Employer of Record in Argentina: Hiring Through an EOR Guide

With a GDP worth nearly $650 billion, Argentina is the second-largest economy in South America. This country’s booming economy is partly due to its stable politics and skilled workforce. Argentina is also renowned for its large teams of developers, engineers, designers, and other professional workers. Hence, many foreign companies visit this region to bolster their workforce. As more companies worldwide visit Argentina to supplement their in-house teams, the country’s economy will grow even larger, creating a ripple effect that would develop more local talent. 

If you wish to hire Argentine experts to help you handle your projects, you’ll be expected to set up a legal entity. But it is easier said than done. Many foreign startups lack the resources and documentation to establish their legal entity. So, the next best alternative is to hire through an Employer of Record Argentina (EOR). EORs will handle the recruitment process for you, including the tax, legal, and payroll aspects of employee management. 

Introduction to Employer of Record (EOR) in Argentina

An Employer of Record Argentina is a service provider that hires and pays multiple employees. This service provider is designed to handle multiple human resource processes, including training, onboarding, payroll, taxes, and benefits distribution. The unique selling point of an Employer of Record Argentina is that the service provider will handle all your legal work for you to ensure your compliance with local labor laws and regulations. They make it easier to comply with local laws while ensuring your business runs smoothly. 

Here’s a list of other benefits the EOR offers: 

• Help you issue detailed contracts with clearly stated terms of employment, such as working hours, remuneration, entitlement, payroll policies, etc. 
• Ensure timely payment of all employees. 
• Ensure that all employees are correctly classified. 
• Ensure that all employees are terminated in compliance with Argentine labor laws. 
• Pay all levies and taxes to adapt to frequent changes. 
• Report any tax payments as of when due.

Step-by-Step Guide to Hiring Through an EOR in Argentina

Let’s say you wish to hire your next set of employees through an Argentina Employer or Record; what are the steps to get it done? 

Deciding Between an Argentina EOR and Legal Entity

The first step to hiring through an EOR is to decide whether to establish your own legal entity or rely entirely on these service providers. The decision to create your legal entity or use an employer of record depends on the size of your company and plans to scale. 

The following table analyzes how the benefits and drawbacks of legal entity and employee of record Argentina compare against each other:

Read more: Independent Contractors in Argentina

Choosing the Best EOR for Your Business Needs

The next thing to do is to choose the best EOR that suits your business. There are thousands of service providers in the region, and it can be overwhelming to settle on a choice. Here’s a list of criteria to consider when choosing an employee of record for your business: 

• Global Reach: As a foreign company trying to hire in Argentina, it’s crucial to determine which alternatives were licensed to operate in your country. An employer of record without a license to operate internationally will make your global expansion more challenging. 
• Ownership of a Legal Entity: Employer of records are expected to have their own legal entity, but this isn’t always the case. Certain service providers partner with other local entities to handle legal processes. As a result, employer of records without their own legal entity may take longer to handle your requests and inquiries. 
• Data Protection Measures: To work with an EOR, you’ll need to provide them with several essential details and trust them not to mishandle them. Your preferred employer of record should adopt several measures to protect your data, such as Secure Socket Layer encryption. 
• Presence of Automated Solutions: A good employer of record must also possess automated solutions, such as a website. Employers can use this platform to automate different aspects of the recruitment process, including onboarding, enrollment, and reward distribution. 
• Presence of a Support System: There’s no denying that you may encounter problems during the recruitment process. Your preferred employer of record must have a reliable contact support system with experts on standby to help you. It would help if you also had professionals familiar with the regulations in Argentina and other jurisdictions. 

