Country Spotlight – Payroll in Argentina

Country Spotlight - Argentina

While processing payroll, the structure of the organization is just one of the complexities that need to be considered. With global expansion and an increasingly fragmented workforce, organizations have plenty to ponder while processing payroll.

While there are common challenges that cut across borders, there are certain complexities that are specific to each country. Here are four crucial complexities an organization is likely to encounter while processing payroll in Argentina:

1. Workers’ Union

Payroll processing in Argentina is significantly more complex due to the country’s considerable labor union representation. In Argentina, trade unions impact substantially how employees are paid and treated at work, and some even go so far as to influence how businesses handle payroll. The business must consult with the appropriate union for each new hire whenever they come on board. This is a major stumbling block for companies looking to establish operations in Argentina. Some work unions demand mandatory paperwork that is difficult to comprehend.

2. Government Regulations

Statutory regulations are everywhere, but Argentina’s government regulations are dynamic. The tax regulations change frequently. So much so that there is a need to update employee salaries at least twice a year. The income tax rate in Argentina currently falls between 5% and 35%, but the tax brackets are constantly altered and updated.

3. Economic Situation

The economic situation in Argentina is erratic. The inflation rate has increased from 47.65% in 2018 to 60.68% in 2022. Strained with inflation rates, most work unions demand some extra benefits for their employees. The inflation rates necessitate frequent tax updates that impact the payroll calculations for the nation’s workforce. Bombarding the payroll team with constant updates makes their task arduous.

4. Bureaucracy

Bureaucracy impinges payroll processing in Argentina significantly, especially in terms of international commerce: imports and exports. The Federal Revenue System website only provides access to legal representatives or employees of Argentina-based companies. Governmental websites are also not a reliable source of information; in most instances, they are not updated and don’t provide helpful information. The information on the websites is sometimes available only in the country’s native language, making it difficult for global companies to infer details.

There has been a shift in the workforce in the country. Most 20- to 30-year-olds have started working for global companies because of the exchange rates, and a rising section of the workforce have turned to freelance opportunities.

Are you an organization looking to understand and solve payroll complexities in Argentina? To learn more about payroll challenges in Argentina and curated regional insights, register for the Buenos Aires pitstop of Working Beyond Borders 2022, taking place on July 12. Be a part of our invite-only event that offers insights into the ever-changing payroll landscape in the country.

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