How to Hire Employees in Argentina: A Guide for Global Employers

December 2, 2020

Argentina is the second-largest economy in South America, and home to many skilled, professional workers. If in your search for global talent, you have located one or more potential remote employees in Argentina, you will want a full understanding of the employment and labor regulations.

What you need to know about hiring employees in Argentina

Before you hire and onboard your new employee, it is worthwhile to review the specific guidelines that apply to employing both residents and expats. You will be subject to the employment rights, tax structure, and payroll rules of Argentina, which will likely be different from your home country.

Compliance is key and will be a major factor in keeping your employees satisfied with a foreign employer. This guide will outline the primary areas of employment in Argentina as a way to get you started.

Employment in Argentina

Employment Contracts

Employment contracts are not legally required, but are recommended, and don’t have to be in Spanish. Contracts will have to meet Argentina’s labor standards and may be affected by collective bargaining agreements.

Employee Entitlements

Like many Latin countries, entitlements are generous for employees and can add to the overall cost of employment.

Vacation leave: 14 days annually, fully paid
Sick leave: 90 days per year (per illness) fully paid by the employer, and a further unpaid 12 months where the employment cannot be terminated
Maternity leave: 90 days, with a minimum of 30 days prior to birth
Paternity leave: 2 days

Work Permits

Non-MERCOSUR foreign nationals must show a work contract to obtain a residence permit to work in Argentina, good for one year and extendable.

Collective Bargaining Agreements (CBAs)

CBAs are very common in Argentina with union representation in almost every sector. You will need to find out if a CBA applies to your employee, and how the terms may expand their rights and entitlements.

Termination and Severance

30 days notice is required to terminate an employee in Argentina, and it must be for cause if the employer wants to avoid paying severance. The notice can be paid in lieu if preferred.

When severance is owed, it is 1 month’s salary for every year of service (or part of a year greater than three months). CBAs may offer more severance or situations protected from termination, such as while on maternity leave.

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Payroll and Taxes in Argentina

Minimum Wage

Often one of the attractions in hiring employees abroad is the ability to pay a lower level of compensation than in your home country. However, you should be aware that there is a minimum wage in Argentina that must be paid to employees, and certain salary expectations based on position, and average monthly salaries.

Minimum wage: $218 per month

Average monthly salaries:

Accounting and Finance: $580
Customer Service Manager: $747
IT Manager: $871

Payroll and Social Security Contributions

Combined social security contributions in Argentina total over 40% of gross wages, and support pensions, social funds, and health.

Employee contribution: 17% of gross wages
Employer contribution: 24-25.5% of gross wages

Contribution	Employer	Employee	Combined
Pensions and Social Fund	18-19.5%	14%	32-33.5%
Social Health	6%	3%	9%
Total	24-25.5%	17%	41-42.5%

Tax Rates

Personal income tax is a 5-35% progressive rate based on income level.

13th Month Salary

The year’s highest monthly salary paid in two equal, 50% installments in June and December.

How to hire your employees in Argentina

You do have choices on how to hire your employees in Argentina, depending on the number of employees and your company’s degree of commitment to the country.

Set up your own entity in Argentina

If you plan to hire many employees or have other business plans in Argentina, it could be worth it to incorporate and set up your own entity. This involves business registration, tax identification numbers and sometimes capitalization requirements. You will also need a personal representative in Argentina.

If you have an entity, you do maintain control over the entire hiring, payroll, and withholding process, with the assistance of hired local professionals. But, it is the most expensive and time-consuming option, and probably not the best way to just hire one or two remote employees.

Use an employer of record in Argentina

A more cost effective and easier method of employment is hiring through an employer of record (EOR) in Argentina. This is a way to allow a third party with a legal entity in Argentina to handle all of the local payroll, benefits and withholding tasks, while you still manage the work of your employee remotely.

This does relieve HR of the major task of compliance, and ensures that you can onboard your employee quickly with an experienced team of local experts.

Hire them as a contractor instead

Hiring as a contractor does have appeal if you are unsure how much work you can offer, or want to try out a new recruit. But, if you decide to hire the worker as a contractor, you need to know that Argentina uses strict criteria to classify workers as employees or contractors depending on if a labor relationship is established. A worker is an employee if: 1) the employer directs the employee’s work, 2) creates the schedule, and 3) instructs on the duties required.

If there is misclassification as a contractor, sanctions and fines will be levied on the employer, along with double severance payments.

How to stay compliant in Argentina

Compliance is the number one risk when you are hiring in Argentina, and one way to offset that risk is to have a local partner who can take over the complexity of employment administration. Shield GEO offers your company a local employer of record in Argentina, who is already set up and ready to onboard your new employees.

We know how to hire your employee through our employer of record and ensure they receive all local benefits and entitlements, securing their loyalty and avoiding any complaints or issues. Our regional account manager will be a single point of contact to make sure that your employees are meeting all payroll and tax withholding requirements while working in their new positions with your company.

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