Country Guide
Capital City
Canberra
Languages
English
Currency
Australian dollar ($, AUD)
Population Size
25,771,300
Employer Taxes
18.45%
Employee Costs
2%
Payroll Frequency
Monthly
International expansion is an open door of business opportunities. However, the process of hiring and managing a team abroad can be challenging. As a result, many international companies now prefer to partner with an Employer of Record in Paraguay when entering the market.
Employer of Record (EOR) services like INS Global streamline the process of setting up a team in Paraguay by taking care of various legal and administrative needs, such as hiring, onboarding, tax and payroll management, worker benefit administration, and regulatory compliance.
An EOR partner becomes fully liable for the legal and administrative responsibilities relating to your operations. Such partnerships allow you time and resources for developing and executing result-altering business strategies.
We’ve assisted numerous companies from various industries quickly and effectively realize their dreams of international in over 160 countries.
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Company incorporation is a common procedure your business might follow when expanding. However, it comes with a lot of risks that your business may find hard to manage. Choosing an EOR, on the other hand, helps mitigate the risks of expansion.
An EOR can help your business with important tasks like:
The Advantage in Figures
PEO/EOR
Company Incorporation
Price
80% Less Expensive
Market Entry
2-5 Days
6 Months
Assured Legal Compliance
Many international businesses seeking to break into a new market are unfamiliar with the labor laws or regulatory needs in Paraguay. EOR services, however, help can you avoid lawsuits and penalties resulting from employee claims or non-compliance with tax and labor laws.
Reduced Cost And Time
International expansion is typically expensive and time-consuming for businesses. However, with a reliable partner you can quickly settle into a new environment on time.
Focus Solely on Company Expansion
Outsource HR-related services and focus on your business expansion when you partner with an EOR in Paraguay.
Mitigate Risks
An EOR partner ensures you comply with every tax and labor law. This approach eliminates the risks of penalties or lawsuits due to employee claims or non-compliance.
One Platform For Everything
An EOR partner like INS Global can help you with business expansion needs in over 160 countries in the world. This singular expansion platform offers convenience and the integration of numerous HR services.
How does INS Global EOR manage your outsourcing and business expansion needs in Paraguay? Here is how:
1
We first meet to discuss your hiring and outsourcing requirements so as to develop a custom solution for your needs.
2
Next, we provide your business with a legal entity so you can start hiring in Paraguay or dispatch your current workers there.
3
We immediately take on legal and administrative responsibilities for your employees and manage your payroll.
4
You manage and supervise your employee’s everyday contributions in Paraguay while we take care of administrative tasks.
A Professional Employer Organization (PEO) in Paraguay shares similarities with an Employer of Record provider. In fact, most EOR services also offer PEO solutions. Still, both services retain crucial differences, as described below:
Professional Employer Organization (PEO) | Employer of Record (EOR) |
A PEO is responsible for your HR functions, including payroll management, tax, and legal regulation compliance for employees of other companies. | An EOR company becomes the legal employer for employees and helps other companies to hire employees and oversee HR-related tasks. |
PEO is only partially responsible for some employment-related liabilities with the client company. | An EOR is solely responsible for employment and recruitment liabilities. |
The employment contract is between the client and its employee. | Although the client directs the employment contract, it is made directly between the EOR partner and the employee. |
Check Our Labor Law Guide
Employment contracts in Paraguay are either verbal or written. An employment contract may be verbal for domestic service, temporary work not more than 90 days, or a contract for work not exceeding minimum wage in value. Otherwise, the employment contract should be in writing.
Such contracts should be written in Spanish, with the agreed salary in the local Paraguayan guaraní currency.
There are three models of employment contracts in Paraguay:
The employment contract should contain the following employee and employer details:
The Paraguayan Labour Code allows a probation or trial period in the initial stage of employment. Employers can assess workers’ skills and verify their suitability for the contracted work. The duration of this probationary period is as follows:
The labor law requires an employer or employee to provide a dismissal notice to the other party before terminating the employment contract. Either party may terminate the employment contract through a written notice or equivalent payment in lieu.
