Countries › Paraguay › Guide › 7. Labor and employment › Employment contracts in Paraguay: who is an employee, written form, fixed term limits, probation and void clauses

Employment contracts in Paraguay: who is an employee, written form, fixed term limits, probation and void clauses

Last verified: 2026-10-28 · Status: Stable

Any 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. Contracts paying more than the minimum wage must be in writing; fixed term contracts are the exception, are capped at one year for manual workers and five years for salaried staff, and turn indefinite if the work is permanent. Probation lasts at most 30 days for unskilled staff and 60 days for skilled staff, and clauses that waive legal rights, pay below the minimum or exceed legal hours are void.

USD figures use PYG 5,868.31 per US dollar, the Banco Central del Paraguay reference quotation in the planilla for Wednesday 28 October 2026. Conversions are for orientation only.

Key facts

Written contract required when pay exceeds the legal minimum	yes booleanCódigo del Trabajo art. 43, as of 2026-10-28 · in force
Maximum fixed term for manual workers (obreros)	1 yearsCódigo del Trabajo art. 49, as of 2026-10-28 · in force
Maximum fixed term for salaried employees (empleados)	5 yearsCódigo del Trabajo art. 49, as of 2026-10-28 · in force
Maximum length of casual or temporary work that may be agreed verbally	90 daysCódigo del Trabajo art. 44 b, as of 2026-10-28 · in force
Maximum probation period, skilled workers and apprentices	60 daysCódigo del Trabajo art. 58 b, as of 2026-10-28 · in force
Maximum probation period, unskilled workers	30 daysCódigo del Trabajo art. 58 a, as of 2026-10-28 · in force
Maximum share of pay in kind	30 %Código del Trabajo art. 231, as of 2026-10-28 · in force
Minimum monthly pay, apprentices and dual training, from 1 July 2026	1826400 PYGRes. MTESS 670/2026 art. 3, as of 2026-07-01 · in force

The rule

1. Who is an employee. The Code covers intellectual, manual and technical workers in a dependent relationship and their employers, private school teachers, sports professionals, private sector unions and staff of state owned companies (other public servants have their own law). An employment contract is any agreement under which a worker performs work or a service for an employer under its direction and dependence for pay of any kind, and a contract is presumed between whoever gives work or uses a service and whoever provides it. A worker is always a natural person. Directors, managers, administrators and other executives who represent the company and enjoy notorious independence because of their pay, the nature of their work and technical capacity are outside the Code, but the Code applies whenever subordination predominates. A worker may have two or more employers unless exclusivity was agreed.
Cost to do it: No registration fee: the contract arises from the facts of subordinated work.
Example: A consultant invoicing PYG 9,000,000 a month who works fixed hours at the client's office under a manager's orders can be reclassified as an employee, with IPS contributions and benefits owed from the start. / Same case: about US$1,534 a month treated as salary on reclassification.Ley Nº 213/1993 Código del Trabajo, as amended by Ley Nº 496/1995, Art. 2, 17 and 21 (as amended by Ley 496/1995 art. 1), 19, 22, 23 and 24, 1995-08-22 official text · verified 2026-10-28

2. Written form and contents. A contract may be verbal or written, but must be in writing when the agreed pay is above the legal minimum for the work. Verbal contracts are allowed for casual or temporary work of up to 90 days and for a specific job within the same value limit (the domestic work exception was repealed by Ley 5407/2015). A written contract is signed in one copy per party, its documentation is exempt from all taxes, and either party may ask the Labor Directorate to approve and register it. It must state place and date, the parties' details including nationality, the work and where it is done, the amount, form and period of pay, the length and division of the working day, any housing, food or uniforms supplied and their value, and other agreed terms. Without a written contract the employment relationship alleged by the worker is presumed if there is subordinated work, unless disproved.
Cost to do it: No tax or stamp duty on the contract (art. 45); optional approval and registration with the Labor Directorate.
Example: Hiring an analyst at PYG 9,000,000 a month requires a written contract because pay exceeds the PYG 3,044,000 minimum. / Pay of US$1,534 a month against a minimum of US$519 triggers the written form requirement.Ley Nº 213/1993 Código del Trabajo, Art. 43, 44 (letter a repealed by Ley 5407/2015 art. 26), 45, 46 and 48, 1993-06-29 official text · verified 2026-10-28

