Chile Severance Calculator 2026 — Chile
A Chilean finiquito includes proportional vacation (15 business days/year), pending leave, and — for dismissals due to company needs — severance pay of 1 month per year of service (capped at 11 years) with salary capped at 90 UF (CLP $3,535,241 in April 2026). If the employer didn't give 30 days' notice, a substitute notice payment (1 additional month) is added. For a CLP $1,500,000 salary with 5 years of service dismissed for company needs, the finiquito can exceed CLP $10,000,000. Amounts are calculated per Articles 159-178 of the Chilean Labor Code.
Frequently Asked Questions
What does a Chilean finiquito include?
A Chilean finiquito includes at minimum: proportional vacation (unused leave days), pending wages (salary, overtime, accrued bonuses), and proportional legal bonus. For dismissals due to company needs (Art. 161) or employer dismissal, severance by years of service is added: 1 month's salary per year worked, capped at 11 years and salary capped at 90 UF. If the employer didn't give 30 days' notice, a substitute notice payment equal to 1 month's salary is also required.
How much is the severance by years of service?
Severance by years of service equals 1 month of the last monthly salary per year of service, with two key caps: maximum 11 years for calculation purposes (Art. 163 par. 2), and the monthly salary is capped at 90 UF (approximately CLP $3,535,241 in April 2026). Fractions exceeding 6 months are rounded up to a full year. A minimum of 1 year of continuous service is required. It only applies for dismissal due to company needs, employer dismissal, or court-declared unjustified dismissal.
When is severance by years of service NOT paid?
Severance is not paid in these cases: voluntary resignation (Art. 159 N°2), mutual agreement (Art. 159 N°1), contract expiration (Art. 159 N°4), and dismissal for disciplinary causes under Art. 160 (serious misconduct, incompatible negotiations, job abandonment, etc.). However, if a disciplinary dismissal is declared unjustified by a court, the worker is entitled to severance plus a surcharge of 30% to 80%.
What is the substitute notice payment?
When the employer dismisses a worker without giving 30 days' advance notice, they must pay a substitute notice payment equal to 1 month of the last monthly salary (Art. 162). This payment is also capped at 90 UF. If the employer notifies the worker 30 days before the dismissal date, this additional payment is not required.
Who must witness the finiquito signing in Chile?
A Chilean finiquito must be signed before an authorized witness (ministro de fe) to be fully valid. Authorized witnesses are: the worker's union president, a labor inspector, a public notary, or the civil registry officer of the district. If the finiquito is not signed before an authorized witness, the worker can challenge it. Workers have 60 business days from the separation date to file a claim at the labor court if they believe their rights were not met.