Law 20,935 was published in the Official Gazette on June 30 2016 and established a schedule for adjusting the value of minimum wage and family allowance rates every six months from 2016 to 2018.

Minimum wage

As of July 1 2016 the minimum wage rates are as follows:

  • The general rate will be Ps257,500. This amount will increase to:
    • Ps264,000 on January 1 2017;
    • Ps270,000 on July 1 2017; and
    • Ps276,000 on January 1 2018.
  • The minimum wage for employees over 65 years of age or under 18 is Ps192,230. This amount will increase to:
    • Ps197,082 on January 1 2017;
    • Ps201,651 on July 1 2017; and
    • Ps206,041 on January 1 2018.
  • For non-remuneration purposes(1) the minimum wage rate will be Ps166,265. This amount will increase to:
    • Ps170,296 on January 1 2017;
    • Ps174,166 on July 1 2017; and
    • Ps178,037 on January 1 2018.

Family allowance

As of July 1 2016 the family allowance(2) rate is:

  • Ps10,577 per dependant for employees whose monthly income does not exceed Ps270,196;
  • Ps6,491 per dependant for employees whose monthly income is higher than Ps270,196 and does not exceed Ps394,651; and
  • Ps2,052 per dependant for employees whose monthly income is higher than Ps394,651 and does not exceed Ps615,521.

Employees with salaries higher than Ps615,521 are not entitled to the family allowance.

As of January 1 2017 the family allowance rate will be:

  • Ps10,844 per dependant for employees whose monthly income does not exceed Ps277,016;
  • Ps6,655 per dependant for employees whose monthly income is higher than Ps277,016 and does not exceed Ps404,613; and
  • Ps2,104 per dependant for employees whose monthly income is higher than Ps404,613 and does not exceed Ps631,058.

Employees with salaries higher than Ps631,058 will not be entitled to the family allowance.

As of July 1 2017 the family allowance rate will be:

  • Ps11,091 per dependant for employees whose monthly income does not exceed Ps283,312;
  • Ps6,806 per dependant for employees whose monthly income is higher than Ps283,312 and does not exceed Ps413,808; and
  • Ps2,151 per dependant for employees whose monthly income is higher than Ps413,808 and does not exceed Ps645,400.

Employees with salaries higher than Ps645,400 will not be entitled to the family allowance.

Starting from January 1 2018 the family allowance rate will be:

  • Ps11,337 per dependant for employees whose monthly income does not exceed Ps289,608;
  • Ps6,957 per dependant for employees whose monthly income is higher than Ps289,608 and does not exceed Ps423,004; and
  • Ps2,199 per dependant for employees whose monthly income is higher than Ps423,004 and does not exceed Ps659,743.

Employees with salaries higher than Ps659,743 will not be entitled to the family allowance.

For further information on this topic please contact Maria Luz Ríos at Montt y Cia SA by telephone (+56 22 233 8266) or email (mrios@monttcia.cl). The Montt y Cia SA website can be accessed at www.monttcia.cl.

Endnotes

(1) This value is used where the law imposes fines or the obligation to make other payments not related to employment calculated according to the minimum wage rate.

(2) 'Family allowance' is a payment granted by the government to employees that have dependants such as underage children, people suffering from disabilities or older people that do not or cannot work. The payment is made by allowing employers to deduct the allowance from social security contributions payable each month on the salaries of eligible employees.

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