Chile — Business: Payroll

Why this matters

Understanding Chilean payroll regulations is crucial for companies to avoid fines and ensure compliance, which can impact their reputation and bottom line.

Key facts

• The minimum wage for workers aged 18 to 65 is CLP 553,553 from 1 May 2026 under Ley 21.830; an InvestChile page gives a different figure, so treat the official one as authoritative.
• The rate for under-18s and over-65s is CLP 412,938 from the same date.
• On 1 January 2027 the wage will be readjusted by cumulative CPI inflation between 1 May and 31 December 2026.
• The employer pension contribution rises from August 2026, see the social security entry.

Steps

1. 1. Obtain necessary registrations and tax ID numbers — Employers must register their company with the Chilean tax authority (Servicio de Impuestos Internos) and obtain a tax ID number (RUT). Employees must also register for a tax ID number to receive a salary and pay taxes. This process can take around 2-4 weeks, depending on the complexity of the application and the speed of the authorities.
2. 2. Set up payroll systems and accounts — Employers must set up a payroll system and open a bank account in Chile to receive and process payments. This may involve hiring a payroll services provider or using in-house accounting software.
3. 3. Calculate and pay payroll taxes and contributions — Employers must withhold and pay payroll taxes and social security contributions on behalf of their employees. The tax rates and contribution levels can be complex and may require the assistance of a payroll services provider or accountant.