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Labour Law

Social security payments and related benefits

Most of the social security payments in Chile are burden by the employee. The employer’s obligation is to deduct that payment from the gross salary.
If the employer fails to do so, he can be liable for the payment and this evasion can be considered a felony.
Workers in Chile have to pay a health insurance and provisions for an old age pension. They give 7% of their gross income to health insurance and about 12.5% to provisions for an old pension. Foreign workers are allowed to withdraw the money they paid as provisions for an old pension when they leave the country.
Additionally, there is the unemployment insurance that is paid partly by the employer (2.4%) and partly by the employee (0.6%).
The direct cost of the company is the insurance for work accidents. Usually, the cost is 0.95% of the employee’s salary. This amount may rise if the company has accidents.
Employees are entitled to receive part of the benefits of the company. The employer has the right to choose between two systems: either the company shares 30% of the company’s profit among the workers or the company pays them a fixed amount of 25% of their income with a limit of 4.75 minimum wages (that is about U$120 monthly).

Last modified: 01/07/2019

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