Understanding Payroll in the Argentina: What Global Companies Need to Know About Argentina Payroll

Apr 4, 2017  | Topic: Country Payroll

Argentina has a highly literate and educated population and is a huge trading partner of the United States. In 2014, The US sold $10.8 billion worth of services and goods to Argentina. In total, companies from the US operating in Argentina have a total investment of around $15 billion. There are just over 500 companies from the US with operations in Argentina.

Overall, the opportunity for companies looking to expand into Argentina is quite good, especially if you have a global payroll provider to help you out.

Getting Started With Payroll in Argentina

Establishing a payroll in Argentina can be an arduous process. First, your company name must be verified by the Office of Corporations, a process that takes a day and costs $210 ARS (USD $14, £11, €13). All partners must certify themselves as signatories, which can cost anywhere from $350-$500 ARS (USD $23-33, £15-26, €18-31) per signature. The National Bank must hold at least 25% of the initial capital, which must be deposited ahead of time. This comes with a fee of $30 ARS(USD $1.95, £1.56, €1.83)

It takes 2 days to publish a company notice in Boletin Official, but a business can expedite this with a fee of $2,500 ARS (USD $163, £131, €153). The Public Registry of Commerce then takes an incorporation fee of $100 ARS (USD $6.50, £5.21, €6.10) and the company is registered with the Public Register of Commerce of the City of Buenos Aires. This takes 5 days and may cost up to $3,360 ARS (USD $218, £175, €205). Companies must then buy special books and obtain a Public Notaries College form to turn in those books for rubrication. The General Inspection of Justice is the official body for rubrication, and the process takes around 5 days (expedited) and costs up to $4,570 ARS (USD $297, £238, €2.78).

Next, the corporate manager must get a Fiscal Code for the company along with a tax ID. This takes 5 days. Registry of a "turnover tax" with the Public Register of Commerce of the City of Buenos Aires and registry with the Unified System for Labor Registration takes care of all procedures, except for the mandatory insurance that a foreign company must carry and the rubrication of books of wages with the Labor Agency.

Payroll AssessmentEmployment Laws/Employee Rights

Argentina is one of the few countries that gives a full scope of employee rights to all employees regardless of contract type. It also limits the tenure of fixed term contract workers - they may be hired for a maximum of 5 years. Temporary workers have a 6 month maximum stay. Companies are often rewarded for hiring previous unemployed or disabled people.

So called "casual employment," along with contract employment, requires a written agreement. These agreements must function in line with industry-wide collective agreements that take precedence. It is even possible to impose a collective agreement in Argentina to individual companies.

Argentina limits employee workday to 8 hours/day, 48 hours/week. There are a few exceptions. However, work that has been deemed unhealthy must cease after 6 hours a day, and no overtime may be performed. Employees are required to have rest periods of 12 hours per 2 days or before hitting 35 continuous hours worked in a week.

Compensation, Bonuses, Severance

Argentina maintains a minimum wage of $8,060 ARS/month (USD $453, £345, €385) regardless of the age or experience of the worker.

Two weeks' worth of holiday pay is a mandatory bonus for any employee who has lasted more than 6 months on the job, and increases along with the length of employment. Employers are responsible for paying out benefits and salary to employees during annual leave.

Bonuses are common in the tech and finance sectors of Argentina. Bonuses are initially given at the discretion of the employer; however, once established, they can become a mandate by law. Companies should be sure to detail exactly what bonus policy will be within a company in employee contracts, as bonus payouts have been the basis for many legal claims in Argentina.

Tax Requirements/Collection/Withholding

Argentina maintains a tax withholding scale that maxes out at 35 percent. This top tax rate applies to employees who are annually making $120,001 ARS (USD $7,798, £6,247, €7,307) and above only. Employees without a spouse earning less than ARS $5,783 ARS (USD $376, £301, €353) per month pay no taxes, nor do married couples who are earning less than $7,998 ARS (USD $520, £416, €487) per month.

Leave – Sick, Maternity, Vacation, Absence, Holidays

Employees are required to receive 10 days continuous leave after getting married. The death of an immediate family member entitles an employee to 3 days continuous leave, and a sibling nets one day of leave. If an employee has a school exam, employers are required to give 2 continuous days leave with a maximum of 10 days per year.

Sick leave is generous in Argentina. If an employee has worked for a company for less than 5 years continuously, he or she is entitled to a maximum of 3 months paid leave. This extends to 6 months paid leave if they have been on the job for more than 5 continuous years. The employer must also keep the position open exclusive for that employee for up to 12 months, and that employee has the right of first refusal for the position.

Date Argentina's Public Holiday Schedule
 January 1st  New Years Day
 Monday before Ash Wednesday (February - March, Floating)  Carnival Monday
 Tuesday before Ash Wednesday (February - March, Floating)  Carnival Tuesday
 March 24th  Truth and Justice Memorial Day
 April 2nd  Malvinas Day/Veteran's Day 
 March - April (Floating)  Good Friday
 May 1st  Labour Day
 May 25th  May Day Revolution
 June 17th  Martin Miguel de Guemes Day
 June 20th  National Flag Day
 July 9th  Independence Day
 3rd Monday in August  St. Martins Day
 2nd Monday in October  Day of Respect for Cultural Diversity
 Fourth Monday in November  Day of National Sovereignty
 December 8th   Immaculate Conception Day
 December 25th  Christmas Day

Navigating Your International Payroll in Argentina

Argentina is a wonderful place to do business. However, the regulatory structure that upholds this favorable landscape is difficult to navigate alone. Investing in a global payroll solution ensures that you have all paperwork properly filed and logistics handled from day one.

This article is for informational purposes only and not intended to convey or constitute legal or any other advice. It is not a substitute for advice from a qualified professional.