Employee Benefits in Chile: What Global Employers Need to Know in 2025
Expanding into Chile is an exciting opportunity, but it also brings new responsibilities, especially when it comes to managing employee benefits.
Many employers in Chile offer a unique blend of traditional and modern benefits, reflecting its societal norms that value both work-life balance and financial security. Compared to countries known for generous benefits like Sweden or Canada, Chile's offerings are more conservative, yet steadily improving.
In this guide, we'll cover the basics of managing employee benefits in Chile: who qualifies, what's legally required, and some extra perks to make your company shine.
We’ll also explore how partnering with an Employer of Record (EOR) in Chile can help you simplify benefits management and stay compliant, giving you more time for other business priorities.
Who Qualifies for Statutory Benefits in Chile?
In Chile, statutory employee benefits typically cover individuals with standard employment contracts, including full-time, part-time, and fixed-term roles. These employees are integrated into Chile's social security system, granting them access to benefits such as health insurance, pension contributions, and unemployment insurance.
Generally, benefits commence from the first day of employment, regardless of income level, ensuring immediate coverage for eligible workers.
Who Is Excluded?
Certain categories of workers are excluded from statutory benefits in Chile, including:
- Independent Contractors and Freelancers: These individuals are not covered under the standard social security system. However, since 2019, independent contractors are required to contribute to the Chilean social security system, granting them access to health insurance and pension funds.
- Interns and Temporary Agency Workers: Eligibility for statutory benefits may vary based on the nature of their contracts and the duration of their employment. Specific entitlements depend on individual circumstances and contractual agreements.
For more detailed information on statutory benefit eligibility, you can visit Chile's official Social Insurance Authority or the Labor Ministry.
Statutory Employee Benefits in Chile
Understanding and complying with statutory benefit requirements in Chile is crucial for employers. Non-compliance can lead to legal penalties, damage to reputation, and strained employee relations.
Below I’ve explained all the legally required benefits in Chile, to help you ensure your employees receive the support they’re entitled to.
Health Insurance (FONASA or ISAPRE)
Employers are responsible for enrolling employees in either the public health system (FONASA) or a private health insurer (ISAPRE).
While employers do not contribute directly to health insurance premiums, they must withhold 7% of the employee's taxable income to fund the chosen health plan.
Pension Fund Contributions (AFP)
As of 2025, Chile's pension system mandates contributions from both employees and employers. Employees contribute 10% of their taxable income to their individual pension accounts managed by private pension fund administrators (AFPs).
A recent pension reform requires employers to gradually contribute an additional 8.5% of the employee's salary, with full implementation expected by mid-2033.
Unemployment Insurance (Seguro de Cesantía)
Unemployment insurance provides financial assistance to employees who lose their jobs. Payments are administered to individuals through a national fund.
Contribution rates vary based on the type of employment contract:
- For employees under indefinite contracts, employers must contribute 2.4% of the employee's salary, while the employee contributes 0.6%.
- For employees under fixed-term contracts, employers contribute 3% of the employee's salary, with no requirement for the employee to contribute.
Minimum Wage (Salario Mínimo)
Employers must adhere to the national minimum wage, which is periodically adjusted and regulated by the Código del Trabajo.
As of January 2025, the minimum monthly wage is:
- CLP (Chilean peso) 510,636 for workers aged 18 to 65.
- CLP 380,923 for workers under 18 and over 65.
Vacation Leave (Vacaciones Legales)
Employees are entitled to 15 working days of paid vacation annually after completing one year of continuous service with the same employer. According to Chilean labor codes, at least 10 of these days must be taken consecutively.
Maternity and Paternity Leave (Permiso de Maternidad y Paternidad)
Maternity Leave: Female employees are entitled to 6 weeks of pre-natal and 12 weeks of post-natal leave, fully paid through social security.
Paternity Leave: Male employees are entitled to 5 days of paid leave, which can be taken consecutively or distributed within the first month after the child's birth.
