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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 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.

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.

There is no specific law that governs employee data retention policy in Paraguay.

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  

• Name, Surname 

• Date of Birth 

• Education Certificates 

• Identity card

Onboarding of Foreign employees:

• Name, Surname 

• Date of Birth 

• Nationality 

• Education Certificates 

• Identity card or passport  

• Work Permit 

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:

1. 12 consecutive days for workers with less than five years of continuous service;
2. 18 consecutive days after five years and less than ten years of continuous service;
3. 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.

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.

In Paraguay, employers can ask for the following background checks:

• Education Verification

• Criminal Records

• Health Check

• Experience

• Permission to work in Paraguay

• Identity verification 

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.