How To Hire And Pay Employees In Argentina
Emerald Technology's guide to hiring employees in Argentina
Argentine Peso is the official currency of Argentina. Its currency symbol is $, ARS.
Estimated at 28% of employee's salary
Spanish is the official language of Argentina. There are also one million speakers of indigenous languages such as Quecha and Guarani.
GROW YOUR TEAM IN ARGENTINA
TABLE OF CONTENTS
NO ENTITY, NO PROBLEM
To start growing your team in Argentina, you must establish a local entity- including an account with a local bank, a local office and an address registered as a subsidiary. This allows you to manage payroll, tax, benefits and compliance for your employees, but can take several months.
Emerald can hire and payroll your workers quickly and compliantly with their 'ready to go' entity. Make growing your team simple with Emerald as a global partner.
Pros and cons of hiring in Argentina
Argentina boasts the second-largest economy in South America. It is a developing country with great access to natural resources, a strong service sector and a fast-growing tech industry.
When compared with other Latin American countries, English proficiency is more common; however, the majority of most of business-related documentation and processes are still conducted in Spanish.
Argentina is widely recognised as a strong choice for international expansion into the South American market. That said, it is worth noting that the Argentinian economy is unstable and currently in a period of recovery, which has led to one of the highest inflation rates in South America.
Projected employment costs in Argentina are 20-30% of each employee's salary.
Why Argentina is good for remote workers
Argentina has offered a Digital Nomad Visa since May 2022 and is one of the safest South American countries. These factors, combined with good internet speeds throughout the country and a favourable time zone for collaboration with European colleagues, make Argentina an attractive option for remote workers.
The trend towards remote work is increasing, with most companies offering a hybrid working model (office and home).
Income tax in Argentina is divided into nine different brands, ranging from 5% all the way up to 35%.
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Employer Costs in Argentina
An employers contributions stand at approximately 37%. However, this may vary. Below is a list of typical contribution components.
- Pension
- Social Security
- Family Allowance
- National Employment Fund
- Medical Insurance
- Accident Insurance
- Life Insurance
- Work From Home Allowance
Benefits
Mandatory Benefits:
- Pension
- Unemployment
- Family Allowance
- Life Insurance
- Work Accident Insurance
- Public Health Insurance
- Paid Annual Leave
Additional Benefits:
- Flexible Working Hours
- Retirement Insurance
- Extended Vacation Annual Leave
Employment
Contracts
Written contracts of employment are not required for permanent, full-time employees. However, they are recommended. Employees on fixed term contracts, part time, or casual employment will require a written contract. It is advised to include the following:
- Name
- Start Date
- Length of Employment
- Job Description
- Termination Conditions
- Payment Terms
Emerald Technology can provide a compliant contract in Argentina in 24 hours.
Probation Period
Generally, probation periods in Argentina are 3 months. However, collective agreements may extend the probationary period to 6 months. This is very common within smaller businesses of 40 employees or less. A probation period may even be extended up to 12 months for skilled employees.
Restrictive Covenants
During employment, employees are obliged to respect their employer´s intellectual property, confidentiality and non-compete provisions. There are no specific laws around restrictive covenants after the termination of employment. However, the constitution provides freedom of work, which means that the employee may challenge any non-compete or non-solicitation provisions after termination of employment. The employee is obliged by labour laws not to compete during any current employment relationship. Restrictive Covenants, such as non-compete or non-solicitation of customers, after termination of employment will need to comply with specific requirements.
Insurance
Health Insurance
Healthcare is available for all employees in Argentina, providing free medical treatment and hospital care. Contributions to this are made by both the employer and the employee, based on the employee's salary. It is common for employers to also offer a healthcare plan that exceeds the social security coverage offered. Employers must provide insurance in relation to an employee’s disability, illness, or death at work, as well as life insurance.
Social Security Contributions
All employers and most employees are required to contribute to the social security (Administracion Nacional de la Seguridad Social) and pension funds. Argentina has social security agreements with several countries, including Brazil, Chile, greece, Italy, Paraguay, Portugal, Spain and Uruguay.
Employees coming from these countries are exempt from social security payments to the Argentine retirement and pensions fund if in their home country they will be covered by proportional systems.
Leave Policy
Maternity Leave
Expectant mothers are entitled to 90 days maternity leave (Licencia por maternidad). This is usually taken 45 days before the birth and 45 days after. However, many employees choose to take 30 days before the birth and extend their leave following the birth. The leave before the birth cannot be reduced to less than 30 days. Additional unpaid leave (período de excedencia) between 3 - 6 months can be requested. Maternity pay is not paid by the employer but by social security. This is the equivalent to normal remuneration. Fathers are entitled to 2 days paternity leave (Licencia por paternidad) which must be taken immediately after the birth.
Paternity Leave
Employees are entitled to two days paternity leave that must be used after the birth.
Sickness Leave
Employees with less than five year's continuous service are entitled to up to three months' paid sick leave. This can be extended to up to six months with over five years' continuous service. If the employee has a family, these periods are doubled. Sick pay is covered by the employer.
