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The Labor Code of Chile entitles employees to an annual leave of 15 working days with full salary after a full year of service with their employer. The leave time adds up to 21 consecutive days (including weekends) or a total of three weeks. Fixed-term employees who provide continuous services to the same employer by virtue of 2 or more contracts that exceed one year are also entitled to the same annual leave.

Employees with over ten years of experience receive one extra day of annual leave for every three years of service beyond ten years. The annual leave can be broken into segments, with one of the parts being at least ten days. If an employee has two consecutive periods of vacations lined up, the employer must instruct the employee to take a minimum of 15 days off from work before the end of the year.

The Chilean Labor Code establishes that, in the event of an employee's illness, the employer must immediately notify the relevant social security agency and maintain the employee’s position for a specified period, without entitlement to remuneration, depending on the employee’s length of service with the company - 8 days for less than 6 months of work, and 15 days for less than 12 months, and 30 days for more than 12 months of work.

Employees are eligible to take sick leave after a medical professional (physician, surgeon, dental surgeon, or midwife) issues a medical certificate stating that the employee is temporarily unable to work. The certificate must be authorized by the relevant health institution. The employee must submit the certificate to their employer within 2 working days of starting the sick leave.

Employees are entitled to payment of the Subsidy for Work Disability (SIL), or remuneration, if they have been affiliated with a health insurance for at least 6 months and have paid at least 3 months of contributions within the 6 months prior to the start of the sick leave. SIL covers sick leave from the first day if it is more than 10 days, or from the fourth day if it is equal to or less than 10 days. The amount of benefit is equal to the average daily wage of the employee over the last 6 months. Employees cannot be dismissed during medical leave unless a legally established cause for termination exists.

The labor code of Chile entitles female employees to a maternity leave of 6 weeks before delivery and 12 weeks after delivery. The leave is extended, as prescribed by the doctor, in case of any complications during the pregnancy or childbirth. If the birth occurs before the 33rd week of gestation or if the birth weight is less than 1,500 grams, the leave after childbirth is extended to 18 weeks. For multiple births, the maternity leave is increased by 7 calendar days for each child born after the second one.

The benefits for this leave is paid by social insurance. To qualify for maternity benefits from social insurance or mandatory private insurance, employees must have at least 6 months of contributions, including at least 3 months of contributions in the last 6 months.

There is a maternal subsidy for women without a valid employment contract, paid by the Social Security Superintendence.

The Chilean Labor Code provides employees with paid paternity leave of 5 days, which can be used within the first month from the date of birth. The leave must be used continuously, excluding weekly rest days. The leave is to be paid by the employer. Employees who adopt a child are also entitled to paternity leave.

If the mother died during childbirth or during the period of maternity leave, the remaining leave and allowance is transferred to the father or to whomever custody of the minor was granted.

Minimum Wage

The minimum wage in Chile is adjusted annually. Currently, the standard monthly minimum wage for employees between 18 and 65 is CLP 539,000 (Chilean pesos). The minimum wage for employees under 18 and over 65 is CLP 402,082. Part-time employees are due a proportional amount of the minimum wage based on their hours of work.

Overtime, Holiday & Vacation Pay

Overtime hours cannot be more than 2 hours per day. Overtime pay is 50% of normal daily wages of the employee in addition to their normal wages. Employers and employees may agree in writing to compensate overtime hours with time off at a rate of 1.5 hours for each hour of overtime, up to a maximum of 5 days per year.

Overtime can only be agreed to meet the needs or temporary situations of the company. These agreements must be in writing and have a transitory validity of no more than 3 months, and may be renewed by agreement of the parties.

Working on public holidays is allowed in certain industries where employees can be compensated with alternative rest day or paid overtime pay for working on holidays. Employees are also entitled to full pay while on their annual leave.

Notice Period

The Labor Code of Chile requires a notice period of 30 working days to an employee for dismissal due to business reasons. The notice must be in writing and clearly indicate the reason for dismissal. A copy is to be sent to the Labor Inspector. The notice period can be waived off by paying salary in lieu of notice.

Severance Benefits

The Chilean Labor Code entitles dismissed employees who have completed at least 1 year of service to severance pay equal to 30 days' salary for each year of work, limited to 330 days’ salary. Any partial year of work exceeding 6 months is counted as a full year. Employees with fixed-term contracts are also eligible for severance pay at the end of their contract, if the contract has been in effect for at least a month. The amount is 2.5 days' pay for each month worked and any fraction thereof exceeding 15 days.

Employees dismissed by their employer for business reasons or wrongful reasons are eligible for severance. Severance pay is not paid to those who are dismissed for gross misconduct or just cause.

Pension

Chile’s pension system is primarily based on a mandatory individual capitalization scheme, under which employees contribute 10% of their salary to individual accounts managed by private pension fund administrators (AFPs). The statutory retirement age is 65 for men and 60 for women.Pension benefits are calculated based on the balance accumulated in the individual account, investment returns, and the chosen withdrawal method at retirement, such as programmed withdrawals or a life annuity. In addition, the government provides a Universal Guaranteed Pension (PGU) for eligible residents aged 65 or older with lower pension income.

Starting January 1, 2026, a new benefit called the "Benefit for Years of Contribution" is available to those who are 65 years of age or older and who meet the minimum contribution requirements. This benefit consists of a payment of 0.1 Unidades de Fomento (UF) for each year of contributions, with a maximum limit of 25 years (300 months of contributions), that is, up to 2.5 UF. A UF is an inflation-indexed unit of account, calculated and published by the Central Bank of Chile.

