Payroll in Chile
Get your Chilean payroll's rising employer pension contribution, gratificación legal, and severance calculations right, so a figure that was correct last year never quietly goes stale.
2026 Employer Pension Contribution Rate
3.5% (effective August 2026, rising to 8.5% by 2033)
Tax ID
RUT
Primary Registry
Dirección del Trabajo
Payroll in Chile: What You Need to Know
Chile's employer payroll burden has historically been among the lowest in Latin America, roughly 3.3% of gross salary for indefinite contracts, work-accident insurance around 0.9% to 1.0% plus a 2.4% employer share of unemployment insurance. The 2025 pension reform, Ley 21.735, introduced Chile's first-ever employer pension contribution, phasing from 1.0% in 2025 to 3.5% in 2026 and rising annually to a final 8.5% by 2033. Gratificación legal is owed under either Article 47, 30% of annual liquid profit, or Article 50, 25% of annual remuneration capped at 4.75 monthly minimum wages, and only when the company actually profits, unlike a fixed 13th-month bonus. Vacation runs 15 working days per year after one year of service, accrued at 1.25 days per month, with Saturdays excluded as working days. Severance is capped at 11 years of service, one month's last remuneration per year with the salary base capped at 90 UF, plus 30 days' notice or payment in lieu. Income tax is withheld through the Impuesto Único de Segunda Categoría's 8 progressive brackets from 4% to 40%, exempt below 13.5 UTM per month.
Key Requirements
Employer payroll burden historically among the lowest in LATAM, roughly 3.3% of gross salary for indefinite contracts before the pension reform, work-accident insurance around 0.9% to 1.0% plus a 2.4% employer share of unemployment insurance
2025 pension reform, Ley 21.735, introducing Chile's first-ever employer pension contribution, phasing from 1.0% in 2025 to 3.5% in 2026, rising annually to a final 8.5% by 2033
Gratificación legal, either 30% of annual liquid profit under Article 47 or 25% of annual remuneration capped at 4.75 monthly minimum wages under Article 50, owed only when the company actually profits
Vacation, 15 working days per year after one year of service, accrued at 1.25 days per month, with Saturdays excluded as working days
Severance capped at 11 years of service, one month's last remuneration per year with the salary base capped at 90 UF, plus 30 days' notice or payment in lieu
Income tax withheld through the Impuesto Único de Segunda Categoría's 8 progressive brackets from 4% to 40%, exempt below 13.5 UTM per month
Common Challenges
The employer burden is a moving target right now, not a stable figure to quote once
A 3% employer-contribution figure from an older source is already stale as of the 2025 pension reform, and the rate is scheduled to keep rising every year through 2033, so any figure needs a stated effective date.
Gratificación is profit-contingent, not a guaranteed 13th month
A loss-making subsidiary owes nothing under either Article 47 or Article 50, unlike most of LATAM's fixed aguinaldo obligation, a real difference foreign employers used to a guaranteed bonus often miss.
Fixed-term and project contracts flip who pays unemployment insurance
An indefinite contract splits the 2.4% employer unemployment-insurance contribution with the employee's 0.6%, but a fixed-term or project contract shifts the full 3.0% to the employer alone, a nuance that trips up payroll setups defaulting to one contract type's math.
How NavviPal Helps
Employer pension, work-accident, and unemployment insurance contribution calculation, tracked against the current phase of the 2025 pension reform's rising schedule
Gratificación legal structuring under Article 47 or Article 50, whichever the contract specifies, and profit-based calculation each year
Vacation accrual and severance calculation capped correctly against the 11-year and 90 UF salary-base limits
Income tax withholding through the Impuesto Único de Segunda Categoría's current bracket table
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