Hire compliantly in Chile. Compare EOR providers, navigate a pension system in the middle of a major reform and understand Latin America’s most stable employment market.
Capital
Santiago
Language
Spanish
Average Salary
CLP 1,050,000
Payroll Cycle
Monthly
Employer Cost
5-8%
Paid Leave
15 days
Public Holidays
16 days
Tax Rates
0-40%
Detailed guides on the employment topics that matter most when hiring in Chile. Independently researched, updated for 2026.
Chile's average salary is approximately CLP 1,050,000 to 1,120,000 per month (~$1,100 USD), with a median of ~CLP 800,000. Mining professionals in Antofagasta earn 2 to 3x the national average, while IT roles in Santiago pay $18,000 to $35,000 annually. Employer contributions are currently low at 5 to 8% but a new mandatory pension contribution starting in 2025 will escalate to 8.5% by 2033. The standard workweek drops to 42 hours from April 2026 under Ley 21.561, with no reduction in pay allowed.
Read ArticleChile raised its minimum wage to CLP 539,000/month (~USD 569) on 1 January 2026, completing a 54% increase since 2022. But the headline number is just one piece: Chile is also cutting the workweek to 42 hours in April 2026, adding new employer pension contributions (rising from 1% to 8.5% by 2035), and adjusting the legal gratification cap. This guide covers every number employers need.
Read Article
We independently rank EOR providers based on their actual performance in Chile. The Best EOR in Chile guide evaluates providers across pricing transparency, local entity ownership, onboarding speed, in-country support and contract compliance.
Chile’s pension system is undergoing its biggest reform in decades. The new mandatory employer contribution started in August 2025 and will escalate through 2033. An EOR that isn’t tracking these phased changes will miscalculate payroll costs every year.
When you hire in Chile, the mandatory gratificacion (profit-sharing at 25% of salary), a recent reduction in working hours to 42/week from April 2026, and 18 weeks of maternity leave create employer obligations that are higher than they first appear on paper.
| Key Employment Facts | |
| Minimum Wage | CLP 539,000/month (~USD 560) |
| Probation Period | No statutory probation period |
| Standard Working Hours | 42 hours/week (from April 2026) |
| Paid Annual Leave | 15 working days |
| Notice Period | 30 days (or payment in lieu) |
| Gratificacion | Mandatory (25% of salary, capped) |
| Sick Leave | Covered by health insurance from day 1 |
| Maternity Leave | 18 weeks (6 pre + 12 post birth) |
Good to Know: Chile’s gratificacion is unique in Latin America. Employers must share 30% of net profits with employees, but most opt for the capped alternative: paying 25% of monthly salary up to a maximum of 4.75 Ingresos Minimos Mensuales per year (roughly CLP 2,560,250 in 2026). This cap makes it predictable but it is mandatory, not discretionary, and must be paid monthly or annually. The working week drops from 44 to 42 hours from April 2026 under Law 21.561, with a further reduction to 40 hours scheduled for 2028. Employers cannot reduce salaries to compensate for the shorter hours. Chile has no statutory probation period, meaning unfair dismissal protections apply from day one. Termination without justifiable cause (necesidades de la empresa) triggers severance of 30 days’ salary per year of service, capped at 11 years (330 days). Sick leave is covered by the employee’s health insurance provider (Fonasa or Isapre) from day one of certified illness, not by the employer.
When you hire in Chile, employer contributions of 5-8% are among the lowest in the world for a developed economy. But this number is rising every year. The 2025 pension reform adds a new mandatory employer contribution that started at 1% and will reach 8.5% by 2033, nearly doubling total employer costs over the next seven years.
| Employer Contributions | |
| Contribution | Employer Rate |
| Unemployment Insurance (Seguro de Cesantia) | 2.4% (indefinite contracts) |
| Work Accident Insurance (Ley 16.744) | 0.93% base + 0-3.4% risk premium |
| New Pension Contribution (from Aug 2025) | 1.0% (rising to 8.5% by 2033) |
| Disability/Survivor Insurance (SIS) | ~1.5% |
| Total Employer Cost (2026) | ~5 to 8% of gross |
| Employee Taxes | |
| Tax / Contribution | Employee Rate |
| Income Tax (IUSC) | 0% to 40% (progressive, UTM-based) |
| Pension (AFP) | 10% + ~1.5% commission |
| Health Insurance (FONASA/ISAPRE) | 7% |
| Unemployment Insurance (employee share) | 0.6% |
Total employer cost in Chile currently runs 1.05x to 1.08x of gross salary, among the lowest in the world for a developed economy. However, by 2033 this will rise to approximately 1.13x to 1.17x as the new pension contributions phase in. Budget for annual increases when planning multi-year hiring.
Chile has 16 national public holidays, one of the highest counts in Latin America. Several are irrenunciable (non-waivable), meaning employees cannot be required to work.
|
Date |
Holiday |
|
January 1 |
New Year’s Day (Ano Nuevo) |
|
April 3 |
Good Friday (Viernes Santo) |
|
April 4 |
Holy Saturday (Sabado Santo) |
|
May 1 |
Labour Day (Dia del Trabajo) |
|
May 21 |
Navy Day (Dia de las Glorias Navales) |
|
June 20 |
National Day of Indigenous Peoples |
|
June 29 |
Saints Peter and Paul (San Pedro y San Pablo) |
|
July 16 |
Our Lady of Mount Carmel (Virgen del Carmen) |
|
August 15 |
Assumption of Mary (Asuncion de la Virgen) |
|
September 18 |
Independence Day (Fiestas Patrias) |
|
September 19 |
Army Day (Dia de las Glorias del Ejercito) |
|
October 12 |
Columbus Day (Dia de la Raza) |
|
October 31 |
Reformation Day (Dia de las Iglesias Evangelicas) |
|
November 1 |
All Saints’ Day (Dia de Todos los Santos) |
|
December 8 |
Immaculate Conception (Inmaculada Concepcion) |
|
December 25 |
Christmas Day (Navidad) |
Labour Day (May 1), Independence Day (September 18), Army Day (September 19) and Christmas Day (December 25) are irrenunciable, meaning employers cannot require employees to work on these dates. If a holiday falls on a Tuesday, Monday is often declared a bridge day (sandwich day) by government decree.
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