Definitive Guide to Hiring in Argentina

Hiring in Argentina

For companies that want to hire employees and run payroll in Argentina without first establishing a business entity or subsidiary, Global Expansion provides Employer of Record services (EOR Argentina). Our EOR services streamline and simplify the global hiring process. We handle the core global HR tasks - compliance, contracts, payroll, global benefits, and more - so that you forgo hours of ongoing admin, human error, and risky compliance.

In Argentina, companies would historically establish a subsidiary or branch office to legally hire in that country. With Global Expansion, this step is no longer necessary. We have subsidiaries all over the world and therefore can legally hire on your behalf. The employees are ours only on paper and report directly to managers within your company.

Labor Laws in Argentina

Labor Laws in Argentina stem from the National Constitution and Labor Code as well as other statutes and regulations. The Constitution protects the right of people to work, form unions, and bargain collectively.

The Labor Code sets forth rules and regulations governing hiring, firing, wages, hours—and also working conditions. Occupational safety and health is also addressed in various statutes and regulations. Several other statutes and regulations provide for occupational safety, workers' compensation; pensions; maternity leave—even paid vacation time.

Employment Contracts

Employment contracts can be either for an unlimited period or for a fixed term, but they must be in writing and cannot be for more than 5 years.

Employee Probation Period

• The probationary period is the first 3 months of employment but can be terminated at any time.
• During this period, the employee may be discharged without just cause and no further payments with 15 days' notice.
• For small enterprises with 40 workers or fewer, collective agreements can extend the probation to 6 months. For skilled workers, the probation period can be up to 12 months.

Annual Leave in Argentina

Employees who have worked for an employer for more than 6 months are entitled to 2 weeks of annual leave.

The amount of holiday entitlement increases with the length of continuous employment, up to a maximum of 5 weeks or 35 days.

The minimum and continued period of paid annual vacations employees are entitled to are:

• 14 calendar days when seniority does not exceed 5 years
• 21 calendar days when seniority is between 5 and 10 years
• 28 calendar days when seniority is between 10 and 20 years
• 35 days when seniority exceeds 20 years

Holidays in Argentina

Here’s a full list of public holidays in Argentina:

Maternity Leave Argentina

Female employees are entitled to a special leave of absence for maternity including 45 days before and 45 days after childbirth. During maternity leave, employees are entitled to certain family allowances and other fringe benefits.

Paternity Leave Argentina

Male employees are allowed 2 days of paid paternity leave after the birth of a child.

Sick Leave in Argentina

If the employee has an illness or accident that is not work-related, they are entitled to:

• up to 3 months’ paid leave if they have worked for an employer for less than 5 continuous years
• up to 6 months’ paid leave if they have worked for an employer for more than 5 continuous years.

If the accident, injury or illness is related to work performed for the employer, treatment costs, rehabilitation, and sick pay are covered for up to 12 months by compulsory employment risk insurance.

Working Hours in Argentina

Labor laws in Argentina state that the maximum permitted workweek is 8 hours per day or 48 hours per week.

Overtime in Argentina

Overtime must not exceed 30 hours a month and 200 hours a year, unless authorized by the relevant labor authorities. The overtime rate is 50% for work from Monday through 1 PM on Saturday. For work completed beyond that time and on public holidays, the overtime rate is 100%.

Workers who are required to perform their duties during the rest period or on public holidays must be paid at a rate of 100% on top of their normal salary.

Termination of Employment in Argentina

In Argentina, an employer can terminate the employment contract with just cause or without just cause. The grounds for termination include:

• worker's initiative
• worker's conduct
• mutual agreement
• death
• bankruptcy
• retirement

Employers can terminate employment at any time without justified cause, subject to payment of severance compensation provided by labor laws. Employees on a trial period—during their first three months of employment—are not entitled to severance pay unless they have received prior notice (15 days).

The employer can dismiss an employee with justified cause in the event of failure of the employee to fulfill his obligations which do not consent to continuation of employment relationship.

Fair Dismissal Practices

The Argentine labor laws do not list specific breaches that constitute cause for dismissal. Instead, it is up to the employer to determine whether or not an employee's actions are grounds for dismissal. This can be done on a case-by-case basis, but the employer has the burden of proof.

