Chile

Employee benefits in Chile

Retirement Benefits

Employees in Chile must join a private pension fund (Aseguradora de Fondos de Pensiones, AFP), to which mandatory contributions are made. Employers do not contribute to the retirement program but contribute 3% to other mechanisms (2.8% for the Individual Unemployment Account and 0.2% to the Solidarity Unemployment Fund).

In January 2025, the Chilean Congress agreed to increase employers’ contributions to their workers’ pensions. This increase was achieved with the approval of the Pension Reform. The new contribution is 8.5% of the worker’s taxable remuneration. This percentage is distributed as follows: 4.5% to the individual capitalization of the worker, 1.5% to the contribution with protected profitability, and 2.5% to Social Security

Cash Sickness Benefits

Chilean labor law does not limit the duration of sick leave. The medical authority treating the employee determines the duration. Cash sickness benefits are paid through the National Health Fund (FONASA) or the Private Medical Fund (ISAPRE) chosen by the employee.

Medical Benefits

The health system in Chile is complex and expensive for those who want to opt for premium coverage. For this reason, the government has prioritized systems that protect the inhabitants from high medical expenses and catastrophic illnesses.

Healthcare coverage is provided through the National Health Fund (FONASA) or the Employee’s Private Medical Fund (ISAPRE). Employees contribute 7% of their monthly pensionable income up to 87,8 U.F. (US$ 3,481,46). Employers do not contribute to FONASA/ISAPRE. Employees covered by an ISAPRE may make additional voluntary contributions to receive enhanced benefits. Regardless of the economic sector, most major local and multinational employers nationwide provide supplemental health benefits through private medical insurance, usually linked to a group life insurance policy.

Other state systems that support Chileans’ health care:

• GES / AUGE: Government system that provides special coverage for the 87 diseases with the most significant impact on the Chilean population.
• CAEC: Current government system for members of the private health system (Isapre) for surgical interventions that are considered catastrophically expensive, limiting the payment to minimum and maximum amounts established by Law

Every employer should have discussions with staff to explain the systems and the best way to use complementary health insurance.

Nothing on this country page is intended to be legal, financial, or tax advice, and readers are advised to consult with their appropriate advisors regarding any legal, financial, or tax implications this information may address.