COVID-19 has distributed the work culture globally, and Remote work has become a savior for employers and employees. Today, organizations around the globe are using remote work culture to not only decrease their expenses but also increase productivity. International companies are now looking at countries like Argentina, where they can easily find highly skilled individuals at relatively lower costs. So, if you are also wondering how to hire and pay remote employees in Argentina, you have come to the right place.
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How To Hire And Pay Remote Employees In Argentina: 4 Things To Remember
The relationship between an employee and employer is not limited to salary and productivity only. The employer has to focus on multiple factors that will not only save it from penalties but also help in acquiring top talent. So it’s important to know some pin points before knowing how to hire and pay remote employees in Argentina.
Taxes are really a pinpoint for employees, and every employer must be completely aware of a country’s tax regulations and slabs. In the case of Argentina, the tax slabs are not really lucrative. The tax rate starts from 5% and goes upto 35%. The employer must be aware of the slab under which their employee’s salary falls.
#2. Work Culture/Labour Laws
This is very important. Every country has a specific work culture and labor laws suitable for its citizens. Before hiring a candidate from Argentina, one must know the work culture. Now, labor laws contain multiple terms like working hours, working days, leave policy, and many more. In the case of Argentina, the average working hours are 40-48 hours a week, which comprises 5-6 working days.
Similarly, employers must follow the minimum wage concept, which states every Argentinian citizen must earn a minimum wage of ARS 87,987 per month. These are just a few. An employer must comply with other rules like paid leaves, holidays, overtime policies, etc.
#3. Payroll Deductions
Now, when it comes to deductions, taxes are not sufficient. Every country has specific payroll deduction rules. Now, some employers offer extra perks instead of deductions. From insurance to pension and medical care to multiple allowances. In the case of Argentina, the government has demanded almost all perks from employers, including pension, life insurance, medical care, family allowances, unemployment, etc.
The deductions should be timely and have no impact on the minimum wage. Simply put, the minimum wage must exclude these deductions. Also, the employer should provide legal proof of all these deductions.
Here comes the main factor. At the end of the day, money is what an employee needs. Now, if you are hiring from another country, currency might trouble you. In Argentina, people usually prefer Argentine pesos, but in the case of high salaries, people are ok with US Dollars.
Now, if you are willing to pay in local currency, you have two options: establishing a local entity or an intermediary payment service. If you establish a local entity, you have to invest both money and time. On the other hand, If you opt for an intermediary service, be ready to pay exchange fees, transaction fees, and many more.
How To Hire And Pay Remote Employees In Argentina: Step By Step Guide
Hiring an individual from another region is not a simple task; It involves multiple risks, time, and, of course, money. Here is a step-by-step guide on How to hire and pay remote employees in Argentina.
Step-1: Learn About Local Market
Well, even if you are not interested in establishing a long-term cooperation or permanent establishment, it is important to learn at least the basic rules and regulations of the country, like taxes, payroll, etc.
Step-2: Hiring Options
Now, Hiring options are very important because the next steps are completely based on your hiring options. An employer has three hiring options: permanent establishment, EOR, and Contracts.
Suppose you are looking for long-term and full-time employees from Argentina and can invest some extra dollars you have to establish a permanent legal entity in the country. This legal entity will be responsible for the whole hiring process. It offers you more freedom and control over the hiring process and even the hired employees.
This entity will take care of taxes, payments, payroll, currency, legal disputes, and everything. The only negative thing is you have to spend money and time. However, it is the best option if you are positive about expanding your business in the country.
EOR, or Employer of Record, is nothing but an intermediary entity that takes responsibility for the complete hiring process. It’s like you have hired an agency for recruitment, you have to pay a specific amount to the EOR, and it will look at everything on your behalf. Remember, the amount has no relation to the employee’s financials. This amount is the fee of the EOR.
Many local and global EORs offer such services at reasonable prices. These EORs have enough knowledge about legality, laws, policies, etc.
If you want to hire an individual for short-term requirements, the best hiring option is a contract. As its name implies, you will sign an employment contract with the candidate for a specific period. Now, you can add or remove conditions at your convenience, but the candidate must be ok with your conditions. In most cases, the payments are released after the contract is completed if it is a short contract.
On the other hand, If the contract is too long, you can pay monthly. The main benefit for the employer is that it doesn’t have to worry about taxes, payroll, labor laws, and other such policies. It also provides freedom to employees.
Based on the above hiring options, you may proceed with the actual hiring, like interviews. If you have chosen EOR, then you just have to pay the EOR and relax. If you have chosen a contract or permanent establishment, start with your hiring process.
Once hiring is completed, It’s time for onboarding. In case of a contract, fix a meeting with the candidate and explain all the requirements and conditions to him.
So this is the step-by-step guide for How to hire and pay remote employees in Argentina. The contractual hiring option is best if you have a tight budget and short-term requirements.
On the other hand, if you have money but you don’t want the permanent establishment of business in the country, you can choose EOR. Lastly, if you are ready to start and expand your business in the country, start with establishing a small legal entity there.
Providing employment is one of the most appreciated works, but it requires multiple resources including continuous expenditure. And when it comes to hiring employees from another region the process becomes complex and sometimes risky. Argentina has become a bright spot for employers, and this detailed guide on how to hire and pay remote employees in Argentina will help you grab the opportunity. Follow the guide and enjoy a smooth and risk-free hiring process.