An employee who feels that he or she has been unjustly dismissed has the right to challenge his or her dismissal in court. In order for a Labor Court to rule in favor of the employee, the court must first decide if there was just cause for dismissal by examining any applicable disciplinary sanctions against the employee and considering his or her seniority and place in the company hierarchy.

The Labor Courts are very restrictive when it comes to deciding whether or not an employer had just cause for dismissing an employee; as such, they usually analyze whether or not there have been previous disciplinary sanctions against the employee provided by labor laws, how long he or she has worked at this company, and what position he or she holds within said company in order to make their decision.

Finally, employment can terminate due to retirement at age 65 when one receives their government pension plan; no severance compensation is payable in this case either (although some companies may offer it as part of their benefits package).

Notice Period in Argentina

For indefinite term employment contracts, employers may dismiss an employee at any time upon giving the employee:

• Prior notice of 15 days if the employment contract is terminated during the trial
• 1 month if the period of service is greater than the trial period but less than 5 years
• 2 months (if the period of service is greater than 5 years).

This notice can be substituted with a salary payment equivalent to the period of prior notice.

Severance in Argentina

If you're an employer in Argentina, you may be wondering what the rules are around severance pay. Here's a quick overview:

• Employers are required to make severance payments to the employee based on the employee’s highest ordinary monthly salary earned during the previous year of employment or full term of service, if shorter than one year.
• With certain limits, employers must pay the employee one month’s salary for each year of employment or period worked in excess of three months for which the employee worked for such employer.
• If an employee is dismissed for gross misconduct, no severance payment or prior notice is required; however, the burden of proof lies with the employer to show that gross misconduct occurred.

Argentina Salary and Wages

Accurately estimate your costs when employing in Argentina in 2023. Includes base salary, dependents, benefits, taxes, social contributions, and payroll costs. Monthly or yearly calculation period.

Argentina Salary Overview

Argentina has a large working force, resulting in cheaper labor expenses than most other nations. The average hourly rate is just 260 Argentine pesos (ARS). There have been two inflation-driven salary increases, in June and then in August 2022.

Argentina Minimum wage

In Argentina, the minimum wage is 45,540 per month, as of August 2022. In addition to their salary, employees typically earn a 9% pay raise every 17 months. Argentina's annual wage increment rate varies according to the employee's experience and industry.

Argentina Salary Comparison

Those with more work experience typically receive higher pay. Employees with 2 to 5 years of experience earn 32% more than freshers or interns, while professionals with 10+ years of experience have a salary increment of 21%.

Workers with a higher education degree get paid more for skills and knowledge. Those with a diploma or certificate earn 17% more than those who only completed high school education. Meanwhile, employees with a Ph.D. make 23% more than those with a Master's degree. Public sector employees make 7% more money on average than their private sector colleagues.

13th / 14th Month Salary in Argentina

The 13th month and 14th month pay is required to be given to all employees, regardless of their position or salary, as long as they have worked for at least 6 months in a calendar year. It’s calculated based on 1/12th of the yearly salary.

Recently, a non-taxable bonus pay has been introduced that functions like the 14th month salary.

• The employer's Social Security Tax is payable on the employee’s total monthly compensation and is not subject to any cap amount.
• The total employer contribution is 26.4% for companies mainly engaged in the provision of services or trade, provided their annual sales exceed the amount established by the regulation that is updated annually (as from April 1, 2022: ARS 1,438,900,000 for services and ARS 5,495,450,000 for trade), and 24% for all other companies.
• Argentine employers are exempt from paying social security contributions for the first ARS 7,003.68 per month per employee.
• The employee social security withholdings, which include pension fund, health care, and social services, are payable on the monthly salary, up to a monthly cap of ARS 548,651.90 (as of June 2022), except for June and December, where the cap is increased by 50% due to the 13th-month salary. This salary cap is index-adjusted in March, June, September, and December of each year.
• The total employee Social Security Tax rate is 17%, which consists of contributions of 11 % to the pension fund, 3% to health care, and 3% to social services.

Deductible Expenses in Argentina

Employment Deductions and Personal Deductions

Standard Deductions

For purposes of computing tax to be withheld from an employee’s salary, employers may deduct certain allowable expenses.

