Employer Record in Paraguay

Basic information

Capital: Asunción

Time zone: GMT-4

Languages: Spanish & Guaraní

Currency code: PYG

Human Resources at a Glance 

Contract Terms

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.

Guidelines Regarding Probation Period/Trial Period

The minimum probation period is 30 days, and the maximum probation period is 60 days.

Regulations and Rules Regarding Working Hours

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 is paid according to the following rates

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

Minimum Wage Requirements

In Paraguay, the minimum wage since July 1st 2023 is PYG 2.680.373 per month, around USD 368.

Payroll Cost for Employers

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 127,515.35 for salaries lower than PYG 5,360,746.
  • PYG 0 for salaries higher than PYG 5,360,746.

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

Termination

Grounds

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

Notice Period

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

Severance compensation

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.

Payment & leave Compensation & Holidays

SalaryPayment

Monthly

Payslip Payroll

No explicit provision

Annual Leave

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

The length of leave increases with years of service in the company.

• 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

The annual leave should be taken within 6 months of its accrual, and any annual leave not taken will be carried over to the following year.

Sick Leave

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.

Maternity & Parental Leave

Employees are entitled to 18 weeks of paid maternity leave. Leave is divided into a prenatal period of 2 weeks and a postpartum period of 16 weeks. During this period, Social Security (IPS) will be responsible for the payment.

At the employee’s discretion, the 2 weeks of pre natal leave can be taken after birth.

Length of this period can be extended on special circumstances.

In Paraguay, no law covers parental leave. However, employees may be entitled to maternity leave and paternity leave.

Tax and Social Security Information

Personal Income Tax

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%

Social security

Social Security

Public Holidays 2024