Basic Facts

Paraguay, officially the Republic of Paraguay, is a landlocked country in South America. It is bordered to the south and southwest by Argentina, Brazil to the east and northeast, and Bolivia to the northwest. Despite being one of South America’s only landlocked countries, Paraguay has ports on the Paraguay and Paraná rivers that provide access to the Atlantic Ocean via the Paraná-Paraguay Waterway. Paraguay is a founding member of Mercosur, the United Nations, the Organization of American States, the Non-Aligned Movement, and the Lima Group.

 

 

*Please note that the official currency is the currency of remuneration when employed through WorkMotion in Paraguay.

Capital :
Asunción
Currency :
Paraguayan Guaraní (PYG, ₲, Gs)
Languages spoken :
Spanish, Guarani
Population :
7.22 million (2021 est.)
Minimum wage 2023 :
PYG 2,680,373 (monthly)
Cost of Living index :
$ (122 of 140 nations)
Payroll Frequency :
Monthly/Biweekly
VAT - standard rate :
21%
GDP - real growth rate :
4.2% (2021 est.)

Statutory Holidays

The holidays mentioned below are valid for the year 2024.

Date
Holiday Name
Extra Information
January 1
New Year’s Day
March 1
National Heroes Day
March 28
Maundy Thursday
Movable
March 29
Good Friday
Movable
May 1
Labor Day
May 14
Independence Day
June 15
Chaco Armistice
Movable
August 15
Founding of Asunción
September 29
Boqueron Battle Victory Day
December 8
Virgin of Caacupé Day
December 25
Christmas Day

Contract Sharing Time


The approximate time for sharing the contract with an employee in Paraguay 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.

What You Need To Know


  • Either party can terminate the probationary contract without any liability. Workers on probation are provided all benefits except for notice and severance pay.
  • The Paraguayan Labor Law prohibits hiring fixed term contract workers for tasks of permanent nature.
  • In case of dismissal without just cause, the employer must pay the indemnity equal to 15 days of wages for each year of service or a fraction of six months.

Labor Conditions


Working Hours

The normal working hours are eight hours a day and 48 hours per week during the daytime. For night workers, this limit is seven hours a night and 42 hours a week while for workers with mixed schedules, this limit is seven and a half hours a day or night and 45 hours a week.

Overtime

The total working hours inclusive of overtime may not exceed 11 hours a day. The maximum overtime hours are three hours a day and nine hours a week. 

Overtime Pay RateTime of Overtime
150% of a normal wage rateDuring the day
200% of a normal wage rateDuring the night

 

Probation Period 

The probation period in the initial stage of the employment contract aims for the employer to appreciate the skills of workers, and the employee may verify the suitability of the conditions of the contracted work. The duration of the probationary period is:

  • 30 days for domestic workers and unskilled workers;
  • 60 days for skilled workers or apprentices;
  • A different period as agreed between the parties for highly skilled technical workers, depending upon the period of contracted work.
Termination Notice Period

For terminating an indefinite-term contract, the required notice period depends on the worker’s length of service as follows:

Length of ServiceLength of Notice
Up to 1 year of service (after completion of probation period)30 days
More than 1 and up to 5 years of service45 days
More than 5 years and up to 10 years of service60 days
10 years of service and beyond90 days

Leave / Time Off

Annual Leave

Every worker is entitled to a paid vacation period after each year of continuous work at the service of the same employer, the minimum duration of which should be:

 

Length of EmploymentLength of Annual Leave
Up to 5 years12 consecutive business days
More than 5 years and less than 10 years18 consecutive business days
More than 10 years30 consecutive business days

Sick Leave

There is no explicit provision for paid sick leave, but the law requires that medical care for the same disease last up to 26 weeks. Taking this into consideration, the length of paid sick leave is 26 weeks. In exceptional circumstances, the medical benefit can be extended. It is paid by the employer and Social Security (IPS), with each contributing 50% of the employee’s regular income.

Parental Leave

There is no statutory parental leave.

Maternity Leave

Every female employee should have the right to fully access the Maternity Permit, regardless of the type of benefit or contract for which she provides a service, for a period of 18 uninterrupted weeks, provided that she presents a medical certificate.

When delivery occurs before the start of the 35th week of gestation, or if the child at birth weighs less than 2,000 grams or is born with congenital diseases that require an incubator or special care, justified with a medical certificate, the permit lasts for 24 weeks. 

Paternity Leave

The law provides for two weeks of paid paternity leave to male workers, after their request, on the birth of a child. These leaves are paid for by the employer.

Adoption Leave

The adoptive mother, accredited by a court ruling, and the mother of the foster family, declared as such by a court ruling, have the right to access maternity leave of 18 weeks when the adoptee or the fostered child is less than six months, and 12 weeks when it is greater than six months.

Other Types of Paid Leave

Reason for LeaveLength of Leave
To attend a pap test and mammography1 working day
To fulfill their personal obligations imposed by laws or government regulationsNo more than 2 days in each calendar month and in no case more than 15 days in the same year
Marriage3 working days
The death of the spouse, children, parents, grandparents or siblings4 working days

Statutory Benefits

Social Insurance Institute (IPS) finances the following benefits:

  • Retirement Fund:
    • Long-term economic benefits (retirement and pensions);
    • Widowhood and Orphans Pensions, in the event of the death of the titular Worker.
  • Health Fund:
    • Short-term economic benefits (sickness and maternity benefits);
    • Medical care, medications, supplies, prosthetics, and other medical expenses.

Employers contribute 16.5% to social insurance, while employees contribute 9%.

ContributionEmployer’s ContributionEmployee’s Contribution
Social Insurance16.5%9%

Health Insurance

Health insurance is financed by contributions from both the employer and employee as part of their social insurance contributions.

Medical benefits are provided by the Social Insurance Institute (IPS) to insured employees. Benefits include general and specialized care, hospitalization, medicine, and prosthetics.

Other Insurances

Accident Insurance

Accident insurance is financed by contributions from both the employer and employee as part of their social insurance contributions.

Work injuries are divided into four categories:

  • Permanent total incapacity;
  • Permanent partial incapacity;
  • Temporary incapacity;
  • Fatal injuries lead to the death of a worker.

Benefits availed to the employee are dependent on the degree of injury.

 

Unemployment Insurance

There is no provision for monetary unemployment benefits under Paraguayan labor laws.

Public Pension

A public pension is financed by contributions from both the employer and employee as part of their social insurance contributions.

The insured who has reached the age of 60 and has at least 25 years of recognized service will have the right to ordinary retirement and will be entitled to 100% of the average salary of the last 36 months prior to the last contribution, or 55 years of age and 30 years of recognized service as a minimum, and will be entitled to 80% of the average salary of the last 36 months prior to the last salary.

Other Statutory Benefits

Family Allowance

Until a legal system of compensation for family allowances is implemented based on social security, every worker has the right to receive an allowance equivalent to 5% of the minimum wage for each married, extramarital, or adopted child. The family allowance is totally paid by the employer.