Chile’s talent pool boasts a high number of skilled tech professionals, with skills in AI integration, digital information, software support, IT training, and IT consulting. For U.S. companies, hiring employees in Chile is also cost-effective and convenient time-zone-wise. This is why many are now looking to this South American country to meet their recruitment needs.

In this guide, we explain how U.S. companies can hire in Chile. We cover hiring methods, legal considerations, and how an Employer of Record (EOR) like Payoneer Workforce Management can help simplify the international hiring process.

How to hire in Chile

If your company is based in the U.S. but you want to hire employees in Chile, there are three key options to choose from: setting up a legal entity in Chile, hiring contractors in Chile, or using an Employer of Record. 

Let’s look at the pros and cons of each approach.

1) Set up a legal entity in Chile

When you register your business in Chile, you can hire Chilean employees directly. This is a feasible option if you’re looking to expand operations into Chile and establish a long-term presence there.

However, setting up a legal entity is a time-consuming and expensive process. It may also require the support of a specialized team with a comprehensive understanding of an employer’s legal obligations in Chile. This includes payroll, labor laws, and tax regulations. As such, this approach isn’t suited to companies looking for fast or flexible hiring solutions.

2) Hire contractors in Chile

For limited-scope projects, you can hire contractors in Chile. This provides flexibility and allows you to hire without setting up a legal entity. But it can be risky. Misclassification of an employee as a contractor can lead to serious fines and penalties.

3) Use an Employer of Record

An Employer of Record in Chile is a third-party entity that employs Chilean workers on your behalf. You don’t need to set up a legal entity in Chile, and you reduce risk because a team of local experts help manage compliance. 

Here’s how it works: While your company manages the day-to-day work of the local hire, the EOR assists with the onboarding process, payroll, taxes, and statutory benefits. They help you manage legal obligations while simplifying the global hiring process.  

Find out more about Employer of Record in Chile.

Where to find employees in Chile

You can find the right Chilean talent for your organization by using specialized job boards, recruitment agencies, or an EOR.

Popular job boards in Chile

Popular places to advertise jobs in Chile include:

• Chiletrabajos
• Trabajando
• Computrabajo
• Laborum
• LinkedIn
• Indeed

When using job boards, you manage the recruitment process from end-to-end.

Work with local recruitment agencies

Another option for finding employees in Chile is working with local recruitment agencies.

An agency can help you overcome cultural and language barriers, so your job ads resonate with a Chilean audience. They also usually have a readily available talent pool, helping you fill vacancies quickly.

The downsides of this approach? Working with recruiters often means paying significant fees, and while a recruiter provides ample help with the recruitment process, you’re left to manage onboarding, employment contracts, and payroll.

Recruit through an EOR

Hiring employees in Chile through an EOR allows your business to take control of the recruitment process and candidate selection, with advice from local experts.

An EOR, like Payoneer Workforce Management, may provide support with paperwork and compliance. They help draw up employment contracts, assist with onboarding, and provide guidance regarding statutory benefits.

Onboarding employees in Chile

When you hire in Chile, the onboarding process is critical. An effective strategy helps your new hire hit the ground running. It also helps your company stay on the right side of local labor laws.

Here’s what you need to do when onboarding employees in Chile:

• Gather required documents, including employee ID, address, and education/employment certificates
• Draw up the employment contract and register the contract with the Dirección del Trabajo
• Register the employee with the relevant social security institutions
• Provide bilingual onboarding and training materials, including guidance on workplace culture, company policies, expectations, and objectives
• Make introductions to the team and colleagues, and assign an onboarding buddy
• Set up all the devices and workplace software for the employee 

An EOR can help to streamline the onboarding process by compiling employment contracts and collecting relevant documents from new hires.

Employment practices and regulations​

When hiring in Chile, employment practices and regulations are another important consideration. As in any country, there are extensive labor laws to follow. Here’s an overview of what you need to know.

Employment contracts

Employment contracts outline what duties the employee will carry out and how they will be compensated. In Chile, contracts must be in writing, in Spanish, and signed by both parties within 15 working days of hiring. Contracts also need to be registered with the Dirección del Trabajo.