This is the required notice period for terminating an indefinite-term contract, depending on the worker’s length of service:
An employer can ask workers to continue working with the same terms and conditions during the notice period but may take up to 2 hours of daily leave during working hours to look for a new job.
In case of dismissal without just cause, the employer must pay an indemnity equal to 15 days’ wages for each year of service.
The Labour Code and other relevant acts mandate severance payment as described below when an indefinite employment contract is terminated by an employee for specific reasons outlined in the law:
Working Hours In Paraguay
The normal working hours in Paraguay are 8 hours a day and 48 hours per week during the daytime.
Night work (work done between 20:00 PM and 06:00 AM of the following day) is paid at 130% of standard wages.
Workers involved in dangerous and hazardous work or work that is carried out in hazardous conditions cannot work for more than 6 hours per day and 36 hours per week.
The total working hours, including overtime, may not exceed 11 hours daily. The maximum overtime hours are 3 hours a day and 9 hours a week.
This limit does not apply to managers, administrators, and workers without direct supervision or workers whose presence alone is required. However, these individuals cannot be required to work more than 12 hours a day and are entitled to a rest break of 1.5 hours.
Overtime workers are entitled to overtime pay at the following rate:
The government fixes a minimum wage rate every 2 years, and no worker in Paraguay can be paid less than this mandatory minimum rate of pay. Currently, Paraguay’s minimum wage is 2,289,324 Paraguayan guaraníes per month.
Public Holidays in Paraguay
Employees in Paraguay are eligible for the following 13 paid public holidays:
Employees working on official holidays are entitled to receive wages at a premium rate of 200% of the normal hourly wage rate.
Annual Leave in Paraguay
An employee is entitled to a paid annual leave as described below:
Sick Leave in Paraguay
Employees with a justified illness may take medical leave at 50% of their salary. Paraguayan employees get 3 days of paid emergency leave for the death of an immediate family member.
Maternity/ Paternity Leave in Paraguay
Maternity leave in Paraguay is provided as follows:
The law provides for 2 weeks of paid paternity leave to male workers on the birth of a child. This leave is paid by the employer.
The social security system in Paraguay is managed by the Instituto de Previsión Social (IPS). The IPS provides social security benefits and services like retirement, healthcare, disability, and unemployment benefits to eligible individuals and their dependents.
Employers are mandated to register their employees in the system. Employers and employees in Paraguay both pay an amount per pay period equivalent to a percentage of the employee’s salary, 16.5%, and 9% respectively.
The income tax is on a Pay As You Earn system, which means that employers are obligated to deduct such taxes before paying salaries.
Income tax and corporate tax are both charged at 10%.
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Employer of Record (EOR) in Australia
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Employer of Record (EOR) in Australia
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solutions
faqs
No, it is necessary to use a local entity abroad to comply with each country labor law.
Foreign companies can either set up a local entity in each country or use the services a local PEO (Professional Employment Organization) to hire the staff on-site directly.
The employer of record is the legal entity liable for the staff employed in a specific country. In practice, a foreign company can either open a subsidiary to become the employer of record of its abroad employees or use a PEO to act as the employer of record.
Liabilities may vary from country to country and include all the staff management responsibilities: labor contract issues, payroll management, and tax compliance, social security management, expenses claim declaration, hiring and termination
procedures, etc.
Typically, it takes one month to have an employee based out abroad using an existing PEO as the Employer of Record. Meanwhile, incorporating a new subsidiary abroad can take from 4-12 months.
The price of professional EOR services in Paraguay is a percentage of the worker’s monthly compensation. This price includes all HR-related tasks that ensure compliance with local employment laws.
Yes. An EOR in Paraguay is a safe, legitimate, and efficient way to handle employer responsibilities without establishing a specific corporate structure. EORs ensure your safety by working with local legal professionals and offering excellent HR assistance.
An EOR service agreement ensures your team members are paid accurately and on time each month. In addition, they have access to all Paraguayan employee benefits, and the law completely protects your operations.
