Hiring remote workers has become a popular choice for businesses looking to access a diverse talent pool and achieve cost savings. Argentina, with its vibrant culture and skilled workforce, has emerged as an attractive destination for hiring remote workers. However, navigating the local labor laws, tax regulations, and compliance requirements can be complex. In this comprehensive guide, we will provide you with all the essential information you need to know about hiring and paying remote workers in Argentina. Whether you are a small startup or a multinational corporation, this guide will help you navigate the process smoothly.
Key Considerations for Hiring Remote Workers in Argentina
Argentina offers a unique combination of creativity, adaptability, and resilience in its talent pool. Argentina is among the top choices for nearshoring when it comes to IT services, particularly software development. Software development is in fact the main source of foreign investment in Argentina, with 33% of the local market. Argentina is the only country in Latin America where unicorn software development companies like Despegar.com, MercadoLibre, Naspers’ OLX, and 500 more.
The country’s culture values innovation and ingenuity, resulting in a workforce that brings fresh perspectives and a dedication to quality work. Hiring remote workers from Argentina allows businesses to tap into a talent pool that brings cultural diversity and enriches the capabilities of distributed teams. Additionally, the time zone overlap with North and South American teams facilitates easy and real-time collaboration, making Argentina an ideal choice for businesses looking to expand their remote workforce.
Aerial view of downtown Buenos Aires, Argentina. | Photo by Fermin Rodriguez Penelas on Unsplash
How to Successfully Hire Remote Workers in Argentina
When hiring remote workers in Argentina, there are several key considerations to keep in mind. Let’s explore these considerations in detail:
Cultural Considerations
When hiring remote workers in Argentina, it is essential to consider the cultural differences and adapt your management style accordingly. Argentina places a strong emphasis on interpersonal connections and social interactions.
Payment Methods
When it comes to paying remote workers in Argentina, you can pay them in Argentine pesos or any other currency. However, it is crucial to consider the currency exchange rates, as they can fluctuate depending on economic conditions. It is advisable to consult with a financial expert to determine the best payment method for your remote workers. Some popular payment methods to pay contractors or remote workers include money transfer companies such as PayPal, WhatsApp Pay, Mercado Pago, XE, OLX, and Wise.
Local Labor Laws
Before looking at hiring options, it is crucial to have a good understanding of Argentina’s labor laws and compliance requirements. The country has specific regulations that govern employment relationships, including minimum wage, working hours, and employee benefits. It is essential to comply with these laws to avoid penalties and legal issues. Additionally, correctly classifying your remote workers is crucial to ensure compliance with labor laws and avoid misclassification risks.
Argentina has specific labor laws that govern various aspects of the employment relationship, such as working hours, rest periods, and employee rights. It is crucial to familiarize yourself with these laws to ensure compliance and maintain a positive working environment for your remote workers.
Argentinean labor laws apply to all employees, regardless of their nationality, as long as the individual is employed is within the country.
Argentinian labor laws highlight, among others:
- Compliance to maximum work hours, work payments, annual paid vacation and sick leaves, and overtime pay.
- Provision of appropriate health and medical care services and compulsory life insurance for all employees.
- Provision of compulsory retirement or a pension plan, a disability retirement annuity as well as pension coverage
- Compliance to severance payments and minimum notice periods to ensure a smooth and legal transition
Regarding latest developments, last August 14, 2020, Argentina adopted a Law, (Legal Regime of the Teleworking Contract, Law No. 27555), concerning the minimum legal requirements for telework and remote workers. This was followed by Regulatory Decree No. 27/2021 (19 January 2021).
Minimum Wage and Overtime Pay
Argentina has a minimum wage set. It is essential to know the current minimum wage to ensure that your remote workers are being paid fairly. The current minimum wage in Argentina is ARS118,000.00 per month in 2023. It became valid on September 1, 2023.
Employees are entitled to a minimum weekly rest period of 35 hours, 12-hour break between work days. Additionally, if your remote workers work overtime, they are entitled to overtime pay, which is typically 50% of their usual salary.
