Paraguay Severance Calculator 2026
Last updated: January 2026
The labor settlement (liquidación) in Paraguay for 2026 is calculated according to the Labor Code in guaraníes. Components include: severance (indemnización) of 15 days per year of service for unjust dismissal, advance notice (preaviso) of 30-90 days depending on tenure, proportional vacation (12-30 business days by tenure), and proportional aguinaldo. The daily salary is monthly salary ÷ 30. Preaviso periods: 30 days for under 1 year, 45 days for 1-5 years, 60 days for 5-10 years, and 90 days for 10+ years. In case of voluntary resignation, the worker receives only proportional vacation and aguinaldo. Paraguay's severance formula of 15 days per year is moderate compared to the region.
FAQ
What does a labor settlement include in Paraguay?
A settlement includes: indemnización (15 days/year, dismissal only), preaviso (30-90 days by tenure), proportional vacation (12-30 days by tenure), and proportional aguinaldo. Voluntary resignation excludes indemnización and preaviso.
How is severance calculated in Paraguay?
Severance (indemnización) equals 15 days of salary per year of service for unjust dismissal. The daily salary is monthly salary ÷ 30. Partial years are proportional. There is no maximum cap. Example: ₲3,000,000/month × 5 years = 75 days × (₲3,000,000 ÷ 30) = ₲7,500,000.
What is the preaviso in Paraguay?
Preaviso (advance notice) varies by tenure: under 1 year = 30 days, 1-5 years = 45 days, 5-10 years = 60 days, 10+ years = 90 days. If not given, the employer pays the equivalent salary. Both employer and employee must give preaviso.
How many vacation days are in the settlement?
Paraguay vacation by tenure: 12 business days for 1-5 years, 18 days for 5-10 years, and 30 days for 10+ years. Unused vacation is paid proportionally. Vacation rights begin after 1 year of continuous service.
Is the settlement taxable in Paraguay?
Indemnización (severance) and proportional aguinaldo are exempt from IRP and IPS. Preaviso and vacation compensation are subject to normal tax treatment. The settlement is calculated on the last monthly salary.