Run your business seamlessly with Neeyamo as we help you go beyond borders to manage your international payroll and hire new talent in Paraguay.
Paraguay is a country located in central South America, bordered by Argentina to the south and southwest, Brazil to the east and northeast, and Bolivia to the northwest.
Paraguay has a growing industrial sector, which includes sugar, cement, textiles, beverages, wood products, steel, base metals, and electric power.
Neeyamo provides assistance for the onboarding and management of employees in Paraguay, along with the processing of a firm's payroll, compliance, benefits, and more.
Tools And Instances
Facts And Stats
Paraguayan Guaraní (PYG)
01 January - 31 December
Country Calling Code
Handling payroll for a widespread workforce can pose a major challenge for any firm. The added complication of compliance can make things worse and drastically affect the time and efforts that can be used in other equally important aspects of an organization's development.
Over the years, Neeyamo has observed these complexities and strived to provide a global payroll solution through a single technology platform, Neeyamo Payroll.
Payroll tax is the percentage amount retained from an employee's salary and paid to the government to invest in the general population's welfare.
9.00% - Social Security
Employee Income Tax - 10%
(Applicable to all resident employees in Paraguay with an annual income equal to or higher than 36 monthly minimum salaries (approximately 13,000 USD annually). The salary used is that which is in force on 1 January of every year).
Employers must contribute 16.5% towards Social Security.
Undoubtedly, payroll is a critical process for any organization. The pay cycle in Paraguay refers to the period for which an organization pays its employees, and this can vary depending on the pay frequency that the organization chooses to adopt.
In Paraguay, the payroll frequency can be weekly, bi-weekly, or monthly. The employer must pay salaries at least once a month.
13th Month Cycle
13th-month payments are mandatory in Paraguay, and an additional month’s salary must be paid by the end of the year. This payment is generally referred to as a Christmas bonus equal to one-twelfth of all remuneration accrued during the year.
An Employer of Record service provider helps you get rid of the hassle of handling the complexities that come with setting up a new employee in remote locations. They act as legal employers, facilitate salary payments, and handle everything from health insurance, payroll taxes, and employee benefits to comply with local tax laws and regulations.
This ensures that the client company can focus on the employee’s everyday tasks safely in the knowledge that they have a cost-effective solution as they continue their global expansion.
HR Mandates and Practices
The monthly minimum wage in Paraguay is 2,298,324.00 PYG.
All work above the standard hours per week is paid as overtime and regulated by the employment contract/collective agreements. When an employee is requested to work overtime or work on holidays, there is a maximum of 57 hours a week and 3 hours a day.
All overtime hours above 48 hours a week are paid at an overtime compensation rate of 150% of the employee’s regular pay rate for overtime work performed during daytime hours and 200% for hours worked during the night or on a public holiday.
Data Retention Policy
There is no specific law that governs employee data retention policy in Paraguay.
Hiring and Onboarding Requirements
When an employer hires an applicant, they need to ensure that the employee has a single permit to work in Paraguay.
Various common background checks, like education, criminal records, health checks, experience, permission to work in Paraguay, etc., are carried out before hiring an employee.
An employer is confined by law to ask the candidate only those questions that relate to the nature and working conditions of the job offered. The applicant has the full right not to answer a question that violates the law and is not related to the job. When an employer hires an applicant, they need to ensure that the employee has a single permit to work in Paraguay.
The following documents are required during the onboarding of a citizen:
Onboarding details for local
Date of Birth
Onboarding of Foreign employees:
Date of Birth
Identity card or passport
The probationary period is 30 days for unqualified employees or domestic workers and 60 days for qualified workers or apprentices.
The following holidays are observed in Paraguay:
- Jan 1: New Year's Day
- Feb 27: Heroes' Day
- Apr 6: Maundy Thursday
- Apr 7: Good Friday
- May 1: Labor Day / May Day
- May 14: National Holiday
- May 15: Independence Day
- Jun 12: Chaco Armistice
- Aug 15: Founding of Asuncion
- Sep 29: Boqueron Battle Victory Day
- Dec 8: Virgin of Caacupé Day
- Dec 25: Christmas Day
In Paraguay, Every worker shall be entitled to a paid annual leave after a year of work within the same employer that shall be at least:
- 12 consecutive days for workers with less than five years of continuous service;
- 18 consecutive days after five years and less than ten years of continuous service;
- 30 days after ten years of continuous service
Maternity leave is 18 weeks (in normal circumstances) and 24 weeks (in case of medical complications).
In the event of multiple births, the woman receives an additional 30 days per child.
A new father can take two weeks' paid paternity leave after the delivery of the child.
Employees are entitled to medical care for up to 26 weeks.
There are no provisions in the law regarding parental leave.
Emergency Family Leave
At the request of the employee, the employer shall provide three days of full paid leave in case of marriage, three days in case of birth of his child, and three days in case of death of his spouse, children, parents, grandparents, or siblings.
The termination process varies according to how the employment agreement and collective agreement are in place and is based on the type of contract and reason for termination. All notices of termination must be delivered by the employee in writing.
An employer cannot unlawfully dismiss employees employed for more than ten years and only for a just cause.
The mandatory notice period is one day.
In Paraguay, the severance pay (if applicable) is dependent on the employee’s length of service.
Severance pay for employees is calculated as 15 days of regular salary for every year of service up to a maximum payment of 50% of the employee’s annual salary.
An employee with over ten years of employment with a company (if an employer is not able to prove a just cause to a labor court) may need to be reinstated or have the right to a payment twice the amount of the regular severance pay.
People traveling to Paraguay for work must obtain a business visa to enter the country unless their country of origin is exempt from visas to Paraguay.
Provisional Residence Permit – valid for six months and can be renewed for an additional six months, intended for employees working for foreign companies for short periods.
Temporary Residence Permit – valid for a year and can be renewed repeatedly for up to 6 years depending on employment area and reason for extending the stay. The application must include an employment contract with a business incorporated in Paraguay.
Permanent Residence Permit – allows the applicant to live and work in Paraguay indefinitely.
The application process can take up to 90 days.
The business visa is valid for six months and can be renewed for an additional six months. During that time, the candidate must apply for a resident permit, which allows for employment. The application must include employment confirmation.
Employee Background Checks
Legal and Background Checks
In Paraguay, employers can ask for the following background checks:
Permission to work in Paraguay
An employer is confined by law to ask the candidate only those questions that relate to the nature and working conditions of the job offered. The applicant has the full right not to answer a question that violates the law and is not related to the job.
Last updated on August 28, 2023
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