Argentina Global Payroll & Tax Information Guide

May 16, 2022 | 5 Mins Yana Todorova

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Payroll in Argentina – 2022 Updates

Argentina’s monthly minimum wage is to increase four times in the rest of 2022, starting April 1.

Basic Facts about Payroll in Argentina

Argentina is one of several countries on the continent that pays 13-month salaries for the benefit of employees. Taxes are withheld monthly, as well as social security (health insurance and pension). The taxable period for legal entities is the fiscal year, which may be the calendar year or another period that covers 12 consecutive months.

Taxes

Incomes and cost of living are notably low in Argentina. Employees pay an income tax, as well as social security that includes a state-managed pension fund and health insurance.  There are no payroll taxes in Argentina.

Rates and Thresholds

Income taxes begin from 5% to 35% for individuals resident in Argentina. They are taxed on their worldwide income and may obtain a foreign tax credit for taxes paid on income from foreign sources.

Non-residents and foreign beneficiaries are only taxable on their Argentine-source income.

Both are taxed at progressive income tax rates; however, special tax rates are applicable in case of gains derived from securities (including dividends), interest, and real property.

For more information, see the tax rate chart below.

How Withholding Works

These taxes are typically withheld mid-month from an employee’s paycheck, which may be distributed on either a monthly or weekly basis. There are no payroll taxes. Also, employers contribute toward the government’s social security program.

Returns and Tax Credits

If an employee still owes taxes at the end of the year, they must pay it by June 15 of the following tax year.

2020 Tax Rate Chart

Residents and non-residents are taxed at progressive income tax rates ranging from 5% to 35%.

 
Income Range (ARS)
Income Tax Rate (%)
 

0 – 64,532.64

5%

 

64,532.64 – 129,065.29

3,226.63 on 64,532.64 / 9% on excess

 

129,065.29 – 193,597.29

9,034.57 on 129,065.29 / 12% on excess

 

193,597.29 – 258,130.58

16,778.49 on 193,597.29 / 15% on excess

 

258,130.58 – 387,195.86

26.458.39 on 258,130.58 / 19% on excess

 

387,195.86 – 516,261.14

50,980.79 on 387,195.86 / 23% on excess

 

516,261.14 – 774,391.71

80,665.80 on 516,261.14 / 27% on excess

 

774,391.71 – 1,032,522.30

150,361.06 on 774,391.71 / 31% on excess

 

1,032,522.30 +

230,381.54 on 1,032,522.30 / 35% on excess

*Chart above does not include social security contributions or the 0.5% wealth tax.

Social Security Tax

In Argentina, the Social Security Rate is a tax related with labor income charged to both companies and employees. Effective from 1 March 2022, Argentina has set the minimum and maximum basis for social security contributions to monthly salary of ARS 10,989.91 and ARS 357,166.98, respectively. The minimum and maximum basis amounts apply in relation to the employee portion of social security contributions, which combined amount to 17%. Employer contributions are 25.50%.

Gross Income Tax

This is a provincial tax applicable to self-employed individuals on gross earnings. The average tax rate is 4%.

Foreign Beneficiary Tax

Foreign beneficiaries working temporary in Argentina for no more than 6 months during the year and who earn income through either the visual or performing arts or other profession, are subject to income tax on these earnings ta a rate of 24.5% to be withheld by the local payer.

Corporate Tax

Since 1 January 2021 the corporate income is subject to tax at progressive rates ranging from 25% to 35% as follows:

      • Taxable income from ARS 0 – ARS 5 million: 25%

      • Taxable income from ARS 5 million – ARS 50 million: ARS 1,250,000 + 30% on the amount that exceeds ARS 5 million

      • Taxable income from 50 million: ARS 14,750,000 + 35% on the amount exceeds ARS 50 million.
VAT

The standard VAT rate is 21%. There is also a special high rate of 27% applied to telecoms, domestic gas supplies, water, and industrial energy users. A reduced rate of 10.5% is applicable to a range of goods and services such as the provision of meat, fruit and vegetables, agricultural services, passenger transport, residential housing construction, certain medical services, books, newspapers and periodicals. There are exemptions in certain circumstances such as residential housing/farm leasing, passenger transport, medical services, education, public entity services and water, bread and milk.

Compensation and Benefits

Like many South American countries, employees are paid salaries based on 13 months. Employers pay half the 13-month’s salary in the middle of the year and the other half at the end.

Employees who work on a monthly basis are paid monthly with payment due within 4 days of the following month. Hourly employees get paid either weekly or every 2 weeks.

Minimum Wage

Since April 2022, the national minimum wage in Argentina remained fixed at €425.1 per month, that is 5,101 euros per year, considering 12 payments per year.

Overtime

In general, employers can only require workers to work up to three hours more in a workday as overtime, up to a maximum of 36 hours overtime in any single month. The hourly rate of pay for overtime work on weekdays is 150% of base pay, rising to 200% on weekends and 300% premium on a holiday.

Hours of Work

Regular daytime hours are no more than 48 hours/week (before that employee receives overtime), 8 hours/day. Night shift workers are limited to 42 hours/week before overtime, and those working under dangerous conditions are limited to 36 hours/week.

Holidays

Paid vacation entitlements begin for employees that have worked for their employer a minimum of 6 months. For tenure under 5 years, employers are granted a minimum of 2 weeks. This period increases after 5 years to 3 weeks and then again after 10 years to 4 weeks.

Maternity leave is 90 days (45 days before birth and 45 days after). There are 18 public holidays in Argentina.

Year End Tax Filing

Employees must file their taxes by June 15 the following year. If they still owe taxes after withheld income during the year, they must remit payment when they file their return or risk heavy penalties and interest rates.

Foreign Hires

While Argentina usually approves work visas liberally, the process for a work visa is complicated. Experts recommend that foreign workers begin working with their new employers for a work visa at least a month and a half before arriving in the country. Along with standard identity verification documents, foreign workers must present a PIM (entry permit), along with a police record and a hiring contract from the employer.

 

For more information about how our Global Payroll Control Platform integrates with local payroll providers in Argentina, contact us today.

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