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Payroll & Tax in Argentina

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Your Payroll Options in Argentina

Remote Payroll

A remote payroll system is where a foreign company, i.e. a non-resident company, payrolls a resident employee in Argentina. Under Argentine Law, companies registered in other countries are allowed to obtain a license to do business and have employees in the country.

Local Payroll Administration

In some cases, a company will register their business in Argentina under the various business entity types available, but prefer to have another company administering its payroll.  This can be accomplished through a payroll provider.

It is important to note that the company, as the Employer of Record, is still fully responsible for compliance with employment, immigration, tax and payroll regulations. But the payroll calculations, payments and filings can all be outsourced to the payroll provider.

Internal Payroll

Larger companies with a commitment to Argentina may wish to run their own local payroll for all employees, foreign and local. In order to accomplish this, they will have to complete incorporation, register the business and then hire the necessary staff.  There will be a need for in country human resources personnel who have the background needed to manage an Argentine payroll, and can fulfil all tax, withholding, and payroll requirements.

This approach carries significant cost and requires some knowledge of local employment and payroll regulations. The company will need a local accounting firm and potentially legal counsel to ensure full compliance with Argentine employment laws.

Fully Outsourced Payroll & Employment

Companies can outsource the employment and payroll of their staff in Argentina to a GEO, like Shield GEO. This is possible for both foreign workers and Argentine nationals. This is the easiest, fastest and safest way to payroll staff in Argentina.

Shield GEO manages all aspects of payroll for workers in Argentina, including taxes, withholding, social security payments and other statutory requirements. Shield GEO becomes the Employer of Record and employs the staff on behalf of the client.

Staff are paid monthly with tax and social security deducted at source and paid to local authorities. Shield GEO will invoice the client monthly in advance of the payroll date. The invoice consists of the Total Cost of Employment (Base salary + Employers Statutory Contributions + Additional statutory contributions) and a Management Fee. Shield GEO provides the employees with payslips.

Read more about outsourced payroll and employment through Shield GEO.

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Setting up payroll in Argentina

Information Explanation
Currency ?

Argentine Peso (ARS)

Employee Information Required ?

The following information is required for an employee to be registered in the Special Payroll Book, which must be registered immediately by the company upon hiring, and is subject to control and supervision by the Argentine Ministry of Labor:

  • Full name
  • Date of birth
  • National I.D number
  • Gross earnings
  • Position and department
  • Hiring date
  • Deductions
  • Marital Status
  • Tax Identification Number (CUIL) – for foreign employees
Tax Registration Requirements ?

Argentine companies should register their employees with the tax authority and retain taxes from employee salaries. Under Section 52 of the Employment Contract Law, the employer must keep a Special Labor Ledger that is registered and sealed by the Department of Labor to register employer and employee’s particulars and other aspects pertaining to taxation.

Tax and social security registration are both done at the National Tax Office (Administración Federal de Ingresos Públicos, AFIP). Employees of the company should obtain their Tax Identification Number (CUIT) to be registered with the taxation authority.

Social Security Registration ?

The hiring or termination of an employment contract should be reported to the AFIP for the employee to be registered with the Social Security Registry. Notice of the arrangement must be given before the starting date. A receipt in original will be provided to the employer, while a duplicate is given to the employee once the registration has been processed.

Documentation Required for New Employees ?

For newly hired employees, indefinite term contracts are not required to be in writing. Offer letters are typically not provided when hiring under this arrangement, although a written formality may be appropriate if there are certain issues to be clarified.

If an employment contract is to be drawn, the following details may be included:

  • Specification of trial period
  • Overtime conditions
  • Annual paid vacations
  • Maternity leave
  • Termination rules
  • Severance pay
  • Notice of dismissal
  • Company benefits (not mandatory)
Corporate Income Tax Rate

The corporate income tax rate is 35%.

Payroll Tax

There is no payroll tax in Argentina.

Sales Tax

The general Value Added Tax (VAT) is 21%, which increases to 27% to certain services such as communication and utilities provisions and decreases to 10.5% for capital goods and other specified items. The export of goods and services have no VAT.

There is also a provincial level sales tax in some municipalities levied at 4% of gross revenue. Higher rates may be levied for certain services or industries and in certain provinces.

Withholding Tax

Dividends paid to nonresidents have a withholding tax of 10%. An additional withholding tax applies if the dividends received exceed the payer company’s accumulated taxable income, standing at 35%.

Interest paid to nonresidents have a withholding tax of 35%, but may be reduced to 15.05% if the borrower is a financial institution, bank or in special circumstances.

Royalty payments made to nonresidents are subject to a withholding tax of 35% on 35% of the gross payment, at an effective rate of 12.25%. Patent royalties and technical assistance fees have varying withholding taxes depending on payment type, ranging from an effective rate of 21% to 31.5%.

Other Tax

Real estate tax – The provincial governments levy a real estate property tax on both urban and rural land, with differing rates depending on the jurisdiction.

Stamp duty – Documents such as contracts, notarial deeds, receipted invoices, promissory notes and other instruments are subject to stamp tax. The stamp duty is generally 1%, although may range from 2.5% to 4% depending on nature of tax and province.

Customs and excise duties – Export duties depend on the nature of the goods exported, while excise taxes are levied on certain products only, e.g. fuel, luxury items and cigarettes.

Financial transaction tax – All financial transactions are taxed at 0.6% per transaction on all debits and credits in current accounts.

Net wealth tax – An asset tax of 0.5% applies to equity interests held by a resident or nonresident individual in a company incorporated in Argentina.

Tax Figures

Information Explanation
Corporate Income Tax ?

The corporate income tax rate is 35%.

