Hiring your first employee: what changes

Going from working alone to having an employee is a big — and administrative — step. You become an employer, and that brings new obligations to the BPS and to the worker. Here's the essentials so you don't start on the wrong foot.

From “no dependents” to employer

Your business becomes one “with dependents”. You must register the Salary-Council group and subgroup that applies to you and run everything through the BPS online services (you need a user). It isn't optional: it's the basis for declaring and paying correctly.

Your monthly duties

As an employer, two things are key: registering the worker and declaring payroll each month. The BPS puts it like this:

On registering the worker, the BPS states:

«Registrar el ingreso del trabajador (alta), el egreso (baja) y las posibles modificaciones (por ejemplo el código de seguro de salud o vínculo funcional), a través de afiliación de trabajadores (GAFI).»

In English: Register the worker's entry (alta), exit (baja) and possible modifications (e.g. the health-insurance code or functional link) through worker affiliation (GAFI).

And on the monthly declaration:

«Enviar la declaración (nómina) de los servicios y remuneraciones de la totalidad del personal ocupado durante el transcurso del mes de actividad a través de la declaración nominada.»

In English: Send the declaration (payroll) of services and remuneration for all staff employed during the month of activity through the nominalized declaration.

What you pay: employer and worker contributions

On the worker's salary there are personal contributions (which you withhold and remit) and employer contributions (which you pay), plus FONASA and the Labour Reconversion Fund. In plain words: an employee costs quite a bit more than their take-home pay.

Aguinaldo and salario vacacional

It's not just the monthly salary: the worker is also owed aguinaldo (a 13th-salary equivalent) and salario vacacional, plus leave. How they're calculated and when they're paid is in our aguinaldo and salario vacacional post.

What's new, at a glance

In short: hiring makes you an employer, with worker registration, monthly payroll, contributions and aguinaldo. It's a step almost always worth taking with an accountant. Verify the current steps and deadlines with the BPS.