3. Duration: indefinite is the rule. By duration a contract is fixed term, indefinite or for a specific work or service; with no stated term it is indefinite or follows custom. A fixed term contract cannot exceed, to the worker's detriment, one year for manual workers (obreros) or five years for salaried employees (empleados), and is extended tacitly if the worker keeps working after expiry without the employer objecting. Contracts for work that is permanent or continuous by nature are deemed indefinite despite a stated term if, on expiry, the cause or the work continues, and seniority counts from the first day of work. Fixed term and specific work contracts are exceptions allowed only where the service or work is accidental or temporary. Unjustified dismissal before the term ends gives damages set by the judge, capped at the pay due until the contract would have ended.
Cost to do it: Early termination of a fixed term contract without cause: up to the remaining salary until the end of the term.
Example: Dismissing a salaried employee on PYG 9,000,000 four months before the end of a one year contract can cost up to PYG 36,000,000. / Up to about US$6,135 in that case.Ley Nº 213/1993 Código del Trabajo, Art. 49, 50 and 83, 1993-06-29 official text · verified 2026-10-28

4. Probation. Every contract starts with a probation period of at most 30 days for unskilled workers (and domestic staff) and 60 days for skilled workers and apprentices; for highly specialized technical workers the parties may agree a different period. Probation is paid as agreed; if neither party ends the contract at its close, it continues and the probation time counts for all purposes. A new contract between the same parties for the same work has no probation. During probation either party may end the contract without liability, but the worker enjoys all benefits except notice and dismissal indemnity.
Cost to do it: Ending during probation costs only days worked plus proportional aguinaldo and vacation, with no notice or indemnity.
Example: An employer ending a skilled hire on day 50 pays the days worked and proportional benefits only. / Same: no severance, only accrued pay.Ley Nº 213/1993 Código del Trabajo, Art. 58, 59 and 60, 1993-06-29 official text · verified 2026-10-28

5. Void clauses and pay rules. Clauses are void even if written into the contract when they set longer hours than the Code allows or inhuman hours, dangerous or unhealthy work for pregnant or breastfeeding women or minors, work for children under twelve, any waiver of legal rights, lower pay for equal work on grounds of age, sex or nationality, overtime for minors, pay below the legal minimum, different times or places of payment than the law sets, obligations to buy in a given shop, or salary deductions as fines. Rights under the Code cannot be waived and better terms granted by the employer prevail. Pay must not discriminate by sex, disability, nationality, religion, social condition or political or union preference, with equal pay for equal work save higher pay based on productivity and merit. Pay is in legal tender, with at most 30 percent in kind; each payment comes with a signed pay slip showing base pay, days or units paid, extras and deductions. The parties may agree profit sharing whatever the pay method.
Cost to do it: No direct cost; void clauses are replaced by the legal minimum.
Example: A contract paying PYG 2,800,000 for full time unspecified work is corrected by law to the PYG 3,044,000 minimum. / About US$477 corrected to US$519.Ley Nº 213/1993 Código del Trabajo, as amended by Ley Nº 496/1995, Art. 3, 5, 47 (letter b as amended by Ley 496/1995 art. 1), 51, 229 (as amended), 231 and 235, 1995-08-22 official text · verified 2026-10-28

6. Apprenticeship contracts. Under an apprenticeship contract the apprentice works for an employer that teaches a profession, art or trade for a set time and pays a salary that may be agreed; where the authority sets an apprentice minimum, the cash amount cannot be below 60 percent of the minimum wage, and training may be at the workplace, in a specialized institution at the employer's expense or under a dual system. From 1 July 2026 the apprentice and dual training minimum is PYG 1,826,400 a month or PYG 70,246 a day.
Cost to do it: Minimum apprentice pay PYG 1,826,400 a month (US$311), plus IPS contributions.
Example: An apprentice on the minimum costs PYG 1,826,400 a month before IPS. / About US$311 a month.Ley Nº 213/1993 Código del Trabajo art. 105 as amended by Ley Nº 496/1995; Resolución MTESS Nº 670/2026, Código del Trabajo art. 105 (Ley 496/1995 art. 1); Res. MTESS 670/2026 art. 3, 2026-07-07 official text · verified 2026-10-28

