Hiring in Chile in 2026: the 42-hour week, the pension reform and the real cost of one hire.

Chilean payroll looks light, but the employer share rises every year to 2033 and the week shrinks to 40 hours by 2028. Here are the 2026 rules, a worked salary, the options without a Chilean company — and how Paraguay compares.

Cheaper on paper than Brazil — and getting dearer every year.

Chilean payroll looks light at first: the employer pays only about 7% on top of gross salary, because most social security comes out of the employee’s pay. That is changing. The 2025 pension reform adds an employer contribution that rises every year to 8.5% in 2033, and the working week is falling from 45 hours to 40 by 2028. Add the gratificación, severance and a new workplace harassment law, and a hire in Chile needs more planning than the headline rate suggests.

This guide walks through the 2026 rules, a worked example of one salary, the options if you have no Chilean company, and a comparison with Paraguay.

42 hours since April 2026.

The reduction applies to full-time contracts without a pay cut. Employers can average hours over four weeks by agreement, and overtime is paid at 50% extra, capped at two hours a day. If you hire now, write the contract to the 42-hour week and plan the 2028 step into the budget.

Law and practice: Law 21,561 (2023); Labour Directorate opinion 253/21 and later guidance.

What the employer pays from August 2026.

The pension reform contribution is the one that moves. It started in August 2025 and steps up every year until 2033, when it reaches 8.5% of taxable pay. Part goes to the employee’s individual account and part to a new social insurance fund.

Law and practice: Law 21,735 (pension reform, 2025) and its transitional articles; Law 19,728 (unemployment insurance); Law 16,744 (work accidents); Law 21,010 (SANNA).

CLP 2,000,000 a month, both sides.

The example assumes an indefinite contract, the Habitat pension fund and the statutory 7% health contribution; a private health plan (Isapre) can cost the employee more. It does not include the gratificación, which many contracts build into the salary — check yours.

Law and practice: UTM CLP 72,151 and UF about CLP 41,057 for October 2026; employee income tax under LIR art. 43. Illustrative figures.

Gratificación, notice and severance.

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  Gratificación

  Companies with profits share them, and most pay the simpler alternative: 25% of salary, capped at 4.75 minimum wages a year — about CLP 219,000 a month today.

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  Notice

  30 days, or pay in lieu.

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  Severance

  For dismissal on business grounds: 30 days’ pay per year of service, capped at 11 years and calculated on pay up to 90 UF.

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  Fixed-term contracts

  Up to one year (two for professionals); renewing twice makes them indefinite.

Law and practice: Labour Code, arts. 47–50 (gratificación), arts. 159–163 (termination and severance). Minimum wage CLP 553,553 from 1 May 2026 under Law 21,830.

The workplace harassment law every employer must apply.

Since August 2024, Law 21,643 (Ley Karin) requires every employer to have a protocol to prevent sexual and workplace harassment and violence, include it in the internal rules, train staff and investigate complaints — internally within about 30 days or by referring them to the Labour Directorate. It applies from the first employee, foreign-owned or not.

Breaches are fined on the Labour Code scale, which rises with company size. In practice, the risk is less the fine than a complaint arriving with no protocol in place.

Law and practice: Law 21,643, in force 1 August 2024; Labour Code, art. 506 (fines).

Employer of record, or a SpA.

Chilean employment needs a Chilean employer. Without a company, an employer of record (EOR) hires the person for you, for roughly US$599–699 a month per employee at the main providers. For one or two people that is usually cheaper and faster than a SpA with its accounting, patente and bank account.

Contractors (honorarios) are common in Chile, but a person who works your hours under your direction is an employee whatever the contract says. A Labour Court can reclassify them, with contributions, severance and fines.

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  Under three people

  EOR first.

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  A team, or sales in Chile

  A SpA makes sense — see our SpA guide.

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  Foreign staff

  Companies with more than 25 employees must keep at least 85% Chilean; specialists can be excluded.

Law and practice: Labour Code, arts. 19–20 (85% rule). EOR list prices, October 2026.

The same role, two places.

For a regional role that does not need to sit in Chile — finance, support, operations — Paraguay is often the cheaper base, with a 48-hour week and lower salaries. For anything customer-facing in Chile, the Chilean contract is the honest option.

Straight answers.

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