Employer of record in Chile: costs and rules

What makes Chile different for employers

A pension reform with a fixed schedule. The 3.5% employer contribution from August 2026 splits into 0.1% to the worker's individual account, 1.0% to the life-expectancy social insurance, 0.9% to protected returns and 1.5% SIS, according to the Subsecretaría de Previsión Social. It was 1.0% from August 2025. One open question: the deck counts SIS inside the 3.5%, and we have not confirmed whether employers still pay a separate SIS premium. If they do, the cost is understated.

The work week is shrinking. Under Ley 21.561 the standard week fell to 42 hours on April 26, 2026 (from 44) and goes to 40 hours on April 26, 2028.

Caps are set in UF, an inflation-indexed unit. Pension, health and Ley 16.744 contributions stop at 90 UF a month from February 1, 2026 (89.9 UF in January). Unemployment insurance stops at 135.2 UF (135.1 UF in January).

The minimum wage is CLP 539,000 a month for workers aged 18 to 65 from January 1, 2026 (Ley 21.751), and CLP 402,082 for those under 18 or over 65.

Dismissal for business needs (art. 161) needs 30 days' notice or 30 days' pay in lieu, and after one year of service it triggers severance for years of service. Both are calculated on a monthly base capped at 90 UF, according to the Dirección del Trabajo.

Employment costs and rules in Chile

What an EOR charges to employ someone in Chile

Chile's employer pension contribution, 2025 to 2033

Every August the same salary costs more. Ask the EOR whether its quote shows the current step only, and whether its invoice updates automatically each August.

Costing a Chilean hire with the data we have

We have not read an official CLP exchange rate (the ECB does not publish one), so we do not convert a USD 40,000 sample salary, and the EOR fee stays in dollars: $599 a month is $7,188 a year. On a CLP 1,000,000 monthly salary the confirmed portion of the employer cost is CLP 35,000 a month from August 2026 to July 2027. That is not the full employer cost.

We have not yet confirmed from an official source the employer unemployment insurance rates, the work-accident mutual rate, the legal bonus (gratificación), the severance formula, vacation days or public holidays. Each adds to the real cost, so ask the EOR for a written breakdown and check it with the Dirección del Trabajo. Use the international employee cost calculator once your quote is in, and see other Latin American countries in the EOR cost index.

Which EOR to pick for Chile

Our published scores rank Multiplier first at 79 ($459 a month annual, $499 monthly) and Oyster second at 64 ($699 flat, deposit of at least one month of service cost). Remote (62) and Deel (54) list $599. For Chile, the useful questions are whether the SIS is inside the 3.5% or billed separately, and whether the quote includes the gratificación. Compare in our ranking of EOR providers, and read the Oyster, Remote and Deel reviews.

Contractors in Chile

Paying a Chilean worker as a contractor avoids the pension contribution and payroll charges, which is the amount at risk if a full-time, exclusive arrangement is treated as employment, along with the business-needs notice and severance. A contractor of record carries that classification risk; a contractor management platform only processes contracts and payments.

Your own Chilean company instead

At $7,188 a year in fees per person, a team of five costs $35,940 a year through an EOR at $599 a month. A Chilean entity drops that fee but adds incorporation, local accounting and a payroll that tracks the annual pension steps. The EOR or entity decision guide covers the break-even.