Hire Employees in Bolivia

Two routes exist. Registering a Bolivian company through FUNDEMPRESA gives you direct employment and permit sponsorship, but commits you to corporate tax, monthly filings and enrolment with both the Caja Nacional de Salud and the Gestora Pública. Budget two to four months.

An Employer of Record removes that lead time. The EOR is the legal employer in Bolivia, runs payroll, contributions, RC-IVA withholding and the the statutory thirteenth-month salary (aguinaldo), and carries the employment liability, while day-to-day direction stays with you.

Engaging someone as a contractor is a third option, but only where the work is genuinely independent, see the risk check further down this page.

Bolivia is a market where the headline contribution rate materially understates cost. The 16.71% is only the beginning: add the aguinaldo, and severance that accrues from the first year and is payable even when the employee chooses to leave.

The annual minimum wage decree is a live budgeting risk. It is announced around 1 May but takes effect retroactively to 1 January, so employers owe back-pay for the months already run, and the retroactive amount also feeds into the aguinaldo and severance base. The 2026 increase was 20%, taking the minimum to Bs 3,300.

Break-even rule of thumb: EOR fees begin to exceed the running cost of a small Bolivian company somewhere between 15 and 20 employees. Model both before committing, see EOR vs Entity for the full comparison, and plan any later migration so employees keep seniority, since severance accrues on continuous service.

Employer contributions total 16.71% of total earnings under Ley 065 de Pensiones and the social security code: 10% to the Caja Nacional de Salud for short-term health, maternity and occupational risk cover; 3% Aporte Patronal Solidario; 2% Pro-Vivienda; and 1.71% Riesgo Profesional. Mining and metallurgy companies add a further 2% to the Fondo Solidario Minero, taking them to 18.71%.

The 10% health contribution is entirely the employer’s. It does not appear as a deduction on the payslip and must never be taken from salary. Employees separately pay 12.71% to the pension system, comprising 10% to their individual account, 1.71% for common risk, 0.5% solidarity and 0.5% administration.

Pensions moved to a state administrator in May 2023. The Gestora Pública de la Seguridad Social de Largo Plazo replaced the private AFPs, with the APS as regulator. Guidance written before that change still refers to AFPs, and some components of the employee deduction have been treated differently since the transition, confirm current percentages with the Gestora before running payroll.

High earners pay an additional Aporte Nacional Solidario on the excess above Bs 13,000, Bs 25,000 and Bs 35,000 of total earnings, at 1%, 5% and 10% on each band respectively. It is an employee deduction, not an employer cost, but it changes net pay significantly at senior levels.

Gross monthly salaries for full-time roles in La Paz and Santa Cruz. Add 16.71% for contributions, then provision separately for the aguinaldo and severance.

Benchmarks below are gross monthly salaries in bolivianos for full-time roles in La Paz and Santa Cruz. Add 16.71% for employer contributions, then provision separately for the aguinaldo and for severance, which accrues from the first year and is payable even on resignation.

Payroll is monthly and runs to two institutions: the Caja Nacional de Salud for health cover and the Gestora Pública for pensions. Affiliation is compulsory from the first day of work, and the employer must register a new employee within five working days of the start of the relationship, including during any probationary period.

Income tax is the RC-IVA at 13%, applied to total earnings less the pension contributions and less a non-taxable minimum of two national minimum wages. What makes it unusual is the offset: employees can present personal purchase invoices carrying a NIT to credit against the tax. In practice an employee who submits enough invoices each quarter can reduce the RC-IVA to nil.

The aguinaldo is excluded from RC-IVA.

A temporary incentive applies to new hires engaged between 17 December 2025 and 31 March 2026: 50% of the employer contributions to the Caja Nacional de Salud, Pro-Vivienda and Riesgo Profesional may be credited against IVA.

Bolivia applies a single RC-IVA rate rather than progressive bands. The base is total earnings less pension contributions and less two national minimum wages, and the tax can be offset with personal purchase invoices.

The Ley General del Trabajo is the governing statute, supplemented by Ley 065 de Pensiones and the annual minimum wage decree.

The standard working week is 48 hours, and overtime is limited to two hours a day. Annual leave scales with service: 15 working days after one to four years, 20 days after five to nine, and 30 days from ten years.