Payroll Deductions
Employers in Argentina are required to make certain payroll deductions, including insurance schemes, pension schemes, and various taxes. These deductions vary depending on the specific circumstances and should be carefully calculated to ensure compliance with the law.
Tax Rates and Taxable Income
Argentina has a progressive income tax system, with tax rates ranging from 5% to 35%. It is important to be aware of the tax brackets and understand which parts of the salary are taxable. Additionally, certain components of the salary, such as per diem, may also be subject to taxation. Familiarize yourself with the tax regulations to ensure compliance and avoid any surprises.
Personal income tax (PIT) rates
The following PIT rates are applicable as of 1 January 2023 :
| Taxable income (ARS) | Tax on column 1 (ARS) | Tax on excess (%) | |
| Over (column 1) | Not over | ||
| 0 | 173.834,61 | – | 5 |
| 173.834,61 | 347.669,23 | 8.691,73 | 9 |
| 347.669,23 | 521.503,84 | 24.336,85 | 12 |
| 521.503,84 | 695.338,47 | 45.197,00 | 15 |
| 695.338,47 | 1.043.007,68 | 71.272,19 | 19 |
| 1.043.007,68 | 1.390.676,90 | 137.329,34 | 23 |
| 1.390.676,90 | 2.086.015,35 | 217.293,26 | 27 |
| 2.086.015,35 | 2.781.353,85 | 405.034,64 | 31 |
| 2.781.353,85 | and on | 620.589,59 | 35 |
Employment Options
There are different employment options available when hiring remote workers in Argentina. You can choose to open a legal entity in Argentina, work with a global employment partner, or hire workers as contractors. Each option has its pros and cons, and it is important to evaluate them based on your specific needs and circumstances.
There are several different types of employment contracts in Argentina that you will need to familiarize yourself with in order to determine which type of worker best suits your company’s needs. Employment relationship is governed through written contracts, implied terms, or collective agreements signed by the trade union.
Full-time employees
Full-time employees are hired on a permanent basis. For a long-term, full-time employment engagement, a written employment contract is optional but advised.
Part-time employees
Part-time employees put in fewer hours per week than full-time employees, or less than 48. These agreements are regarded as long-term.
Workers on short-term contracts
Workers are employed under fixed-term contracts for a predetermined amount of time, not to exceed five years. Fixed-term employment must be justified by the employer as being preferable to full- or part-time employment.
Temporary employees
These workers often fill in for absent employees briefly (such as when a worker is on maternity leave and the role needs to be filled for a brief period of time), and their contracts are limited to six months.
Employers have the option of directly hiring temporary employees or via an employment agency. Employers must defend their use of fixed-term agreements just as they must defend their use of temporary and agency staff.
Seasonal employees
Seasonal workers, like agricultural laborers, are those who work during specific times of the year.
Contractor Management
If you choose to hire remote workers as contractors, it is important to understand the risks of misclassification. Misclassifying workers can lead to significant fines and legal issues. Working with a contractor management service can help you navigate the complexities of contractor hiring, onboarding, and payments while minimizing misclassification risks.
Employer of Record Services
Navigating the complexities of hiring and paying remote workers in Argentina can be challenging. Employing an Employer of Record (EOR) service, can simplify the process by acting as an intermediary between your business and your remote workers. EOR services can handle payroll, compliance, and legal matters, allowing you to focus on your core business activities.
Conclusion
Hiring and paying remote workers in Argentina can be a rewarding and beneficial experience for businesses. By tapping into Argentina’s talented workforce, you can access a diverse pool of skilled professionals and expand your global reach. However, it is essential to navigate the local labor laws, tax regulations, and compliance requirements to ensure a smooth and successful remote hiring process. By following the guidelines outlined in this comprehensive guide, you can confidently hire and pay remote workers in Argentina, knowing that you are compliant with the law and providing a positive working experience for your remote team. Remember, when in doubt, consult with experts or partner with a reliable service provider to ensure a seamless remote hiring experience in Argentina.
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