How to hire employees in Argentina through an Employer of Record (EOR) [2023 Guide]
Apr 27, 2023
Argentina is the second-largest country in South America, with a GDP of nearly $500 billion. With a large economy, stable politics, and a diverse and talented workforce, it's no wonder many global companies are hiring in Argentina.
To hire full-time employees in any foreign country, you'll need to either establish a legal entity or hire through an Employer of Record (EOR). Registering your own local legal entity can be a time-consuming, complex, and expensive process, which is why many companies look to Employer of Record services for help. An EOR allows you to hire employees in Argentina, and it handles all the payroll, tax, and compliance considerations for you.
Interested in using an EOR service to hire employees in Argentina? Read on for a step-by-step guide.
Step by step: How to hire through an Employer of Record in Argentina
Step #1: Decide between an Argentinian EOR and a legal entity
The first step is deciding whether to establish your own legal entity or use an EOR. Whether you hire Argentinian employees through an EOR or your own entity depends on your company's size, resources, and plans to scale.
- Legal entity in Argentina. Setting up a legal entity from scratch takes a significant amount of time and work in Argentina. You'll need to appoint a local power of attorney, register with the General Inspection of Justice (Inspección General de Justicia or IGJ) and Public Registry of Commerce, deposit at least 25% of your capital into the National Bank, pay an incorporation fee, register for taxes through the Federal Public Revenue Administration (Administración Federales de Ingresos Públicos, or AFIP), and more.
- Argentinian EOR. An EOR is a third-party service that operates as an employer in Argentina on your behalf, so you don't have to set up your own entity. It allows you to hire full-time employees in Argentina and handles all the legal requirements for complying with Argentine labor laws—including payroll, contracts, and benefits. An EOR can also calculate and withhold taxes, onboard and manage employees, and run payroll for your company.
Pros and cons of EORs vs. setting up a legal entity
Cost & Implementation
✔ Less time-consuming to set up.
✔ You can start hiring within days instead of months.
✘ Becomes costlier as your headcount increases.
✘ Takes several months to set up—and requires incorporation fees.
✔ More cost-effective once you’ve hired enough employees in a foreign country.
✔ Quickly set up new hires, often within 1-14 days, depending on the provider.
✔ Supports large-scale expansion in a new market.
✔ Manages all of your compliance work for you, takes on liability, and provides localized employment contracts.
✘ Can’t tailor certain policies, and other HR/legal processes, to the needs of your business.
✘ Requires expert knowledge of local laws and tax regulations and internal legal resources, as your company is liable for all legal and compliance infractions.
✔ Can tailor certain policies, and other HR/legal processes, to the needs of your business.
Payroll & Benefits
✔ Quickly pay and insure employees around the world.
✔ Taxes are filed for you.
✘ Must manually keep track of statutory deductions and employee entitlements for every hire.
Step #2: How to choose the best EOR for your business
Before you choose a platform, you should consider the services you will need, and how much you plan to grow your global hiring presence.
- Is the EOR active in the countries in which you need to hire? The first, and perhaps most obvious consideration when choosing an EOR for global expansion.
- Does the EOR own its entities in the countries it services? If the EOR does not own the entities, it means they are partnering with a local or third-party provider.
- How does the EOR protect your sensitive and confidential information? It is vital that your EOR has the appropriate data protections in place, as well as secure technology that eliminates potential disclosures of private information.
- Does the EOR offer automated solutions? You may want to look for an EOR that automates the busy work like onboarding and benefits enrollment and other common HR and IT tasks.
- What is the EOR’s support model? It’s essential that your EOR has support staff that are both easy to contact and experts in the regulations of the countries in which you are hiring.
Get the full checklist in our guide: What is an EOR?