Income Tax Rate ?
Grossed income Tax Rate (%)
0 - 10,000 9
10,000 - 20,000 14
20,000 - 30,000 19
30,000 - 60,000 23
60,000 - 90,000 27
90,000 - 120,000 31
120,000+ 35

Professionals who work in Argentina for less than six months are subject to a single income tax withholding of 24.5%.

Payroll Tax ?

There is no payroll tax in Argentina.

Sales Tax ?

The general Value Added Tax (VAT) is 21%, which increases to 27% to certain services such as communication and utilities provisions and decreases to 10.5% for capital goods and other specified items. The export of goods and services have no VAT.

There is also a provincial level sales tax in some municipalities levied at 4% of gross revenue. Higher rates may be levied for certain services or industries and in certain provinces.

Withholding Tax ?

Dividends paid to nonresidents have a withholding tax of 10%. An additional withholding tax applies if the dividends received exceed the payer company’s accumulated taxable income, standing at 35%.

Interest paid to nonresidents have a withholding tax of 35%, but may be reduced to 15.05% if the borrower is a financial institution, bank or in special circumstances.

Royalty payments made to nonresidents are subject to a withholding tax of 35% on 35% of the gross payment, at an effective rate of 12.25%. Patent royalties and technical assistance fees have varying withholding taxes depending on payment type, ranging from an effective rate of 21% to 31.5%.

Income Tax (Personal Allowance) ?

Up to ARS 15,552 are able to be deducted for basic personal allowance.

Employee Social Security (EE SS)

Employee social security contributions are currently 17% of gross wages, up to a monthly cap of ARS 13,879.25. 11% is towards the pension fund, 3% towards the Pensioner’s Healthcare Fund and 3% to Medical Care.

Employer Social Security (ER SS)

Employer social security contributions are current 27%, spread across contributions to the Pension Fund, Pensioner’s Healthcare Fund, Family Allowance Fund, Unemployment Fund and Medical Care.

Payments

Information Explanation
Payment Mode ?

Traditionally, Argentina has widespread use of cash to make payments. Since 1997, companies are required to pay their employees via bank automated payroll deposits instead of cash. Alternatively, deferred checks are quite a popular method, while direct bank deposits are also used to some extent.

Frequency of Salary Payment ?

The most common frequency of salary payment is monthly, although daily wages can be settled weekly or fortnightly. The salary must be paid within four working days at the end of the month.

There is a mandatory bonus scheme in Argentina known as the 13th Salary, where half the employee’s monthly salary is paid mid-year and the other half at the end of the year.

Invoice / Payslips required ?

Under Article 59 of the Argentine Labor Law, any payment made regarding salary must be accompanied by a receipt signed by the worker. A duplicate is given to the employee, and must include full name, address and CUIT, types of remuneration received, deductions, proof of receipt, place and date.

Minimum Wage ?

As of January 2016, the minimum wage stands at 6060 ARS per month, paid 13 times a year.

Employee Entitlements

Information Explanation
Working on Sundays ?

Working on Sundays is permitted, although employees are not expected to do so. A 100% premium of the employee’s wage is required to be paid. Overtime work, including weekend and holiday work, should not exceed 30 hours per month or 200 hours per year.

Disclosure and Confidentiality of Personal Information ?

The disclosure of personal data of an employee is only allowed if it is in the interest of the owner of the information and the employee has consented to the disclosure. This consent may be revoked at any time.

There are conditions where consent to disclose personal information is not required:

  • Disclosure is provided for by law
  • General data processing conditions applies (collected by State, contractual relationship, etc.)
  • The disclosure is between governmental agencies
  • Disclosure is for public health reasons
  • The information is anonymized
Employee Protection and Anti-discrimination Rights ?

Employees are generally protected from discriminatory practices under local laws. Under the Anti-Discrimination Law No.23, 592, any employees dismissed on the grounds of discrimination due to race, religion, nationality, ideology, political affiliation, sex, financial, social or physical condition may demand to be reinstated, demand for the removal of the source of discrimination or be compensated via mandatory severance payments and damages.

Time Off Work ?

The employee may request paid special leave of absence in certain cases, and may be extended at the discretion of the employer. Collective bargaining agreements may grant additional days of leave. The conditions are:

  • Birth of a child (2 days)
  • Marriage (10 days)
  • Death of spouse, children or parents (3 days)
  • Death of brother or sister (1 day)
  • Secondary or university examinations (2 days per exam)

Female employees are entitled to 90 days’ paid maternity leave; 45 days before and after childbirth. The employee may request additional unpaid leave of three to six months.

Medical Leave ?

In the case of illness or accident unrelated to work, employees may take up to three months’ paid leave if he/she has been with the employer for less than five years, and up to six months’ paid leave for those working for longer than five years.

If the employee receives family allowances, the paid sick leave entitlement doubles. Once the paid sick leave period expires, the employee must keep the position open for at least 12 months. If the employee is still unfit for work, severance pay should be granted to the employee.

Any accident or illnesses caused by work-related problems entitles the employee to 12 months compulsory rehabilitation and sick pay under the compulsory employment risk ensurance (Aseguradora de Riesgos del Trabajo).

Employment Termination

Information Explanation
Severance / Redundancy Pay ?

Severance pay is calculated based on the employee’s highest regular, monthly salary accrued over the last year. The cap for calculation of seniority indemnity must not be less than 67% of the computable best ordinary usual monthly remuneration.

For fixed-term employees with premature termination of their contract, the severance payment consists of the remaining salary that would have been paid until the completion of the contract. Fixed-term employees who have been working for longer than a year are also entitled to 50% of the severance pay that a permanent employee would have received.

Termination of Employment ?

The duration of the notice period depends on certain conditions:

  • Three month probationary period – 15 days’ notice
  • Less than five years of service – one month
  • More than five years of service – two months

Payment in lieu of notice applies in these cases.

Argentina

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