Payroll in Argentina

Payroll Process in Argentina

In Argentina, the payroll process can't simply be reduced to similar processes elsewhere. That is, while the employee payroll process — from pay negotiation pre-hiring to invoicing post-placement — follows a similar pattern, Argentina's elusive economic realities make payroll much more complicated.  

To manage Argentina payroll requirements, employers often need to dance around a wide range of inflationary pressures, ever-changing salary adjustments and increases, and a growing shift to use employee self-help HR applications.  

From an employer's perspective, especially an international employer actively preparing payroll for talent in Argentina, the payroll process becomes more of a burden, if not a liability, draining HR function.  

Factor in Argentina payroll taxes — in a country whose workforce skills vary dramatically, particularly between agriculture and IT service sectors — and you're more inundated by yet more payroll complexities and variations.  

This combination of factors calls for an agile response by adopting best-in-industry payroll services such as those offered by Skuad.

Payroll Processing in Argentina

The complexities involved in the payroll process have given rise to a growing number of automated, self-managed HR solutions, including cloud payroll in Argentina and, generally, more extensive investment in the ICT sector at large.

This, in turn, opens up new possibilities for payroll processing in Argentina. Tapping into such possibilities becomes, then, mandatory for any international employer wishing to manage or already mid-neck in managing payroll in Argentina compliantly.

Skuad: Payroll Processing in Argentina

Tangoing payroll complexities and the ever-changing regulatory landscape is not just about payroll outsourcing in Argentina. Instead, processing payroll is — and should be — part of an integrated package of payroll services in Argentina.

As an established and industry-defining PEO payroll provider in Argentina, Skuad is every employer's choice in payroll processing management to

• Manage employee and contractor payments
• Provide custom statutory benefits
• Manage deductions according to Argentina payroll laws
• Manage employee expenses
• Act as employer's extended HR department
• Secure confidential and proprietary data

Payroll Management in Argentina

For years, Argentina has been experiencing an evolution in payroll processing and management from paper-based to automated and cloud-based platforms.

Today, automated payroll management is a reality in many Argentine businesses. By streamlining payroll processes, payroll management software helps HR departments in companies focus on more strategic functions. This new reality comes, though, with a whole set of compliance issues — more so if you're an international employer not particularly familiar with Argentina payroll laws.

The following is only a snapshot of compliance penalties you should expect, if you go neck-deep into payroll management in Argentina without having proper expertise in your bag:

• ARS 200-ARS 400 — for failing to file the required tax return
• 100% — in fines of unpaid taxes
• ARS 3,000-ARS 10,000 — for certain tax infractions

So, how would you know — without any expert legal advice and built-in compliance under your belt — you're all set and fully payroll-compliant in Argentina?

Think of payroll management software only as a milestone — not an ultimate goal — along a payroll journey.

That is, while the payroll management software market is witnessing a boom in Argentina — and elsewhere — software alone is not a magic solution to your compliance needs if not informed by in-depth knowledge of and extensive experience in compliance complexities in Argentina.  

To stay compliant, you need more than just another piece of software to integrate into your in-place HR system. Contrarily, if you don't have one, only use a payroll system that speaks to your specific compliance needs.

Payroll Compliance in Argentina

Taxation is every employer's headache. This cannot be more true if you're operating offshore and can't figure out where to start — not to mention getting to know which compliance laws and rules to follow.

Even worse, your native payroll system may not mesh in well with payroll systems in use — or approved by relevant regulatory bodies — to process your payroll requirements.

In Argentina, compliance becomes a double pain not only because of hard-to-navigate labor laws, but especially when you're an international employer wishing to manage your payroll locally.

Unless you've your local legal entity, you're on your own in Argentina to dance your way around salaries and wages, benefits, allowances, social security, pensions, and more.

To be payroll-compliant in Argentina, then, is a delicate balancing act of managing your internal HR considerations and external legal complexities. Tangoing payroll considerations merits a deeper look at payroll laws and components in Argentina.