The employee will be required to undergo examination by a doctor to verify the illness. Once the period of sickness has expired, if the employee is still unable to return to work, then they are entitled to a further 12 months' unpaid leave.
The employer must keep the employee's position open during this period. If the employee is then found to have a permanent disability that prevents them from being able to perform the same work, the employer will either need to make reasonable adjustments or work in line with the disability. If the employer can prove they are unable to provide this, then the employer can terminate employment by paying 50% severance compensation in line with dismissal without justified cause. The employer would need to pay 100% in the case of a total permanent disability.
Onboarding
Onboarding
As the legal employer, Emerald Technology requires the following employee documents to ensure complete compliance:
- ID/Passport
- Bank Account Details and Confirmation
Emerald Technology can onboard employees in Argentina within a week.
Resignation and Dismissal in Argentina
Notice Periods
Within the probation period, either party may terminate employment by providing 15 day's notice in writing. Once the probation period has ended, the notice period increases to one month when length of service is between three months and fiver years, and two months' notice when length of service exceeds five years.
Compensation
In addition to notice, employees will also be entitled to compensation payments based on salary once they have completed one year's service, if employment is terminated without a justified cause (30 day's salary for each year, up to a maximum of 330 days). The employee will also be entitled to payment of notice days if prior notification was not given, as well as payment of any annual leave days not taken.
If employment was based on a specific contract or task and this ends prematurely, the employee will be entitled to 2.5 days of salary for each month worked.
If an employee is made redundant there will still be a compensation payment. However, this will be at a reduced rate, typically 50% of the monthly salary. An employee will not be entitled to compensation payments based around dismissal regarding the conduct of the employee.
An employee may terminate the employment relationship by constructive dismissal if the employer fails to discharge his or her obligations under the contract. In this case the worker is entitled to payment in lieu of notice, and to an indemnity equal to that which is payable by the employer in the case of dismissal without cause.
Severance
Employers can also claim severance for unfair dismissal, plus an additional amount that increases the severance by 50%. However, in some cases where dismissals have been found to be discriminatory, the courts have ordered the reinstatement of the employee. There is currently no separate claim for wrongful dismissal.
Statutory Time Off
Annual Leave
Annual leave entitlement in Argentina largely depends on length of service with an employer. Generally, the following applies:
- Less than 5 years' employment: 14 calendar days
- 5-10 year's employment: 21 calendar days
- 10-20 years' employment: 28 calendar days
- 20+ years' employment: 35 calendar days
There are 15 paid public holidays in Argentina and the government adds 'bridge holidays' which can increase this number. Employees are also entitled to 10 day's leave for marriage.
Public Holidays:
- New Year's Day
- Carnival
- Malvinas War Veterans Day
- Good Friday
- Labour Day
- Revolution Day
- General Martin Manuel de Guemes Memorial Day
- General Belgrano Memorial Day
- Independence Day
- Day of the Immaculate Conception
- Christmas Day
- San Martin Memorial Day
- Columbus Day
- National Sovereignty Day
READY TO HIRE YOUR EMPLOYEES IN ARGENTINA?
Work, Pay & Taxes
Minimum Wage
The national minimum wage in Argentina is currently 38,940 Argentinian pesos ARS. This is set to increase again in June 2022.
Working Time and Overtime
Working hours in Argentina should not exceed 48 hours per week or eight hours per day. A workday maybe extended due to exceptional circumstances but should not exceed an additional three hours per day (eight hours per week), 30 hours per month, or 200 hours per year. The overtime rate is an additional 50% of salary (100%) for work on Saturdays after 1pm, Sunday and public holidays).
Employees should have a minimum of one rest day for every six days worked. Employees are entitles to a rest period of at least 12 hours between two working days.
Salary Payments
Salaries in Argentina are most commonly paid on a monthly basis. However, employees on an hourly salary will need to be paid either weekly or bi-weekly. Argentinian local law states employees are entitled to receive an additional month’s salary, a 13th-month bonus salary known as Aguinaldo. This 13th month salary is payable in two instalments, typically these are paid in June and December.
Bonus
Employers in Argentina are required to pay one additional monthly salary, divided into two payments, one in June and one in December.
Income Tax
The Argentinian tax year runs from January to December. It is the employer's responsibility to ensure taxes are paid from salaries before payments are made to employees. The general personal income tax rates are listed below as guidance.
| Salary | Tax Payable |
| Up to 64,532.64 | 5% |
| 64,532.64 - 129,064.29 | 9% |
| 129,064.29 - 193,597.93 | 12% |
| 193,597.93 - 258,130.58 | 15% |
| 258,130.58 - 387,195.86 | 19% |
| 387,195.86 - 515,261.14 | 23% |
| 515,261.14 - 774,391.71 | 27% |
| 774,391.71 - 1,032,522.30 | 31% |
| 1,032,522.30+ | 35% |
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Worker Misclassification in Argentina
Similar to other countries, Argentina has strict rules on classifying individual contractors and full-time employees differently. Misclassifying your workers can put your business at risk of fines.