Occupational Health and Safety Compliance (Seguridad Laboral)
Employers are required to maintain safe working conditions, complying with regulations set by the Dirección del Trabajo. This includes adherence to Supreme Decree No. 44/2023, which modernizes occupational health and safety standards.
Anti-Discrimination Policies (Políticas Antidiscriminatorias)
Chilean labor laws prohibit discrimination based on various factors, including race, gender, age, religion, political opinion, and more. Employers must ensure a workplace free from discrimination, promoting equal opportunities for all employees.
These benefits are part of Chile's legal framework, supported by the Código del Trabajo and enforced by the Dirección del Trabajo. Employers must ensure compliance to avoid legal repercussions and maintain a competitive edge in the job market.
Leave Entitlements in Chile
Chile offers a variety of leave entitlements protected by national law, ensuring employees have the necessary time off for personal, health, and family needs. These policies are designed to support work-life balance and protect employees' rights.
Annual Paid Vacation (Vacaciones Anuales)
Employees are entitled to 15 working days of paid vacation per year after completing one year of continuous service with the same employer. At least 10 of these days must be taken consecutively, while the remaining days can be used as agreed upon by the employer and employee.
In certain regions, such as Aysén, Magallanes, and Palena, employees are entitled to a minimum of 20 working days off.
In addition, after ten years of employment (regardless of having changed employers or not), employees accrue one additional day off for every three years of work.
Public Holidays (Feriados Legales)
Chile observes 14 national public holidays throughout the year, plus some regional variations, which are paid days off for employees. The number of holidays varies annually and is mandated by national labor laws.
Some holidays may be moved to a Monday if they fall on a weekend, or additional "sandwich" days may be declared non-working days by the government.
Sick Leave (Licencia Médica)
In Chile, sick leave is granted based on a medical certificate issued by a licensed healthcare provider. This certificate must be submitted to the employer and corresponding health insurance provider (FONASA or ISAPRE) within two working days of the start of the leave.
Sick Leave Compensation Timing and Conditions
- Sick leave is compensated by the health insurer (not the employer) — either FONASA (public) or ISAPRE (private).
- The rules for when payment starts depend on the length of the approved leave, as specified in the medical certificate:
| Duration of Sick Leave | Compensation Start Date | Who Pays |
| 1 to 10 calendar days | From day 4 | FONASA or ISAPRE |
| 11 or more calendar days | From day 1 | FONASA or ISAPRE |
That means if an employee is granted 10 or fewer days of leave, the first three days are unpaid (a kind of "waiting period"). If the doctor issues a medical certificate for 11 days or more, the insurer compensates from day one.
What If the Leave Is Extended Later?
If the doctor initially gives a certificate for fewer than 11 days, but then issues an extension that brings the total to 11 days or more, the employee still does not receive retroactive pay for the first three days. Payment from day one only applies if the initial certificate was for 11 or more days.
This means employees and doctors must consider the likely length of recovery at the time of the initial certification to avoid losing coverage for the first three days.
Sick Leave Compensation Amount
- The sick leave benefit is calculated as a daily allowance based on the average of the employee's last three months of gross earnings, with caps in place.
- For ISAPRE affiliates, additional restrictions may apply, and approval is subject to review by the private health insurance provider.
Maternity and Paternity Leave (Permiso de Maternidad y Paternidad)
As mentioned previously, female employees are entitled to 18 weeks of paid maternity leave, comprising 6 weeks before and 12 weeks after childbirth. Additional leave can also be granted for multiple births or if there are health complications.
Male employees are entitled to 5 days of paid paternity leave, which can be taken consecutively or distributed within the first month after the child's birth.
For both maternity and paternity leave, pay is covered by Chile’s social security system.
Parental Leave (Permiso Parental)
Following maternity leave, female employees are entitled to take 12 weeks of full-time parental leave (during which they receive a benefit equivalent to full pay) or 18 weeks of part-time parental leave (during which they receive a combination of benefits and pay from the employer). A portion of this entitlement may also be transferred to the father.