Onboarding Argentinian Employees Through an EOR

After deciding on an employer of record Argentina, the next thing to do is to provide the service provider with the details required to create a shortlist of candidates for you. Upon deciding the best fit for your in-house team, you’ll need to gather their personal information for registration in the Argentine Ministry of Labor’s Special Payroll Book. These details include: 

• Employees’ full name
• Employees’ date of birth
• Employees’ gross earnings and deductions
• Employees’ National ID number and tax identification number 
• Employees’ marital status
• Employees’ position and department
• Employees’ hire date 

When you’re done confirming the employees to add to your team and gathering their details, the next thing to do is send out an offer letter. While this practice isn’t compulsory in Argentina, this correspondence helps you clearly state the terms of employment. It could also be the start of a successful employment relationship between both parties: 

• Job title, job description, hire date, and details about any probationary period included in the contract. 
• Working hours. 
• Employee remuneration, including salary and other statutory benefits. 
• Terms of termination, any associated benefits, and notice periods
• 13-month salary policy
• Employer contact information 
• Any employment contract clauses, such as non-disclosure, confidentiality, non-compete, etc. 

Managing Payroll with an EOR

After adding new employees to your in-house team and signing employment contracts, the following action is to pay your workers. A reliable EOR will handle all payroll actions on your behalf and even settle payments in the local currency (Argentine Pesos). The EOR will also help with filing and reporting taxes. When hiring through an Employer of Record Argentina, you should expect to make the following payroll deductions: 

• Health insurance 
• Life insurance
• Pension fund system 
• Labor risk insurance
• Occupational disease trust fund (FFEP)

Read more: Payroll Taxes and Expenses in Argentina

How Does a Hiring Agency Recommend Your Business the Right EOR Provider?

There are many reasons to partner with an employer of record to hire your employees. An EOR will help you handle payroll and tax reporting. However, it can be challenging to find a suitable alternative without help. That’s where a hiring agency comes in. 

Globy is a reliable hiring agency that will connect you with a trustworthy EOR. The EOR can serve as your legal entity while ensuring your employees get paid and even files your taxes. We will also connect you with a pool of local talent, simplify your onboarding process, and offer HR support. 

Costs Involved in Hiring Through an EOR

If you wish to hire through an Employer of Record, it’s crucial to find out what it’ll cost your company. However, you’d do well to note that there are two common strategies adopted by these service providers, including: 

• A fixed monthly fee for each employee hired through this process. 
• A percentage of employee payroll after taxes have been deducted. 

Regardless of the pricing structure that applies to your preferred employer of record, it’s worth noting that you may also have to settle specific administrative fees, payment for additional features, onboarding fees, etc., if you’re looking to save money hiring through an EOR, avoid using these service providers for your entire workforce. 

Mandatory Benefits for Argentina Employees

As mentioned, hiring employees through an EOR means letting the service provider handle different aspects of your recruitment process. However, you still need to prepare the right amount of compensation for each employee. According to Argentine labor laws, employees are entitled to the following statutory benefits: 

• Minimum wage 
• Social security benefits include disability, retirement, life insurance, maternity and paternity leave, employment insurance, and childcare benefits. 
• Health insurance
• Annual leave, depending on the duration of service
• Overtime pay 
• 13-month salary
• Sick leave 
• Severance pay
• Public holidays

If you hire employees through an Argentine EOR, you must understand that National and public holidays are mandatory in this region. While certain public holidays may vary based on municipalities and religion, the following are awarded to everyone: 

• Carnival Day
• New Year Day
• Good Friday
• Labor Day
• Memorial Day of Truth and Justice 
• May Revolution Day
• Independence Day
• Flag Day
• Immaculate Conception Day
• Day of National Sovereignty
• Day of Respect for Cultural Diversity
• Christmas 

Employer Costs for Full-time Employees in Argentina

When hiring Argentine full-time employees, employers must stay aware of the payroll contributions they are responsible for. The following table highlights the payroll deductions that must be made after every remuneration: 

Further reading: Hiring Remote Employees in Argentina and Software Developers in Argentina

FAQs

Article author

Vit Koval

Co-founder at Globy

A top Global Hiring voice on LinkedIn, co-founder of Globy, and host of Default Global. Using deep expertise in global hiring, remote work, and global business expansion to help companies excel worldwide with innovative strategies.