Paraguay
Min. wage
(x13 payments)
₲3,044,000 /mo
About the minimum wage
Employer tax
Annual leave
12-30 days
Learn about annual leave
Notice period
30-90 days (by tenure)
Termination and notice info
Updated
Sep 2026
The default and most common contract type in Paraguay, with no predetermined end date. Provides full statutory protections including tenure-based notice periods, severance pay for dismissal without just cause, and enhanced job-stability protections after 10 years of continuous service.
Fixed-term contracts must state an objective reason (e.g., seasonal demand, a specific project, or covering a temporary absence) and are not to be used for permanent, ongoing roles. No single statutory maximum duration is set in the general Código del Trabajo, though sector-specific rules (e.g., Law 4457/2015 for micro/small enterprises) allow terms up to 1 year. If work continues after the agreed term expires, or contracts are renewed successively without new objective justification, the relationship automatically converts to an indefinite contract.
Standard daytime shifts are capped at 8 hours/day and 48 hours/week; night shifts (typically 8pm-6am) are capped at 7 hours/day and 42 hours/week; mixed shifts are capped at 7.5 hours/day. Overtime is paid at 150% of the regular hourly rate for extra daytime hours (200% for night, holiday, or rest-day overtime), limited to a maximum of 3 extra hours per day.
Up to 30 days for unskilled and domestic workers; up to 60 days for qualified/skilled workers and apprentices. Only applies to indefinite contracts. Either party may end the relationship during probation without cause, notice, or severance pay, though accrued wages, proportional aguinaldo, and vacation pay must still be settled.
Aguinaldo is a mandatory year-end bonus equal to one-twelfth (1/12) of all remuneration received by the employee during the calendar year, and must be paid in full by December 31. It is not subject to IPS contributions or considered part of ordinary salary for severance calculations.
Paraguay does not maintain a formal statutory job-title registry, but the Código del Trabajo distinguishes 'obreros' (manual/blue-collar workers, typically paid a daily wage/jornal) from 'empleados' (white-collar/salaried staff), which affects how certain benefits (e.g., notice, severance base) are calculated. Job titles and duties should be clearly stated in the written employment contract and registered with IPS/MTESS to avoid misclassification disputes.
Employer IPS contribution totals 16.5% of gross salary: 14% to the general IPS regime (funding pensions, health/maternity insurance, and administration) plus 2.5% allocated to SENEPA, SNPP, and SINAFOCAL training/public health funds. Combined with the employee's 9%, total IPS contributions equal 25.5% of payroll (Law 98/1992), internally split roughly 12.5% pensions, ~9-9.5% health/maternity/sickness, and the remainder administration.
Employees contribute 9% of gross monthly salary to IPS, covering pension/retirement, health insurance, and maternity/sickness benefits. This is withheld and remitted by the employer. Special regimes (e.g., ANDE workers at 6%, public teachers at 5.5%) use different rates.
In addition to statutory leave, employees are entitled to the following statutory benefits:
Paraguay's social security system is administered by the Instituto de Previsión Social (IPS) under Law 98/1992. Total mandatory contributions equal 25.5% of gross salary, split between employer and employee:
Occupational accidents and work-related illness are covered through IPS rather than a separate private insurance scheme.
Severance (indemnización por despido) is owed when an indefinite-contract employee is dismissed without just cause.
The Aguinaldo (13th-month salary) is a mandatory statutory bonus under the Código del Trabajo.
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Your employee's hours, time off, holidays, bonuses, and commissions are automatically calculated into payroll. RemoFirst will invoice you in either US Dollars (USD), Euros (EUR), British Pounds (GBP), Canadian Dollars (CAD), Australian Dollars (AUD), or Singapore Dollars (SGD) around the 15th of each month to make sure your employees are paid on time. To make it even easier, you can summarize your entire global team's salaries to aggregate them into one payment (instead of many individual payments).
Unlike full-time employees, contractors work on projects with multiple companies at a given time and are technically self-employed. Full-time employees are solely focused on their employer and usually receive benefits (such as health insurance, equity or stock options, and time off) as an additional form of compensation. While it can be cheaper to work with international contractors instead of paying benefits to a full-time employee, you run the risk of misclassification. It's recommended to work with an EOR for contractor onboarding and payments, so you can know that your international contractors are paid compliantly and on time.
Whenever the employee or employer has a question about, or anything else related to international employment, they can speak with our customer support team to get answers from our team of experts.