Business Deductions

• Nonresidents residing in Argentina longer than six months in a calendar year may claim the deductible expenses actually incurred and exemptions available to residents.
• For “new professionals” and “new entrepreneurs” (to be defined by the Law Regulating Decree), the special deduction is ARS 214,622.47.
• Employed and self-employed individuals are entitled to standard deductions in amounts established by law.
• The annual amount is ARS 412,075.14 for employees and ARS 171,697.97 for self-employed persons.

Immigration Argentina

Read on to learn about visa requirements Argentina, work visa requirements, work permits and more.

Argentina Investor Visa

The investor visa also known as the Argentina Golden Visa is for foreign nationals who wish to invest in Argentina. Argentina offers citizenship and residence by investment to individuals who make a qualifying investment in the country.

The immigration office considers an investor to be a foreign national that would make a minimum investment of ARS 1,500,000 in a productive, commercial or service-supplying activity in Argentina. or who convincingly proves that he or she has ARS 1,500,000 destined for investment in these types of activities.

Prior experience in the relevant activities is desirable. The investor visa is valid for up to one year and may be extended indefinitely.

Argentinian citizenship by investment, requires a minimum investment of ARS 1,500,000.

Argentina residency visas require a ARS 500,000 investment, and grant temporary residence status which allows visitors to stay for up to two years.

Working Visa

Individuals who visit Argentina for work/employment purposes are eligible for a work visa. In order to obtain this type of visa, you must have been hired by an Argentine company and must be sponsored by them. Your employer will file forms with the Argentine government in order to obtain this visa. Once it has been approved, you will receive your passport back with your visa inside. This process can take anywhere from six months to two years depending on how busy the government offices are.

Value Added Tax (VAT) in Argentina

• The standard rate of Argentina VAT is 21%.
• There is also a special high rate of 27% applied to telecoms, domestic gas supplies, water and industrial energy users.
• A reduced rate of 10.5% is applicable to a range of goods and services such as the provision of meat, fruit and vegetables, agricultural services, passenger transport, residential housing construction, certain medical services, books, newspapers and periodicals.
• There are exemptions in certain circumstances such as residential housing/farm leasing, passenger transport, medical services, education, public entity services and water, bread & milk.

Withholding Tax in Argentina

Employers in Argentina are responsible for withholding income tax from their employees' paychecks for payroll purposes. This tax is then remitted to the government. The amount of tax withheld depends on the employee's income and tax bracket.

Mandatory Benefits in Argentina

It’s important to understand the legal requirements of hiring employees in Argentina (whether it’s remote or in-office) so that your business remains compliant. As part of Global Expansion’s International PEO and Employer of Record (EOR) solution, we guarantee employees are registered with the appropriate government agency, and that they receive mandatory benefits such as workers’ compensation and paid time off (PTO).

Additionally, all tax deductions associated with the employee are processed at the source, meaning our in-country entity will be responsible for paying all taxes to the authorities on behalf of the new hire.

• These are mandatory benefits as postulated by law
• These include probationary period, annual leave, public holidays, sick leave, maternity leave, paternity leave, overtime pay, notice period, severance pay and 13th month pay
• Mandatory benefits also include social security benefits.

Payroll In Argentina

Payroll Accrual in Argentina

Country Accruals Additional Information

Payroll Accruals Additional information

Accrued Benefits in Argentina

Why use Global Expansion to hire in Argentina

Establishing a branch office or subsidiary in Argentina can be time-consuming, expensive and complex. With such a robust labor market in place, one must pay great attention to detail when structuring employment because Argentine labor laws are complex.

The company also has a responsibility to comply with specific employment practices dictated by Argentine law to maintain its good standing as an equal opportunity employer.

Global Expansion makes it easy for you to expand into Argentina. We'll help you hire your candidate of choice, handle HR matters and payroll, and ensure that you comply with local laws without the burden of setting up a foreign branch office or subsidiary. In addition, you'll have complete control and direction over your employees.

We enable you to stay in control of everything. Our Argentine Global Professional Employer Organization (PEO) and Employer of Record (EOR) solution provides you with peace of mind to focus on running your company and the security to enter new markets.

If you would like to discuss how Global Expansion could help your business hire employees in Argentina, don't hesitate to contact us with the form available on our website.