Independent contractors who interact with their clients within an EOR framework in Paraguay will retain full control of their work and may be eligible for regular employee benefits. Hence, partnering with an EOR is like working via an umbrella organization.
Yes. Our team of expert recruitment consultants can find the best local talent in Paraguay for you by utilizing our wide professional networks, in-depth knowledge of regional business resources and benchmarks, and commitment to ethical hiring practices.
Yes. An Employer of Record can help you find workers in various cities or regions in Paraguay. An EOR handles headhunting, interviews, and candidate selection in specific cities or regions in Paraguay, depending on your needs or preference.
You can employ as many or as few employees as you need to achieve your goals. While some PEO or EOR service providers in Paraguay have minimum or maximum hiring requirements, INS Global is aware that your worldwide business strategy might include scaling up or down quickly at any time. As a result, you have freedom when your work with us.
The option for a shared workspace for your employees is a good idea. But using a PEO service in Paraguay eliminates the need for a local address.
Absolutely. We can manage the necessary visa and work permit processes for foreign residents. Also, we can handle situations where the local employment laws, tax laws, or employee benefits differ for natives and foreigners.
EOR and PEO solutions ensure the efficient and secure employment of foreign or local workers for companies of all sizes. In addition, our services are scalable, allowing you to meet employment demands for your work operations.
The legal expertise of PEO and EOR services can help businesses that are without their own structures or those seeking to avoid cost-scaling difficulties during international expansion.
Staffing firms and umbrella corporations are third-party options for hiring independent freelancers in Paraguay, directly or indirectly.
Most independent contractors in Paraguay are self-employed or run small enterprises. According to the country’s law, these contractors should be hired in accordance with a work agreement rather than an employment contract.
Hence, independent contractors in Paraguay can provide a CV, portfolio, verified references, and possibly a signed NDA.
The cost of hiring in Paraguay should factor in expenses like salary, recruiting service fees, signing bonuses, and other direct and indirect expenses, including incentive programs, foreign employee tax management, and social security contribution payments.
Employers in Paraguay manage payroll for all workers, usually at the end of every month. Employers are responsible for monthly withholding amounts corresponding to employees’ income tax and social security fund contributions.
Paraguay’s minimum wage in 2025 is 2,289,324 Paraguayan guaraníes per month. The government fixes a minimum wage rate every 2 years, and no worker in Paraguay can be paid less than this mandatory minimum pay rate.
Several visa types are available for employees wishing to work in the country. The common visa types for employees in Paraguay include:
Employers in Paraguay are responsible for organizing and withholding employees’ income tax payments and social security fund contributions every month. Paraguayan employers contribute an equivalent of 16.5% of an employee’s salary to the country’s social security system. Meanwhile, corporate tax is charged at 10%.
Employees in Paraguay are entitled to a state pension, severance payment, public holidays, paid leave (sick leave, annual leave, and parental leave), and health insurance.
Unilateral changes to an employee’s contract are not permitted in Paraguay. Both parties must agree upon changes to an employee’s working conditions. So working contracts should be in writing, with all amendments signed by the employer and employee.
In addition to public and private healthcare, the Paraguayan Institute of Social Security (Instituto de Previsión Social), IPS, administers the social security healthcare system in the country. The IPS provides healthcare coverage to individuals affiliated with the system, including formal sector employees and their dependents.
The Labour Code in Paraguay mandates severance payment for the termination of an indefinite employment contract for reasons outlined in the law as described below:
The Ministry of Labor, Employment, and Social Security (Ministerio de Trabajo, Empleo y Seguridad Social) is responsible for formulating and enforcing Paraguay’s labor laws, regulations, and policies.
Employees in Paraguay are eligible for 13 paid public holidays.
A Global Employer of Record is an effective solutions for companies like yours that are looking to expand a workforce abroad effortlessly.
This approach allows you to outsource the international hiring process quickly and efficiency, providing access to a global talent pool while still managing payroll compliance in each country.
Public Holidays Calendar
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