This leave allows parents to extend their time off after maternity leave with full or partial compensation, supporting family bonding and childcare responsibilities.
Chile's national leave standards are reasonably generous, especially in terms of maternity and paternity leave, compared to many other countries. By providing these leave entitlements, employers foster a more productive and engaged workforce, ultimately benefiting from increased employee satisfaction and retention.
For detailed information on leave entitlements, you can visit the Direccion del Trabajo for official labor law documents and resources.
Common and Additional Employee Benefits in Chile
While not mandatory, many employers in Chile offer additional benefits to enhance employee satisfaction and retention. Many of these benefits are now offered so commonly, that employees in Chile have come to expect them as part of a competitive compensation package.
Included in this category are benefits like supplemental health insurance, performance bonuses, and more, providing employees with added security and perks.
Supplemental Health Insurance
Many employers offer supplemental health insurance to provide additional coverage beyond the public system, reducing out-of-pocket expenses for employees. This benefit is common among major local and multinational employers and is often linked to group life insurance policies.
Performance Bonus
Employers may offer bonuses based on performance metrics, incentivizing productivity and excellence. These bonuses are typically awarded upon achieving specific goals within a set period.
Christmas Bonus (Aguinaldo de Navidad)
An extra payment is often given during the holiday season to show appreciation and boost morale. While not mandated by law, many employers provide this bonus based on contractual agreements or collective bargaining.
Vacation Bonus (Bono de Vacaciones)
This bonus is given to employees taking their annual leave, ensuring they enjoy their time off. It is commonly provided to public sector workers and may vary based on income levels.
Company Cars
Some companies provide company cars, easing transportation-related stress for employees and enhancing job satisfaction. This benefit is more common among executives and sales managers.
Compared to other countries, Chile offers a robust set of additional benefits, enhancing employee satisfaction and retention. Employers providing these benefits often see increased job satisfaction and loyalty, fostering a more engaged and productive workforce.
Benefits That Attract Top Talent in Chile
In Chile, leading organizations offer a range of additional benefits that, while not legally required or culturally expected, significantly enhance competitiveness in attracting and retaining talent. These benefits often include wellness programs, flexible work arrangements, and other perks, reflecting a commitment to employee well-being and satisfaction.
Here are several types of voluntary benefits you may want to offer your Chilean staff to help you stand out:
Wellness Programs
Comprehensive wellness initiatives support employees' physical and mental health, and often include gym memberships, mental health days, and access to counseling services.
Employers may also offer supplemental health insurance to cover costs that aren’t fully reimbursed by the mandatory system, such as higher specialist fees, certain medications, or dental/optical care.
Flexible Work Arrangements
Offering remote work options and flexible hours allows employees to balance personal and professional responsibilities, enhancing job satisfaction. Chile's labor law allows flexible working hours through arrangements like compressed workweeks, staggered hours, and remote work agreements.
Professional Development Opportunities
Employers may provide training programs, workshops, and tuition reimbursement to foster career growth and skill development. Access to professional development and growth opportunities can help employees enhance their skills, grow their careers, and foster stronger employee loyalty.
Childcare Support
Some companies offer childcare allowances or on-site daycare facilities, making it easier for working parents to manage family commitments. Chile provides childcare benefits in the form of allowances, tax concessions, fee rebates, and increases in other benefit entitlements.
Employee Recognition Programs
Regular recognition and reward programs boost morale and motivate employees by acknowledging their contributions. Employee rewards and recognition programs are organized systems designed to honor, recognize, and thank employees for their hard work, achievements, and contributions.
Sabbaticals & Extended Leaves
Offering extended leave for personal development or rest can rejuvenate employees and improve long-term productivity and engagement. Sabbaticals or extended leave can improve employee engagement and retention.
While Chile's national standards are robust, offering these additional benefits can significantly enhance an employer's appeal. By investing in these employee perks, companies not only foster a more satisfied workforce but also position themselves as leaders in employee care and innovation.