Effective January 1, 2026, women retirees are also eligible for a new benefit, "Life Expectancy Difference Compensation," eliminating the difference that arises because women live longer, which previously reduced their monthly pension compared to men. Women who have contributed to their individual account and who are not covered by the Disability and Survivor Insurance (SIS) will receive an extra monthly compensation, with a minimum amount of 0.25UF each month, which is added to their pension.

The Universal Guaranteed Pension (PGU) is for persons who are at least 65 years old and have a base pension of less than CLP 789,139. People aged 82 or older receive a maximum amount of CLP 250,275, and those between 65 and 81 years of age will receive a maximum of CLP 231,732. Those who have a base pension of more than CLP 1,252,602 are not eligible for the universal pension. The PGU limit has been increased and will be available to those aged 75 from September 2026 and to those aged 65 from September 2027.

Effective September 1, 2022, social security coverage and employment protections will extend to those employed by digital platforms, and those employees will be classified as either formal employees or self-employed. The extended protections allow employees of digital platforms to access old-age, disability, and survivor pensions as well as health insurance and other social security benefits.

Dependents/Survivors Benefits

The Social Security Institute provides survivor benefits to the spouse, children, and parents of the deceased insured person. The widow is entitled to receive 50% of the pension that the deceased would have been eligible to if they were permanently disabled for one year prior to death. The pension is 60% if there are no common children. The benefit is paid for life if the widow is disabled or has reached the age of 65 years at the time of death of the insured person. All legitimate, natural or adopted children of the deceased, below age 15 are eligible for a monthly pension equal to 15% of the deceased’s average monthly salary. The pension is 11% of the deceased person's average monthly salary for partially disabled children under 24 years. If there are no other survivors, the benefit amount for the deceased person's parents is 36% of their average monthly salary, and it is 30% if there are dependent children. The fund is sourced by contributions made by employees in the amount of 1.53% of their monthly wage.

Invalidity Benefits

The Social Security Institute of Chile is responsible for providing life and disability insurance. In order to be eligible for disability pension, the following conditions must be fulfilled:

• They must be declared absolute or partial disabled. If the employee is unable to procure an income equal to at least 30% of the usual salary earned by a healthy worker in similar conditions, he/she is declared as absolutely disabled. If the person is able to earn more than 30%, but less than 60% of the remuneration earned by a healthy worker in similar conditions, he/she is declared to be partially disabled.
• They must have at least 50 weeks of insurance
• They must be below the age of 65 years at the time of beginning of disability

Monthly pension for absolute disabled persons is 50% of the average monthly salary of employees for the last five years before retirement, increased by 1% for every 50 weeks of insurance in excess of 500 weeks. Source of funds same as those for retirement.

There is a universal disability benefit, PBSI (Basic Solidarity Disability Pension) for persons between 18 years and under 65 who are declared disabled and are not eligible for any pension. They must have 5 continuous or discontinuous years of residence in Chile in the last 6 years immediately prior to the filing date of the application. The amount of this benefit is CLP 250,000 per month.

Personal Income Tax

Per Chile's income tax code, all individuals who are domiciled in or are residents of Chile are subject to income tax on their income from sources within and outside of the country. Foreign residents are only subject to income tax on their income from Chile for the first 3 years, and after that are liable to pay income tax on their worldwide income.

The tax slabs on income in Chile are set monthly, depending on the annual tax unit set by the government. Rates range from 0-40% of total income. The annual tax unit for October 2025, for example, is set to CLP 831,180 (Chilean pesos) by the Central Bank of Chile. This unit changes every month and is determined by the Central Bank of Chile according to inflation.

Visas

• Tourist – issued to those who visit Chile for tourism purposes, with a validity of 90 days
• Diplomatic - issued to those who work in diplomatic or consular departments and their families for the duration of their mission
• Resident (includes student and political asylum) - issued to people who wish to stay in Chile for longer durations than 90 days

While citizens of several countries (such as the US, Canada, and Germany) may travel to Chile only on a passport, others require a visa.

Effective September 17, 2025, nationals from 104 countries are required to obtain prior authorization to enter Chile for temporary residence.

Work Permits

Foreign employees in Chile are required to receive a residence permit or visa, subject to a contract that is valid for up to 2 years and can be extended for the same period. To obtain this visa, the employee must attach an employment contract with the application. If the employment relationship is terminated, the visa expires. A request for permanent residency in Chile can be made after 2 years of holding this type of residence visa.

The temporary residence visa also allows holders to carry out any activity in Chile, with no limitations other than those established by law. It is issued for a maximum period of 2 years, at the end of which the foreign national must apply for permanent residence or leave the country. It can only be extended for up to 2 additional years. The Ministry of the Interior and Public Security can authorize tourists who have a valid permit to work in the country for a period of no more than 30 days, extendable for equal periods until the expiration of the visa.

Under the law, in companies with more than 25 employees, 85% of the workforce must be Chilean citizens.

The legal working age is 18 years in Chile. Those below 18 years and above 15 years can be employed in light work with consent from parents. The working hours of minors under 18 years of age cannot exceed 30 hours per week, distributed over a maximum of 6 hours per day during the school year and up to 8 hours per day during the interruption of the school year and during the vacation period.