Payroll Components in Argentina

The range of labor laws governing employer-employee relations — including payroll management — in Argentina is extensive. Far from being exhaustive, here is a list of Argentina's most important labor laws and legislation:

The Constitution (Section 14 bis)

• Law on Contract of Employment 1974 (Ley de Contrato de Trabajo, LCT):
  Includes around 300 sections
  Has been amended several times
  Covers a wide range of subjects such as contract of employment, compensation, public holidays, and paid leave

• Law 23551 of 1988
  Introduced first in 1945 as Decree 23852 and amended several times since.
  Provides for trade union matters

• Law 14250 of 1954
  Has been amended several times
  Regulates collective bargaining matters

• Law 14786 of 1958 (Ley 14786 de Conciliacion Obligatoria)
  Regulates collective labor dispute matters

These laws — and more — specify, moreover, what minimum statutory benefits, allowances, leaves, and deductibles are mandatory in Argentina.

Compensation

In addition to a recently raised — because of inflation, again — minimum wage of 32,616 Argentine pesos (ARS) in February 2022, employees in Argentina are entitled to a 13th salary or statutory annual bonus (aguinaldo or sueldo annual complementario, SAC) payable in two parts on June 30 and December 18 annually.

Working Hours

The working hours regulations are

• Eight hours per day; forty-eight hours per week
• Should not exceed 44 hours per day for regular work, 42 hours for night shifts, and 36 hours under hazardous conditions

Overtime

In case of overtime, the laws elucidate the following:

• Set at 50% for work done during regular working hours
• Set at 100% for any additional working hours and on public holidays

Social Security

The contibution of employers and employees toward social security is expected to be 25.50% and 17%, respectively.

Sick Leave

The conditions of payment for leaves taken by an employee are described below.  

100% pay:

• Up to three months per year, if an employee has been in service for five years or less
• Up to six months per year, if an employee has been in service for over five years
• Six-twelve months to cover family-related sickness

Zero pay:

• For a period over a statutory, fully paid 12-month period

Parental Leave

• Forty-five days before and forty-five days after childbirth
• Entitlement of cash benefits from public social security funds
• Not a basis for termination of employment
• Two daily breaks, 30 minutes each, for breastfeeding

Public Holidays

For a complete list of official public holidays check dias festivos.

Payroll Taxes

These are applied progressively as follows*:

5% — 0-64,532.64

9% — 64,532.64-129,065.29

12% — 129,065.29-193,597.93

15% — 193,597.93-258,130.58

19% — 258,130.58-387,195.86

23% — 387,195.86-516,261.14

27% — 516,261.14-774,391.71

31% — 774,391.71-1,032,522.30

35% — 1,032,522.30 onwards

(*All amounts are in ARS)

Other Laws

Employment Labor Act 20744 — provides for collective bargaining agreements and employment conditions

The Health Insurance Act 23660 — provides for adequate healthcare requirements for employees and family

Employees’ Pension and Retirement Act 24241 — establish rights to pension plans, retirement arrangements, and disability benefits

The Occupational Health and Safety at Work Act 19587 — regulates health and safety conditions in the workplace  

Employee Benefits in Argentina

In addition to all basic statutory employee benefits mentioned above, employees in Argentina can enjoy an expansion to entitlements due to continuous employment, such as increased holiday entitlements, sick leave, and notice periods.  

Moreover, employees could enjoy additional benefits for a specific condition (e.g. disability) or upon agreement with employers.

At this point, you — as an international employer — should have a good idea about what payroll tango in Argentina constitutes.

Independently, you can see how much work — and resources — are needed to manage your payroll needs in Argentina.

Having Skuad at your back and being covered by a leading payroll management system, you can also see what cost-efficiency and resource optimization options are at your disposal.

So why tap your feet cautiously to tango your way around payroll in Argentina when Skuad can show you how to impress your dance partners (aka your employees) using a seamless, cost-effective, and secure payroll management offering?