Hire and pay employees in
Paraguay, hassle-free

The individual income tax ranges from 8% to 10%. Income tax is calculated according to progressive rates, and based on the income of the calendar year. Income tax calculation will vary on the minimum wage set for the calendar year.

• Up to PYG 50.000.000 - 8%
• From PYG 50.000.000 to PYG 150.000.000 - 9%
• Over PYG 150.000.000 - 10%

The employer cost is generally estimated at 16.5% of the employee salary.

• Social Security (Instituto de Previsión Social) - 16.5%
• Family Bonus (Bonificación Familiar):
  • PYG 139,915 for salaries lower than PYG 5.596.618
  • Not applicable for salaries higher than PYG 5.596.618.

Annual costs:
13th Month Salary (Christmas Bonus) - 1-month salary
One time fees:
Medical Exam - PYG 1,090,440.3 (~USD 150)

These costs are provided as estimates and are intended solely for general informational purposes. To fully comprehend all associated costs and fees related to the terms of any employment agreement for this country, please contact our Sales team for a quote.

Standard working hours are 8 hours per day, and 40 hours per week. Maximum working hours per day remain 8 hours, with an extended work week until Saturday, summing 48 hours per week.

Overtime payment is mandatory. Hours outside of standard work hours agreed in the employment agreement are considered overtime.

When employee is asked to work overtime, the work hours shall not exceed of 3 hours per day or 57 hours a week.

All overtime above 48 hours are paid as:

• 150% of the hourly rate, during the day time
• 200% of the hourly rate, during the night time or on Public holiday

Employees are eligible for paid sick leave after 36 days of employment. Sick leave is paid based on the employee’s salary for the four months preceding the sickness up to 26 weeks (as temporary work leave). It is compensated by Social Security (IPS) through the employer.

The employee will receive 50% of their regular income.

Employees are entitled for a sick leave upon provisioning the medical certificate.

Terminations in Paraguay can be complex. The process of termination differs depending on the employment employment agreement taking into account the type of contract and the reason for termination.

It is required that any notices of termination be provided in written form by the employee.

Employers are prohibited from unjustly terminating employees who have been employed for over ten years, and such terminations can only occur if there is a valid and justifiable cause.

Compliant terminations include:

• The dismissal of the worker for just cause or without just cause (with severance payment)
• Resignation of the worker or withdrawal for justified reasons
• Mutual agreement
• By expiration of the contract

The minimum mandatory notice period is one day, and will be increased according to the length of the employment;

• During the Probation Period, no notice period
• After the probation period and up to 1 year of seniority, 30 days
• More than 1 year and less than 5 years of service, 45 days 
• Between 5 and 10 years of service, 60 days
• More than 10 years of service, 90 days

In Paraguay, employees who are terminated based on redundancy or unsuitability for the job are entitled to severance pay.

If an employee is dismissed without cause, whether or not prior notice was given, the employer is required to provide compensation. This compensation should amount to fifteen daily wages for each year of service or a proportional fraction for a period of six months.

After 10 years of employment, an employee can only be terminated with justified cause.

In Paraguay, both, full-time and part-time employees are entitled to a minimum of 12 working days of paid time off (PTO).

• Up to 5 years of service, 12 working days
• Between 5 and 10 years of service, 18 working days
• Over 10 years of service, 30 working days 

Paraguay celebrates 9 national holidays. National public holidays include:

• New Year
• Heroes Day
• Labor Day
• National Independence Day
• Peace of Chaco
• Foundation of Asunción
• Battle of Boquerón
• Virgin of Ca'acupé
• Christmas

Contracts must be in Spanish and can be bilingual. They must be in writing and signed by both parties. Digital signature can be used for signatures

A contract must include:

• Termination
• Notice period
• Working hours
• Bonuses
• Holiday leave
• Sick leave
• Duties
• Confidentiality 
  
  

Contract backdating is not allowed.