The bono de antigüedad is a seniority allowance payable after two years of continuous service, calculated as a percentage of a base set at three national minimum wages rather than of actual salary, and rising with tenure to 50% at 25 years.

Father’s Day on 19 March and Mother’s Day on 27 May carry a statutory half-day for employees in both the public and private sectors.

Written contracts are the norm and should be registered with the Ministry of Labour. Contracts are presumed indefinite unless the work is genuinely temporary.

Probation is commonly three months. Social security affiliation applies from day one regardless, and the employer must enrol the employee within five working days including during probation.

Fixed-term contracts are restricted and repeated renewal converts the relationship to indefinite. Where the basic salary falls below the national minimum it must be levelled up automatically, including retroactively when the annual decree lands.

The standard week is 48 hours. Overtime may not exceed two hours a day, so no employee should work more than ten consecutive hours, and overtime attracts a premium on the ordinary rate.

Night work and work on rest days and public holidays attract higher premiums.

Employees are entitled to weekly rest, normally Sunday.

Bolivia observes 12 public holidays in 2026, together with two statutory half-days on 19 March and 27 May. Departmental holidays also apply in individual regions, so a national calendar alone will understate time off for staff outside La Paz.

Bolivia observes 12 paid public holidays in 2026, plus two half-days. Father’s Day on 19 March and Mother’s Day on 27 May. Dates that fall at a weekend and any substitution rules are set out below; entitlement is separate from annual leave.

Maternity leave is 90 days, 45 before and 45 after the birth, with a maternity subsidy paid through the Caja Nacional de Salud. Paternity leave is three days.

Job protection is unusually strong for parents. Neither parent may be dismissed from pregnancy until the child reaches one year of age, a protection that applies to the father as well as the mother.

Nursing mothers are entitled to a daily breastfeeding break, and the CNS provides a lactancia subsidy in kind.

Notice depends on length of service and is set by the Ley General del Trabajo. Dismissal must rest on a ground recognised by the statute.

Severance is one month of salary per year of service, and Bolivia applies it on voluntary resignation as well as dismissal. That is believed to be unique in Latin America, and it is the single most commonly under-provisioned cost for foreign employers, who typically model severance as a redundancy risk rather than a certainty.

Desahucio, a separate three-month payment, applies where the employer terminates without justified cause. Accrued aguinaldo, unused leave and the bono de antigüedad are settled alongside.

The finiquito must be paid promptly; late settlement attracts a surcharge, and unpaid amounts accrue maintenance of value against inflation.

Foreign nationals need a work authorisation from the Ministry of Labour and a residence permit through the Dirección General de Migración. Processing typically runs four to eight weeks.

Employment quotas restrict the proportion of foreign nationals an employer may engage, so a plan to staff a new operation largely with expatriates will not clear.

Foreign employees are affiliated to the Caja Nacional de Salud and the Gestora on the same basis as nationals.

Under-provisioning severance is the dominant risk. One month per year accrues from the start and falls due even when the employee resigns. A cost model treating it as a contingency rather than an accrual will be short by roughly 8.3% of payroll every year.

The retroactive minimum wage decree catches employers annually. Announced around 1 May but effective from 1 January, it creates back-pay for months already closed and raises the aguinaldo and severance base at the same time. The 2026 increase was 20%.

Affiliation deadlines are short and enforced. The employee must be enrolled with the Caja Nacional de Salud within five working days of starting, including during probation. Where an employer has not paid, employees are turned away from treatment and the employer carries the cost directly.

Note also that the 10% health contribution must never be deducted from salary, and that an employee concluding contracts locally can create a taxable presence for a foreign entity.

Work backwards from the start date. For a local hire through an EOR, two to three weeks is realistic once identity documents, the written contract and CNS and Gestora enrolment are in hand. For a foreign national, add four to eight weeks for the work authorisation and residence permit.

Affiliate the employee within five working days of the start date. This applies from day one and during probation, and late affiliation exposes the employer to the cost of any treatment the employee needs in the interim.

Provision from month one for the aguinaldo and for severance, and diarise the annual minimum wage decree so the retroactive adjustment and its knock-on effects are budgeted rather than absorbed.