7. Paraguayans hired to work abroad and local preference. A contract under which Paraguayan workers are hired to serve outside the country must be approved and registered by the labor authority and visaed by the consul of the country of work; the employer must bear transport and food costs of the worker and family and immigration costs, post a bond for repatriation, and the worker must be at least twenty unless hired with an adult relative. Among the employer's duties is to prefer Paraguayan workers, and those who served well before, when circumstances are equal. Employers who moved a worker to take up the job pay the round trip.
Cost to do it: Repatriation bond set by the labor authority for contracts to work abroad; travel costs for relocated staff.
Example: A Paraguayan engineer hired by the local S.A. to work on a project in Brazil needs a contract approved by MTESS and visaed by the Brazilian consul. / Same: costs depend on the bond fixed by MTESS.Ley Nº 213/1993 Código del Trabajo, Art. 56, 57 and 62 letter m, 1993-06-29 official text · verified 2026-10-28

Type	When allowed	Form	Key limit
Indefinite	Default for permanent or continuous work	Written if pay above the minimum	Notice and indemnity on dismissal without cause
Fixed term	Only for accidental or temporary work	Written if pay above the minimum	1 year for manual workers, 5 years for salaried staff; tacit extension if work continues
Specific work or service	Only for a defined job	Written if pay above the minimum; verbal if within the minimum	Ends when the work is completed
Casual or temporary	Up to 90 days	May be verbal	Becomes indefinite if the need is permanent
Apprenticeship	Training in a trade	Written	Cash pay at least 60 percent of the minimum (PYG 1,826,400 from 1 July 2026)
Part time	16 to 32 hours a week	Always written	See Part time, telework and domestic work
Telework	By agreement, reversible	Written description of duties and pay	See Part time, telework and domestic work

Contract types under the Labor Code (art. 43, 44, 49, 50, 58 and 105; Ley 6339/2019 and Ley 6738/2021 for part time and telework; read on 28 October 2026)

Worked example

A Chilean software group sets up a Paraguayan S.A. and hires a developer at PYG 9,000,000 a month (US$1,534). Pay is above the PYG 3,044,000 minimum, so the contract must be written and state the work, place, pay, hours and benefits (Código del Trabajo art. 43 and 46).
The job is permanent, so the contract is indefinite with a 60 day probation for a skilled worker (art. 50 and 58). A one year fixed term label would not work: on expiry the contract would be treated as indefinite with seniority from day one.
On day 45 the developer has performed well; probation ends at day 60 with no action needed and counts towards seniority (art. 59).
The contract allows paying part of the package as a company laptop and lunch, but in kind items cannot exceed 30 percent of pay, PYG 2,700,000 here (US$460) (art. 231).

Step by step

Decide whether the role is employment: if the person works under your direction, on your schedule, with your tools and for regular pay, use an employment contract, not a services invoice (art. 17 and 19).
Choose the contract type: indefinite for permanent roles; fixed term or specific work only for genuinely temporary needs, within the one year or five year caps (art. 49 and 50).
Draft the written contract with the art. 46 contents, the probation period (30 or 60 days) and any exclusivity clause (art. 22 and 58).
Register the worker with IPS from day one and include the worker in the employer's MTESS records (see Social security (IPS)).
Give a signed pay slip with every payment and keep a copy signed by the worker (art. 235).
Optionally file the contract with the Labor Directorate for approval and registration (art. 45).

Common traps

Labels do not decide: a services agreement with fixed hours, supervision and monthly pay is presumed to be employment (art. 19 and 48).
Back to back fixed term contracts for permanent work become one indefinite contract, with seniority from the first day (art. 50).
Only executives with notorious independence fall outside the Code; a manager who is closely supervised is an ordinary employee (art. 23).
The DNIT copy of the Code is the 1993 text; articles 2, 17, 21, 47 and 229, among others, were rewritten by Ley 496/1995, so check the amendment before relying on the wording.
Probation does not apply again when the same parties sign a new contract for the same work (art. 59).

Sources

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