Employer of Record (EOR) in Chile: Complete 2026 Guide
Guide to using an EOR in Chile — costs, Chilean labor law compliance, top providers, and comparison with setting up a local entity.
Chile is Latin America's most stable and business-friendly economy. With 2.0-2.2% GDP growth forecast for 2026, strong institutions, and a well-educated workforce, it is a top choice for companies expanding into South America.
Chilean employment law includes mandatory AFP pension contributions, a progressive reduction in weekly working hours (42 hours from April 2026, heading to 40 by 2028), and a major pension reform adding new employer contributions. An Employer of Record (EOR) handles this evolving landscape.
Why Use an EOR in Chile?
Working hours reduction. Chile is reducing the workweek from 45 to 40 hours in phases — 42 hours from April 2026, 40 hours from April 2028. Wage reductions are prohibited. An EOR manages the transition.
Pension reform (2025). A new employer pension contribution starts at 1% (August 2025) and rises to 8.5% by 2033. This significantly increases employer costs over time and requires precise calculation.
Mandatory AFP contributions. Employees contribute 10% to individual pension accounts, plus the new employer contribution. Combined with health insurance (7%) and unemployment insurance, total payroll deductions are substantial.
Severance obligations. Termination without cause requires one month's salary per year of service (up to 11 months). Proper documentation is essential.
Important
For a detailed breakdown of Chilean labor laws including minimum wages, AFP/pension, working hours, and leave policies, see our Chile Labor Law Compliance Guide.
Key Employment Regulations
| Regulation | Details |
|---|---|
| Minimum wage | CLP 539,000/month (January 2026) |
| Standard hours | 42 hours/week (from April 2026) |
| Overtime | 150% of regular rate |
| Annual leave | 15 working days |
| Maternity leave | 18 weeks paid |
| Paternity leave | 5 days |
| Public holidays | 16 per year |
| Employer pension (new) | 1% (rising to 8.5% by 2033) |
| Unemployment insurance (employer) | 2.4% |
| Work accident insurance | 0.95% base |
| Severance | 1 month/year of service (max 11 months) |
EOR Costs in Chile
Most EOR providers charge $400 to $600 per employee per month. Statutory employer costs currently add approximately 6-8% on top of salary, but this will rise significantly as the new pension contribution phases in (reaching ~13% by 2033).
EOR vs Setting Up a Local Entity
| Factor | EOR | Local Entity (SpA or Ltda) |
|---|---|---|
| Setup cost | $0 | CLP 1-2M ($8K-$15K) |
| Setup time | 5-10 days | 4-6 weeks |
| Best for | 1-8 employees | 8+ employees |
Break-even point: Typically 6-10 employees. Chile's relatively straightforward entity setup and pension reform changes may shift this lower over time.
Top EOR Providers for Chile
| Provider | Owned Entity | Starting Price | Strengths |
|---|---|---|---|
| Deel | Yes | $599/mo | Strong LatAm presence |
| Remote | Yes | $599/mo | All owned entities |
| Velocity Global | Yes | Custom | Deep LatAm expertise |
| Oyster HR | Partner | $599/mo | Good employee experience |
For a full comparison, see our Best Employer of Record Companies guide.
Managing a Team in Chile?
Track time, monitor productivity, and manage schedules across time zones with HiveDesk. Works with any EOR setup — $5/user/month, all features included.