Countries › Paraguay › Guide › 7. Labor and employment

7. Labor and employment: Paraguay

Labor and employment in Paraguay: how a hire is contracted, the probation period, the 48 hour week and overtime premiums, the national minimum wage set by decree, the year end bonus (aguinaldo), paid vacation, employer and worker contributions to the social security institute (IPS), maternity and paternity leave, notice and dismissal indemnity, the ten year job stability rule, union formation and the short claim deadlines, each tied to the official text. For staff moving between Argentina and Paraguay, the Argentine side of labor rules is covered in The Argentine Thread guide.

Investor view. A single labor code with fixed formulas, a low minimum wage by regional standards and indemnity of 15 daily wages per year of service lets employers plan payroll and exit costs with confidence, which supports hiring and growth.

• Employing people in Paraguay: contracts, minimum wage, IPS contributions, leave, dismissal and the ten year stability ruleParaguay's Labor Code of 1993, amended in 1995, gives employers a predictable, formula based regime: written contracts above the minimum wage, probation of up to 60 days, a 48 hour week with a 50 perc
• Employment contracts in Paraguay: who is an employee, written form, fixed term limits, probation and void clausesAny subordinated, paid service is presumed to be an employment contract under the Labor Code, whatever the parties call it, and top executives with real independence are the only clear carve out. Cont
• Working hours, overtime and rest in Paraguay: the 48 hour week, night and holiday premiums and weekly restOrdinary hours are capped at 8 a day and 48 a week for day work, 7 and 42 for night work and 7.5 and 45 for mixed shifts, with a 6 hour day for unhealthy work paid as a full day. Overtime is limited t
• Minimum wage in Paraguay: PYG 3,044,000 from 1 July 2026, how it is set and the sector minimumsThe general minimum wage for unspecified activities is PYG 3,044,000 a month (about US$519) and PYG 117,077 a day for day laborers from 1 July 2026, after a 5 percent rise set by Decreto Nº 6225/2026.
• Aguinaldo, vacation and leave in Paraguay: the 13th month, 12 to 30 business days of vacation, maternity, paternity and family allowanceEvery worker earns an aguinaldo of one twelfth of all pay in the calendar year, due before 31 December, and paid vacation of 12, 18 or 30 business days depending on seniority, paid in advance and doub
• Social security in Paraguay (IPS): 9 plus 16.5 percent contributions, health and sickness benefits and pensions after the 2024 reformPrivate sector employees must be registered with the Instituto de Previsión Social (IPS) from their first day, and contributions total 25.5 percent of salary: 9 percent withheld from the worker and 16
• Dismissal and severance in Paraguay: notice, 15 days' pay per year, just causes, closures and the ten year stability ruleAn indefinite contract can be ended without cause by giving 30 to 90 days' notice (or paying it) plus an indemnity of 15 daily wages per year of service or fraction over six months, with no cap. Dismi
• Unions, collective bargaining, internal work rules and strikes in ParaguayWorkers and employers may form unions without prior authorization: a company union needs 20 founders, a trade union 30 and an industry union 300, and registration becomes final if no objection is rais
• Outsourcing, contractors and labor intermediaries in Paraguay: when the client is the employerParaguay has no dedicated outsourcing statute: the Labor Code decides by substance. A labor intermediary that hires people to work for a client, using the client's premises or equipment in the client'
• Labor inspections, fines and claims in Paraguay: fines in minimum daily wages, the 48 hour discount and the 60 day and one year deadlinesLabor fines are set in minimum daily wages (jornales) of PYG 117,077 each from 1 July 2026, usually per worker affected and doubled for repeat offences: 10 to 30 jornales for general breaches, 30 for
• Part time work, telework and domestic work in Paraguay: the special regimesPart time contracts under Ley 6339/2019 cover 16 to 32 hours a week, must be written, cannot impose exclusivity and pay at least PYG 14,635 an hour by day from 1 July 2026, with full IPS cover on actu

Related: Paraguay country profile · live dashboard · central bank and release calendar · our posts on X