an EOR, social security contributions are simplified, and taxes are filed accurately and compliantly. So you can cut back on busy work and focus on growing your business.
What Are the Advantages of Going Through an EOR in Paraguay?
Working with an EOR comes with a range of benefits.
- Saves time and money
- Minimizes risks and avoids penalties related to non-compliance
- Cuts back on busy work
- Improves retention and talent attraction
- Expands your talent pool
- Keeps you up to date on hiring trends
These are just some of the ways an EOR can positively impact your business. Sign up with Borderless to explore what an EOR can do for you.
How Do I Choose the Right EOR for Me?
With so many EORs to choose from, it’s important to determine which one suits your individual needs. It’s helpful to keep the following considerations in mind.
- Expertise: Choose an EOR with a history of hiring, onboarding, and managing employees in the countries you want to hire from. Checking this box will help ensure your EOR of choice maintains compliance every step of the way.
- User experience: It’s important to provide your team with an easy-to-use, intuitive EOR platform packed with self-service options. The goal is to integrate it into your team's existing workflow stress-free.
- Support: Turn to EORs with a solid team of experts with a proven track record. Ensure that they’ll be there to lend you support when you need it.
- Security: Keeping your data safe and secure is paramount. This is especially true when working with a globally distributed team, leaving you more vulnerable to cyberattacks. So, choose an EOR that has a robust set of data security standards and protocols.
Borderless: The Employer of Record Your Company Needs
Broaden your horizons by hiring global talent. Use Borderless as your EOR of choice to expand your talent base and get the most out of your global hiring experience. Get in touch and book a demo today.
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.
