Employer of Record in Bolivia: how to hire compliantly without an entity.
Employ full-time employees in Bolivia without setting up an entity. Locally compliant contracts, monthly payroll, statutory benefits, taxes. Below: what the law actually requires, in plain English.
- Country
- Bolivia
- ISO code
- BO
- Region
- South America
- Phone code
- +591
- Employ Latam coverage
- Full EOR + contractor payments
Last updated July 2026
Overview
Bolivia sits in the heart of South America with a population of around 12 million. It is one of the more regulated labor markets in the region, with the General Labour Law (Ley General de Trabajo) setting the baseline for contracts, benefits, and termination across most of the private sector. If you want to hire someone in Bolivia, you either set up a local legal entity or use an employer of record to employ the worker on your behalf.
The currency is the Boliviano (BOB). Payroll runs monthly. Employers must handle statutory social security contributions and ensure salaries meet or exceed the national minimum wage, which the government adjusts annually.
Fixed-term contracts exist but are tightly restricted. They require Ministry of Labor approval and cannot exceed one year. Without that approval, the contract is automatically treated as indefinite. In practice, indefinite contracts with a 90-day probation period are the standard arrangement for most hires.
Bolivia does not have a severance fund structure comparable to Brazil's FGTS, but termination outside the probation period on an indefinite contract requires legitimate grounds. Employers cannot simply end an indefinite contract at will once the trial period closes.
Country at a glance
| Detail | Bolivia |
|---|---|
| Currency | Boliviano (BOB) |
| Working week | Monday to Friday (Saturday in some sectors) |
| Standard workday | 8 hours (48-hour maximum working week) |
| Probation period | 90 days (indefinite contracts) |
| Notice period | Not statutorily fixed; varies by contract and grounds for termination |
| 13th-month salary | Yes, aguinaldo paid in December |
| Payroll cycle | Monthly |
For foreign nationals, Bolivia does have work-permit categories including subject-to-contract visas and temporary visas, but the process involves coordination with immigration authorities and adds lead time to any hire. If you are hiring a Bolivian national, that complexity does not apply.
Employ Latam issues a locally compliant employment contract, handles statutory contributions, and runs payroll in Bolivianos. Onboarding is live in 72 hours for most roles. Pricing starts from $349 per employee per month, depending on country and team size.
Employment contracts and worker types
Bolivia's General Labour Law (Ley General de Trabajo) governs all employment relationships. Getting the contract type right matters from day one: the wrong classification, or a fixed-term contract without Ministry of Labor approval, converts automatically to an indefinite arrangement with full protections attached.
Contract types at a glance
| Contract type | Typical use | Max duration | Probation allowed |
|---|---|---|---|
| Indefinite | Standard ongoing employment | No limit | 90 days |
| Fixed-term | Temporary absences, non-core tasks, workload surges | 1 year | No separate probation period |
| Training/apprenticeship | Young workers aged 16-25 combining work and formal training | 1-3 years | No |
| Internship | Degree-related professional practice | Not specified | No |
Indefinite contracts
This is the default and most common arrangement. There is no end date, and termination outside the 90-day trial period requires either mutual agreement or clear contractual grounds (resignation, serious misconduct). During the trial period, either party can walk away without compensation.
Fixed-term contracts
Fixed-term contracts are restricted, not routine. You can only use them to cover a specific temporary need: filling in for someone on maternity or long-term sick leave, supporting non-core company activities, or managing a short-term workload spike. Key rules:
- Must be in writing, with the duration stated clearly
- Cannot exceed one year
- Require Ministry of Labor approval to be valid; without it, the contract is treated as indefinite
- Cannot be renewed consecutively; a third fixed-term contract automatically becomes indefinite
Training and apprenticeship contracts
These are designed for workers aged 16-25 entering the labor market. The contract runs between one and three years and must pay at least a proportional share of the minimum wage based on actual hours worked.
Contract formalities
All contracts must be:
- Drafted in Spanish
- Submitted to the Ministry of Labor for approval
- Written (verbal contracts are technically binding but hard to enforce and offer little protection)
Required elements include party names, employee personal data, job description, duration, pay details, work location, and the employee's designated heir(s). Any change to salary, duties, or hours requires written mutual agreement.
Contractor vs. employee
Bolivia does not have a light-touch independent contractor framework equivalent to some other LATAM markets. Misclassifying an employee as a contractor exposes you to back-payment of contributions and conversion to indefinite employment status. If the work is ongoing, integrated into your operations, and directed by you, it is almost certainly an employment relationship under Bolivian law.
Payroll, taxes, and the 13th-month salary
Bolivia runs payroll in bolivianos (BOB). Salaries are paid monthly, and employers must stay at or above the national minimum wage, which is adjusted each year by government decree. The 2024 minimum wage sits at BOB 2,362 per month.
Statutory contributions
Bolivia's social security system splits contributions across several funds. The main ones are the pension system (AFP), health insurance (CNS or equivalent), and a housing fund (PVS). Employers also pay into a professional risk insurance scheme.
| Contribution | