Employers must withhold income tax on employee salaries, to be paid to the Serivicio de Impuestos Internos (SII); the tax is progressive, from 0% to 40%. The company must also withhold certain taxes from their employees’ salaries for contributions to the employees’ retirement fund, or AFP (10% plus commissions), health insurance (7% plus commissions paid to an Isapre, which are private health insurance providers, or Fonasa, the state health insurance provider), employment insurance, and workplace accident insurance (between 0.9% and 3.4%), and employement insurance (3%). Regarding employment insurance, if the labor contract is for a definite term, the employer pays the whole 3%; if the contract is indefinite, the employer pays 2.4% and the employee 0.6%.
The LegalFácil Guide to Labor Law in Chile: Employment Taxes & Contributions
By morgan|2013-10-07T20:51:45-04:00October 23rd, 2013|Employment Taxes, Labor Law in Chile, Serivicio de Impuestos Internos (SII), Taxes, The LegalF|Comments Off on The LegalFácil Guide to Labor Law in Chile: Employment Taxes & Contributions