Country Playbook
Region: Americas
Country: Argentina
August 2015
Any US tax advice contained herein was not intended or written to be used, and cannot be
used, for the purpose of avoiding penalties that may be imposed under the Internal Revenue
Code or applicable state or local tax law provisions.
These slides are for educational purposes only and are not intended, and should not be relied
upon, as accounting advice.
This material has been prepared for general informational purposes only and is not intended to
be relied upon as accounting, tax, or other professional advice. Please refer to your advisors for
specific advice.
Region – Americas
Country – Argentina
1. Country Currency/Abbreviation
Argentina Peso – ARS – AR$
2. Tax Year Designation
Calendar – Year Start 1/1; Year End 12/31
3. Minimum Pay Frequency
Pay frequency can be mandated as hourly, daily, weekly, or monthly
dependent on the nature of work performed.
4. National Minimum Wage
AR$ 4716.00 Per Month; AR$ 23.58 per hour
5. Workday/Workweek
Basic workday 8 hours; maximum 48 hours per week; mandated shift
differential surcharge at 35% of the regular rate.
6. Overtime Considerations
Hours over 8 per day paid at 1.5 times regular rate. Double time is paid for
any hours worked after 1 p.m. on Sunday, Saturday or Holidays.
7. Employment Contracts *
Argentina does not mandate labor contracts, but it is common practice for
parties to enter into labor contracts. There are seven designations of labor
contracts in Argentina.
1. Undetermined-Term: All labor relationships are considered
indefinite unless a fixed term is specified within a labor
contract.
2. Fixed-Term: If a labor relationship has a fixed term a labor
contract is required, BU must adhere to special considerations
when preparing the contract. If all fixed term contract
terms/conditions are not addressed, the contract is null and
the relationship becomes indefinite.
3. Labor Contract for Extraordinary/Special Service: Terms of
this type of contract center on labor for a specific service and
the burden of proving this contractual relationship is the
responsibility of the employer.
4. Seasonal Labor Contract: Defined by an undetermined term
contract with seasonal periods of activity.
5. Contract of Apprenticeship: For persons between the ages of
16 and 28, a labor period of more than 3 months and less than
one year, and participation in the capacitation program. This
type of contract must be in writing.
6. Part-time Labor Contract: Employees under this designation
cannot work more than two thirds of the full time work
schedule and cannot work any overtime.
7. Student Trainee Programs: Internships are regulated under a
different set of laws, but if those considerations are satisfied
the relationship is not considered employer-employee. The
student can receive compensation for services and the
employer is not required to comply with normal payroll
regulations.
8. Social Security Program *
Although there is no standard social security program, employers and
employees are required to contribute to health and unemployment
programs.
9. Income Tax Withholding *
N/A
10.
Unemployment Taxes *
Employers and employees in Argentina are required to contribute to
the unemployment tax system.
11.
Termination Notes *
In many cases, if there is no just cause for termination the employer
is required to pay the associate severance.
12.
Other Special Payroll Considerations *
 Argentine employees are entitled to two semi-annual bonuses that
summed should be equivalent to one month wages (Aguinaldo).
 Remuneration statements are required and must include name and
address of employer, hours worked or units completed, tax ID’s of
employer and employee, deductions taken for the gross pay, and
hire date.
 Employers must contribute 6% of employee wages to health
programs on behalf of the employee while also withholding 3% of
the employee’s wages from the employee.
 Employers must contribute 17-21% of employee wages to
unemployment/pension programs on behalf of the employee while
also withholding 14% of the employee’s wages from the employee.
13.
Summary Analysis/Recommendation
Country Labor Climate:
Although labor contracts are not required in Argentina, it is
considered best practice. In the event there is no written contract,
labor dispute resolutions will favor the individual rather than the
employer/company.
Employment Status Recommendation:
The decision tree should be used as a foundation for determining
employment status. If there is any ambiguity of status, BU should
craft employment contracts that specify a fixed term length or
specify the completion of a project or task, as these contracts reduce
the risk associated with determining the individual is not an
employee.
Independent Contractor Payments:
If BU determines the individual is an independent contractor, there is
medium to low risk of making payments through accounts payable.
There are circumstances in which the Argentine government
requires the company to establish permanent business presence
even in circumstances in which the company only has a relationship
with an independent contractor. If this determination is made, the
company will face penalties and fines for not establishing presence,
so this must be considered.
Recommendation:
1. If BU has business presence within Argentina and the labor
relationship is determined to be independent contractor status,
there is extremely low level of risk of making payments through
AP.
2. If BU does not have business presence within Argentina and the
labor relationship is determined to be independent contractor
status, there is moderate to low level of risk of making payments
through AP.
Employee Payments:
When making the determination of risk and cost of establishing an
internal payroll program, numerous factors must be taken into
consideration. Within this document, sections denoted with an
asterisk “*” are some of the basic components of that analysis.
Once an individual is identified as an employee, there are many
requirements inherited by the employer. Those requirements range
from social benefit programs to employer related taxes directly
attributed to headcount. Factors such as risk of being out of
compliance, the capital cost associated with being in compliance,
and additional administrative costs to establish and maintain the
programs associated with the requirements are key components of
determining the best solution for paying employees.
Recommendation:
1. Due to the extensive requirements related to payroll processing
in Argentina, the recommendation is to seek a 3rd party vendor to
administer this program.
2. If possible, the best solution is to contract with an in country
staffing entity that will hire employees and own employeremployee requirements for a negotiated fee.