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Tax and Social Security in Argentina: A Guide for Overseas Employers

When you hire an employee overseas you will need to find a way to learn the specifics of the tax and social security system in the host country.  Because every country has different rules we have put together this guide for employers entering Argentina and hiring either local or expat employees.

Income Tax in Argentina

Personal income tax in Argentina ranges from 5 to 35 percent, for both residents and non-residents.  There is a different flat rate of 24.5% applied for expats under certain circumstances and who work less than six months in Argentina.

  • When are you considered a tax resident in Argentina?

Any foreigner who stays in Argentina more than 12 months is a tax resident, and will pay the resident tax rates.

  • When to pay tax in Argentina?

Income tax is withheld from the monthly salary, and for non-residents is only applied to Argentinian income sources.  It should be noted that even extended business travel could subject an employee to non-resident taxation.

Argentina uses the PAYE system for tax withholding and it is the employer responsibility to remit tax payments to the authorities.  It is paid by the employer bi-monthly beginning in July of the tax year in five payments.  A final payment is made when the tax return is filed.

  • Late Submission and Payment of Tax Contributions in Argentina

Late payment of taxes by the employer incurs a penalty of 3% per month plus a fine of 100-200% of the unpaid tax amount.

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Social Security in Argentina

All employees and employers contribute to social security in Argentina, but some expats might have an exemption if they are on short term assignments of less than two years.

  • Employee and Employer Contributions in Argentina

Employer contributions are 27% of compensation and employee contributions are 17% of gross wages, with a maximum cap for employees that is updated every three months.

Case example:

  • We had a client with employees in Argentina that was asking us if they were responsible for withholding income tax and social security on expense reimbursements to their employee.
  • They also wanted to know if the employer’s social security contribution is the same as payroll taxes.

We let them know that the rule in Argentina is that reimbursement for expenses with original receipts is not subject to social security, as long as they are received by the local employer within one week for processing.  Expenses that are within allowable guidelines will not be subject to income tax either, unless they are personal in nature.

We also told them that social security is not the same as a payroll tax in other countries.

Shield GEO Solution

This is an example of how the Shield GEO service works in real time, where we are always available to assist at every stage from initial onboarding and setting up payroll to smooth transitions when the assignment ends.

If you are looking at hiring employees in Argentina, it can be overwhelming to try to manage it on your own, or even know how to get started.  Here are some of the questions you will face:

  • How do you make the right statutory contributions?
  • How is taxation calculated for each employee?
  • How do you file tax returns on time?

These are the types of issues that we take care of for our clients.  We offer you a complete employment solution that covers immigration compliance, setting up payroll and meeting local employment rules, all within one cost-effective service model.  Our local employer of record will make your international employment simple, relying on in country experts and dedicated account managers in our regional offices.

 Need more information about employing in a new country? Learn more about:

Looking to Hire an Employee in Argentina? Get in Touch.

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