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Step #3: How to hire and onboard your Argentinian employees
After choosing an EOR that works in Argentina, you can start onboarding your new employees. You'll need to collect certain information about each hire in order to register them in the Special Payroll Book, which is overseen by the Argentine Ministry of Labor, including:
- Their full name
- Their date of birth
- Their national ID number
- Their gross earnings
- Their position and department
- Their hire date
- Their deductions
- Their marital status
- Their tax identification number (CUIL) for foreign employees
You'll also want to send your employees in Argentina an offer letter—this isn't required in Argentina, but it's still a best practice that ensures that the offer of employment is clear, the terms are defined, and the tone is set for a successful employment relationship. The offer letter should include:
- Job title, job description, start date, and any details about the probationary period
- Working hours
- Details on compensation, including salary, equity compensation, benefits, and paid leave
- 13th month salary policy
- Termination terms and notice periods
- Employment terms, including whether their employment is on an indefinite or fixed-term contract
- Confidentiality, non-disclosure, non-compete, and non-solicit clauses, if applicable
- Contact information for the employee and the employer
You can onboard new hires anywhere, end to end, with Rippling. Request a demo today.
Step #4: Run payroll
For the A-to-Z on global payroll, read our comprehensive guide to running international payroll for employees in Argentina.
Once you’ve collected a new hire’s information and both parties have signed labor contracts, an EOR will pay your Argentinian employees in Argentine pesos (ARS), while automatically withholding legally required taxes from each employee's monthly salary. In Argentina, employer deductions include contributions to:
- Pension Fund System
- Health insurance
- Labor risk insurance
- Life insurance
- Occupational disease trust fund (FFEP)
Frequently asked questions about hiring through an EOR in Argentina
How much does an EOR cost?
There are two common pricing structures for EORs:
- Fixed monthly fee per employee
- Percentage of payroll plus applicable taxes
With both pricing structures, look out for various administrative fees, onboarding charges, costs for supplemental features, and other additional expenses. If you're looking to keep your EOR costs minimal, keep in mind that you don't need to use an EOR for your entire workforce. You can segment its use, and you'll only be charged for the employees you hire and employ through the EOR.
What is the difference between an EOR and PEO?
A Professional Employer Organization (PEO) is a service that co-employs a company's workforce and eliminates some of the hassles of global employment by providing administrative services—like paying employees, handling compliance, and filing payroll and income taxes. Your company and the PEO services are jointly responsible for the workforce. An international PEO can help you manage your workforce in Argentina, but it won't allow you to hire employees without setting up your own legal entity in the country.
An EOR, on the other hand, is the sole employer for the portion of your workforce you use it for—meaning it assumes all associated liabilities. An EOR allows companies to work with employees in other countries without setting up a local entity and handles many of the tasks associated with managing that workforce from a foreign country.
Does an EOR protect your sensitive and confidential information?
Outsourcing any tasks related to payroll management can help you save time and ensure local compliance. But sharing sensitive data with a third-party vendor always comes with some risk, especially if any vendors handling your data use manual uploads.
You should seek out EORs that prioritize data protection, including:
- Compliance with industry-standard privacy regulations in different countries.
- Secure infrastructure with around-the-clock maintenance.
- Carefully vetted personnel.
You can also establish a Data Processing Agreement (DPA) with a payroll service that mandates sound privacy practices and provides legal protection.
What are the mandatory benefits for Argentinian employees?
Argentina’s labor laws require several mandatory benefits and entitlements for all full-time employees living in the country. These include:
- Minimum wage
- Social security, which includes retirement plans, disability benefits, life insurance, employment insurance, and family allowances for maternity leave, paternity leave, and childcare costs
- Health insurance
- Annual leave, which is based on years of service
- Sick leave, which is also based on years of service
- Public holidays
- Overtime pay
- Severance pay
- 13th month salary
Public holidays can vary by municipality and religion, but some national holidays afforded to all employees include:
- New Year's Day
- Memorial Day for Truth and Justice
- Good Friday
- Labor Day
- May Revolution Day
- Flag Day
- Independence Day
- National Flag Memorial Day
- Day of Respect for Cultural Diversity
- Day of National Sovereignty
- Immaculate Conception
For more information on mandatory benefits in Argentina, read our complete guide.
What are the employer costs for full-time employees in Argentina?
When you hire employees in Argentina, you (as the employer) are responsible for deducting certain taxes from their paychecks. Here are the details:
Pension Fund System
18-21% (depending on the company's headcount and annual earnings)
Labor risk insurance
Occupational disease trust fund (FFEP
100 ARS per employee
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Rippling and its affiliates do not provide tax, legal or accounting advice. This material has been prepared for informational purposes only, and is not intended to provide, and should not be relied on for tax, legal, or accounting advice. You should consult your own tax, legal, and accounting advisors before engaging in any related activities or transactions.