Employer of Record in Argentina | Employment Law

Employment Law in Argentina

Contracts

In Argentina, written employment contracts are required for fixed-term, part-time, or casual work and highly recommended for indefinite-term employment. For work that legally requires a written employment contract, the contract must include:

• Names, addresses, and tax ID numbers for all parties
• Job title and a description of job duties
• Start and end dates plus the term of any probation period
• Terms for termination, notice periods, and severance pay
• If fixed-term, the justification for the role not being permanent
• Compensation, including salary, bonuses, and payment terms

Termination and notice periods

In Argentina, labor laws require employers to provide written notice of termination or pay in lieu of notice, with a minimum of 15 days for employees who have completed less than three months of continuous employment, one month for up to five years of employment, and up to two months for those with more than five years. In most cases, terminated employees are entitled to a fair process, and just cause for dismissal includes reasons such as theft, insubordination, serious misconduct, habitual negligence of duty, lack of capability, prolonged illness, and redundancy.

Employees with at least 12 consecutive months of continuous employment are entitled to severance pay equivalent to one month's wages for each completed year of service, with a minimum of one month’s wages. There is no statutory gratuity payment in Argentina; however, additional compensation may be provided based on employment contracts or collective agreements. As your employer of record (EOR) in Argentina, we can assist you in managing employee terminations by providing legal guidance and a personalized process to help you ensure compliance with national labor standards and minimize legal risks.

Probation periods

In Argentina, probation periods are explicitly addressed in local law, generally set at three months for indefinite-term contracts, with potential extensions up to six months through collective agreements, as specified in employment contracts.

Working hours and overtime

In Argentina, working hours are limited to eight hours per day and 48 hours per week. Employees are prohibited from working for more than eight hours a day without appropriate compensation.

Any work beyond eight hours a day is considered overtime, and employees are entitled to an additional compensation of at least 50% over their regular hourly rate. For work performed on Saturdays after 1 PM, Sundays, or public holidays, the overtime pay rate is 100%, as specified by Law No. 11,544.

Taxes

In Argentina, withholding tax is known as Impuesto a las Ganancias and is deducted by employers before paying salaries to employees. Employers must deduct this tax from employee salaries based on applicable income tax slabs and submit it to the Federal Administration of Public Revenues (AFIP).

Employers in Argentina must adhere to various taxation and regulatory compliance requirements to operate legally and avoid penalties.

• Corporate tax: Domestic companies are taxed at progressive rates: 25% for profits up to 101,679,575.26 ARS; 30% for profits between 101,679,575.26 ARS and 1,016,795,752.62 ARS; and 35% for profits exceeding 1,016,795,752.62 ARS.
• Value added tax (VAT): VAT applies to businesses with an annual turnover exceeding 300,000 ARS for goods and 200,000 ARS for services. Employers must register, file monthly returns, and pay VAT at a standard rate of 21% on applicable goods/services.
• Withholding tax (WHT): Employers must deduct WHT from employee salaries, vendor payments, and contractor fees. WHT must be deposited by the 15th of the following month, and relevant returns must be filed.
• Income tax returns (ITR): ITRs are filed annually based on company profits. Companies must also file annual financial statements with the Administración Federal de Ingresos Públicos (AFIP) and comply with electronic filing requirements.

Employer payroll contributions

Argentina’s social security system requires employer contributions that are dependent on the total number of employees, and these contributions cover pensions, medical care, disability insurance, and gratuity payments. In addition, workers' compensation is financed by contributions from state governments, employers, and employees.