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Chile offers Latin America's most predictable payroll environment with one of the region's lowest employer statutory burdens. Rippling manages AFP pension contributions, PREVIRED submissions, IUT withholding, and the phased 40-hour work week reform.
Chile has one of Latin America's most stable and mature payroll environments, with a well-developed regulatory framework and one of LATAM's lowest employer statutory burdens (~5–8% above salary). The AFP individual pension account system (no employer contribution), PREVIRED electronic payment portal, and IUT progressive income tax are the primary payroll characteristics. A phased 40-hour work week reform (Law 21.561) is progressively reducing the standard week from 45h to 40h through 2028. Santiago is the primary payroll hub.
Chilean SpA (Sociedad por Acciones) or Ltda. can be registered via RES online portal in 1–3 days. SII tax registration, PREVIRED (social security payment system) enrollment, mutual de seguridad enrollment, and cesantía insurance enrollment add 1–2 weeks. PREVIRED is the primary social security payment gateway — all AFP, Isapre/Fonasa, SIS, and cesantía contributions are submitted via PREVIRED monthly.
Rippling runs Chilean payroll through a local SpA entity. Configuration essentials: AFP selection per employee (employee's own account); Isapre/Fonasa routing (7% health deduction to chosen provider); mutual de seguridad enrollment; cesantía insurance; PREVIRED integration; IUT monthly calculation; and teletrabajo addendum for remote employees. Lead time: 2–3 weeks.
SIS (disability/survival insurance): 1.87% of taxable salary. Cesantía: 2.4% of taxable salary. Mutual de seguridad (workplace accident): base 0.93% + variable risk factor. No employer AFP contribution. No employer health insurance contribution (employees fund through 7% deduction). Total statutory employer on-cost: approximately 5–8% of salary. Chile's employer burden is one of the lowest in LATAM.
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AFP (pension): ~10.5% of taxable salary (graduated rates; solidarity surcharge for higher earners 0.9–2.4% above 80 UF/month). Health insurance (Fonasa/Isapre): 7% of taxable income. Cesantía: 0.6% of taxable salary. IUT (income tax — Impuesto Único al Trabajo): progressive escaleta — 0% up to approximately CLP 940,577/month; 4% to CLP 2,090,174; 8% to CLP 3,483,623; 13.5% to CLP 4,877,072; 23% to CLP 6,270,520; 30.4% to CLP 8,360,694; 35% to CLP 20,901,732; 40% above.
Chilean IUT (Impuesto Único al Trabajo) withheld monthly per progressive escaleta (UF-adjusted). 2024 rates: 0% up to approximately CLP 940,577; 4% to CLP 2,090,174; 8% to CLP 3,483,623; 13.5% to CLP 4,877,072; 23% to CLP 6,270,520; 30.4% to CLP 8,360,694; 35% to CLP 20,901,732; 40% above. AFP and health insurance deductions reduce taxable base. Rippling applies the UF-adjusted escaleta each month and remits IUT to SII by 12th of following month.
Vacaciones: 15 working days/year (after 1 year); +1 day per 3 years above 10 years. Can accumulate up to 2 years. Sick leave (licencia médica): Fonasa/Isapre validates; health fund pays from day 1 or 2 depending on cause. Maternity: 18 weeks (12 mandatory) — COMPIN-paid. Paternity: 10 working days. Public holidays: 16 national days. Teletrabajo addendum required for remote employees.
Art. 161 (redundancy): 30 days written notice to employee and Inspección del Trabajo; indemnización por años (1 month/year, capped at 11 months) + 1 month PILON if not given notice. Art. 160 (just cause): no indemnización. Unfair dismissal recargo: 30–100% of indemnización if court finds grounds unjustified. All terminations require carta de despido with specific grounds stated. Rippling manages full termination process.
Annual SII employer declaration (Declaración Jurada de Rentas): filed with SII summarizing employee earnings and IUT withheld. AFP annual employer certificate. PREVIRED annual reconciliation. Rippling generates all year-end Chilean payroll filings.
Statutory: AFP pension (employee ~10.5% into individual account; no employer AFP contribution); health insurance Fonasa/Isapre (employee 7%; employer facilitates); SIS disability and survival insurance (employer 1.87%); cesantía (unemployment insurance — employer 2.4% + employee 0.6%); mutual de seguridad workplace accident insurance (employer 0.93% + variable risk). Market standard: supplemental Isapre or private health plan (upgrade above Fonasa), dental, life insurance, annual bonus, meal allowance. Total statutory employer on-cost: approximately 5–8% of salary — among Latin America's lowest.
Chile is reducing the standard working week from 45 to 40 hours, phased through 2028 under Law 21.561 (enacted 2023): 45h in 2022–2024; 44h from 2024; 42h from 2026; 40h from 2028. Employment contracts must be updated to reflect each phase of the reduction. Rippling tracks the phased reduction and updates payroll configuration accordingly. Employers who fail to adjust face labor court complaints.
PREVIRED is Chile's electronic social security payment portal. All AFP, Isapre/Fonasa, SIS, cesantía, and mutual de seguridad contributions are submitted and paid via PREVIRED monthly. The portal generates the Planilla de Pago showing each employee's contributions by institution. PREVIRED is the single integration point for all Chilean social security obligations. Rippling manages PREVIRED submissions as part of monthly payroll processing.
Chilean income tax (IUT — Impuesto Único al Trabajo) is withheld monthly using the progressive escaleta adjusted monthly by UF (Unidad de Fomento). The UF is Chile's inflation-indexed unit of account. IUT brackets are expressed in UF and adjusted monthly as the UF value changes. This means the CLP equivalent of each bracket changes each month. Rippling applies the current UF-adjusted escaleta each month automatically.
Chile's minimum wage (ingreso mínimo mensual) is CLP 500,000/month from August 2024 (approximately USD 540). Workers under 18 and over 65 have a different minimum. All Rippling payroll employees are paid at or above the applicable minimum wage.