Contracts should include, at a minimum, the following details:

• The place and date of the contract
• Identification of both parties, including nationality, address, email address, and birth date
• Employee start date
• A description of the work to be undertaken by the employee
• The place and city in which the work will take place
• The amount, form, and period of payment
• Duration and distribution of the workday
• Duration of the contract

Employee benefits

When you hire in Chile, your employees are entitled to statutory benefits, including the following:

• Sick leave: Employees are entitled to sick pay, paid for by insurance, when they are sick for 4 days or more. Employees need to provide a doctor’s note to receive sick leave payments.
• Maternity leave: Female employees may be entitled to a minimum of 18 weeks of maternity leave, 6 weeks to be taken before the birth of their child and 12 weeks afterwards.
• Paternity leave: Male employees are entitled to 5 days of paternity leave to be taken within 1 month of their child’s birth.
• Pension/social security: Employers contribute to unemployment insurance, work-related injury insurance, health insurance, and pension funds on behalf of employees.

Working hours and holidays

The standard workweek in Chile is 45 hours over 5–6 days; max 9 hrs/day. A regular workday shouldn’t exceed more than 10 hours per day.

Employees may be entitled to a minimum of 15 vacation days after completing 1 year of service. This holiday entitlement increases by 1 day for every 3 additional years worked. However, it is not mandatory.

Also, there are 24 public holidays in Chile, out of which 12 are civil holidays, 9 are religious holidays, and 3 special holidays (based on regions).

Income tax

Employers must 

Employers have to withhold employee taxes in Chile. Income tax in Chile is charged at a progressive rate, with 8 tax bands ranging from 0% to 35%. These tax bands and thresholds are not fixed in the local currency. Instead, they are based on a monthly tax unit, called the Unidad de Fomento (UF), which is constantly adjusted for inflation.

The UF is valued at CLP 36,733.14, and tax bands are as follows:

Income bracket (in monthly tax units)	Tax rate
0 to 13.5	0%
13.5 to 30	4%
30 to 50	8%
50 to 70	13.5%
70 to 90	23%
90 to 120	30.4%
120 to 310	35%

Social security

Employers are responsible for withholding social security contributions from employees for pension, health & unemployment insurance. 

Other payroll responsibilities

Every employer with 5 or more employees has to keep a subsidiary salary book, which must be submitted to the Internal Revenue Service within 15 days of a salary payment being made. This process is managed electronically.

Termination and severance

If a company or an employee wants to terminate the employment contract, they can do so by giving 1 month’s notice.

If the company terminates the contract, an employee is entitled to severance pay. This is roughly equivalent to 30 days’ salary for each year of service, up to a maximum of 11 months’ pay. The employer has to inform the Inspección del Trabajo about the dismissal, too.

An employer can terminate a contract without notice in cases where an employee is found guilty of gross misconduct or breach of contract. However, the employer has to prove their case. Where an employee is found to have been wrongly dismissed, they are entitled to severance pay, plus a 30% to 100% severance pay surcharge.

Payoneer Workforce Management helps hire employees in Chile

As a U.S. company looking to hire in Chile, there’s a lot to consider, from statutory benefits to payroll to onboarding to employee contracts.  

You need to understand your obligations as an employer so you can comply with local labor laws and avoid fines or penalties. You also need to decide how to hire employees in Chile, by setting up a legal entity, by hiring contractors, or by working with an Employer of Record.

Using Payoneer Workforce Management as your EOR helps streamline hiring in Chile. You can hire independent contractors and full-time employees in Chile and 160+ other countries, without setting up a local legal entity.

Our unified platform allows you to:

• Onboard local hires quickly
• Run global payroll securely in a few clicks
• Get guidance on local employment laws
• Manage taxes, benefits, timesheets, and more

From hiring in days to multi-currency payroll, Payoneer Workforce Management can help with your business needs to hire, pay, and manage a global team.

Speak to our experts today.

FAQs

1) Can a U.S. company employ someone living in Chile?

Yes, a U.S. company can employ someone living in Chile. But you need to understand your obligations regarding local labor laws. The way you choose to hire employees in Chile will depend on the needs and capabilities of your business.

2) How do I hire a Chilean for a U.S. company?

To legally employ someone in Chile, you have to set up a legal entity in Chile, hire a worker as a contractor, or work with an Employer of Record in Chile.

Setting up a legal entity is time-consuming and costly. Hiring workers as contractors comes with a risk of misclassification. Partnering with an EOR comes at a cost, but it allows you to hire in Chile quickly and flexibly.

3) How can an EOR help U.S. companies hire in Chile?

An Employer of Record is a third-party that legally hires employees in Chile on your behalf. An EOR also assists with simplifying the complexities of global hiring. They help U.S. companies with recruitment, employment contracts, onboarding, payroll, and labor law compliance.