The Republic of Chile is a country in western South America. It shares land borders with Peru, Bolivia, Argentina, and the Drake Passage in the far south. It is a long, narrow country with an average width of about 177 km. Chile is a high-income developing country that ranks 43rd on the Human Development Index. It is one of South America’s most economically and socially stable countries, ranking first in Latin America in competitiveness, per capita income, globalization, peace, and economic freedom.
*Please note that the official currency is the currency of remuneration when employed through WorkMotion in Chile.
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Capital :
Santiago
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Currency :
Chilean Peso (CLP)
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Languages spoken :
Spanish
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Population :
19.21 million (2021 est.)
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Minimum wage 2023 :
CLP 460,000 (monthly)
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Cost of Living index :
$$ (73 out of 139)
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Payroll Frequency :
Monthly
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VAT - standard rate :
19%
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GDP - real growth rate :
11.7% (2021 est.)
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The holidays mentioned below are valid for the year 2024.
The approximate time for sharing the contract with an employee in Chile is 14 business days assuming no special requests or changes to our standard employment contract. Any such requests or changes would need to undergo internal and external review, directly leading to a time delay.
NOTE: This number is subject to change and is only an estimation of the Contract Sharing Time. The estimated Contract Sharing Time begins from the moment that WorkMotion has received all required information from both the client and the employee.
The maximum ordinary working hours per week is 45 hours, divided into five or six days. Standard working hours are usually 9 hours per day, from Monday to Friday.
Work contracts with a part-time working day may be agreed upon, taking into account those with a working day that does not exceed two-thirds of an ordinary working day.
Extraordinary working hours are those that exceed the legal maximum or, if less, the contractually agreed maximum. Overtime is limited to two hours per day or 10 hours per week.
Overtime is paid at a 50% surcharge on the regular day’s salary and must be settled and paid in conjunction with the regular remuneration for the respective period.
Chilean companies typically use fixed-term agreements as a probationary period, which often lasts 12 months.
An employer must give at least 30 days’ notice before terminating an employee. The notice period is frequently waived, and payment is made in lieu. The payment cannot exceed 90 inflation-indexed units (UFs). During this time, either party may terminate the employment contract with three days’ notice, paying the employer for the time served.
Employees who have worked for more than a year are entitled to 15 days of paid vacation per year. 10 days can usually be taken in a row, with the remaining five days agreed upon by the employee and the company. All untaken leave from one year to the next is carried over to the next. Vacation time can accumulate for up to two years in a row. If leave is not taken, the employer cannot levy a penalty or require it to be exchanged for money.
Employees in Chile have the right to sick leave if they can provide a medical certificate within two days of the start of the leave. The employer must send the certificate to the health insurance company within three days. Employees are entitled to sick pay after the fourth day by the employer’s health insurance company.
Female employees are entitled to 18 weeks of maternity leave, six weeks before the birth of the child and the remaining 12 weeks following the birth of the child. In addition, women are entitled to a further 12 weeks of leave after obligatory maternity leave is finished.
The social security system pays the employee’s entire wage during maternity leave.
In the event of the birth of a child, the father will be entitled to a five-day paid leave, which he may take whenever he wants from the time of delivery. In this instance, it will be continuous, omitting weekly rest or distribution within the first month from the date of birth.
If a woman, single man, or widower wishes to adopt a child, they are entitled to one year of unpaid adoption leave beginning on the date the court grants the adoptive parent custody of the child. If a minor is under the age of six months, the parent is entitled to a 12-week adoption allowance. During the leave, the salary is paid by the health insurance institution of the employee.
While performing military service or being a member of the mobilized national reserves, an employee retains the right to the job without pay.
Employees are entitled to five consecutive days of paid leave from their company if they marry or enter into a civil union.
Employees who require general preventative checkups, such as mammograms or prostate tests, are entitled to a paid half-day off once a year.
If the employee’s spouse, civil partner, father, or mother is in a terminal condition, the employee may be granted 10 working days of paid leave with a medical certificate.
In the event of the death of a child, every worker is entitled to 10 calendar days of paid leave. In the event of the death of a spouse or civil partner, all workers are entitled to a similar permit, for seven calendar days. In both cases, this leave is in addition to the annual holiday, regardless of the length of service.
In the case of public immunization programs or campaigns through vaccines or other means, for the control and prevention of communicable diseases, every worker who is within the target population of said campaigns should have the right to a half-day of work.
Although the Labor Code does not consider the right to request leave without pay, nothing prevents the existence of an agreement between the worker and the employer, setting the conditions in said agreement.
All employees are covered by the Social Security system. Employees are required by law to contribute to a mandatory insurance program that covers old age, disability, and survivorship. Foreign employees are generally required to pay social security contributions, though certain exceptions may apply.
An overview of the contributions towards Social Security is presented below:
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Benefits |
Employer Contributions |
Employee Contributions |
Cap |
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Pension Fund System |
– |
10% |
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Health Insurance |
– |
7% |
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Unemployment Insurance |
2.4% |
0.6%* |
122.6 UF |
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Mutual ACHS (Occupational Accidents |
0.93% |
– |
81.6 UF* |
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Disability Insurance (SIS) |
1.61% |
Employers do not contribute to health insurance, but employees contribute 7% to health insurance.
Health and maternity insurance is covered by the public system (FONASA) and by private insurance (ISAPRE).
Insured people who choose not to benefit from the public scheme must sign a contract with a private health insurance institution.
To benefit from sickness and maternity insurance cash benefits:
Each employer contributes between 0.93% to the accident insurance. In industries considered to be heavy work, where the level of accident risk is high, there may be an additional contribution paid by both employers and employees of 3% of the employee’s salary.
Employers contribute 2.4% to the unemployment insurance. The employee, however, contributes 0.6%. This applies only to employees on indefinite contracts. Employees with “fixed-term employment contracts” are exempt from contributing.
Only employees contribute 10% to the pension.
The old-age pension is one of the social security benefits that members of the system have the right (but not the obligation) to receive once they:
Employers contribute 1.61% towards the disability insurance. It is collected by the pension fund manager and managed by an insurance company.
The maximum combined survivor insurance is 100% of the deceased’s permanent disability pension or entitlement. Survivor pensions are payable outside the country under bilateral or multilateral agreements.
The information contained in this Country Guide is provided for informational purposes only and should not be construed as legal advice on any subject matter. The contents of this Country Guide contain general information and may not reflect current legal developments or address your situation. You should not act or refrain from acting on the basis of any content included in this Country Guide without seeking the advice or representation of a licensed attorney. WorkMotion Software GmbH disclaims all liability for actions you take or fail to take based on any content included in this Country Guide.
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