How to Set Up and Manage Employee Benefits in Chile
Setting up and managing employee benefits in Chile requires careful planning and adherence to national regulations. Here's an overview of the key steps a company should follow to establish and administer a comprehensive benefits program:
1. Partner with Local Benefits Providers
Collaborate with local health insurers, pension fund administrators (AFPs), and other service providers to offer statutory and additional benefits. This ensures that employees receive high-quality services tailored to local standards.
2. Ensure Compliance with Regulations
Familiarize yourself with the Código del Trabajo and regulations from the Dirección del Trabajo to ensure all benefits align with legal requirements. Regularly consult official resources to stay updated on any changes in the law.
3. Communicate Benefits to Employees
Clearly communicate the benefits package to employees, highlighting the value and specifics of each offering. Use meetings, written materials, and digital platforms to ensure all employees understand their entitlements.
4. Monitor and Update Benefits Offerings
Regularly review and update the benefits package to keep it competitive and aligned with employee needs. Gather feedback from employees to identify areas for improvement and adjust offerings accordingly.
5. Outsource to an EOR Service
Consider using EOR services in Chile to simplify benefits management. An EOR can handle compliance, payroll, benefits administration, and even work permit agreements, allowing you to focus on growing your business.
By partnering with a Chilean EOR, you’ll avoid all the hassles described above by outsourcing these tasks completely. With the EOR’s help, you’ll also be able to hire staff legally in Chile without opening a legal entity abroad. Otherwise, you’ll be relegated to hiring international contractors only.
By following these steps, employers can develop an effective benefits strategy that meets legal standards and supports employee satisfaction and retention.
Stay Compliant with Local Employment Laws
If you don't follow Chile's employment laws, your company could face serious consequences. In Chile, potential compliance violations may include employee misclassification or underfunding social security, leading to hefty corporate fines or penalties.
Here are several key areas of concern to be aware of:
Employee Misclassification
Misclassifying employees as independent contractors can result in severe penalties. Consequences may include:
- Labor Court Fines: For "simulation" or fraudulent hiring practices.
- Back Payments: Retroactive social security contributions, benefits, and taxes.
- Legal Action: Misclassified workers can file claims for labor rights violations.
Underfunding Social Security
Failing to contribute properly to Chile's social security system can lead to penalties and interest charges. Employers are required to make contributions to various social security funds, including pensions, health insurance, and unemployment insurance.
Corporate Fines
Non-compliance with labor laws can result in significant financial penalties. For instance, failure to adhere to regulations regarding employment contracts, working hours, and employee benefits can attract fines from the Dirección del Trabajo (Labor Directorate).
Reputation Damage
Legal issues stemming from non-compliance can harm a company's reputation and erode employee trust. Maintaining compliance demonstrates a commitment to fair labor practices, which can enhance a company's standing in the market.
Operational Disruptions
Legal actions, such as lawsuits or government investigations, can distract management and disrupt business operations. Ensuring compliance helps maintain smooth and uninterrupted business activities.
By staying compliant with local employment laws, you’ll protect your company from legal troubles and maintain a positive work environment.
Get Support Setting Up Benefits in Chile
Offering a competitive benefits package is crucial for attracting and retaining top talent in Chile. Aligning your benefits with legal requirements and employee expectations ensures compliance and boosts satisfaction.
You’ll want to include a mix of benefits that meet statutory obligations like health insurance and pensions, while also incorporating additional perks like wellness programs and flexible work options.
Staying compliant with local laws protects your company from penalties and enhances your reputation as an employer of choice. However, managing ongoing compliance is a full-time job, which is even more challenging if you don’t have boots on the ground in Chile already.
That’s why many global companies choose to partner with an Employer of Record service, to simplify the process of hiring employees significantly.
If you’re ready to take the next steps, here’s my list of the best EOR providers in Chile to save you hours of your own research so you can put that time into managing your business.
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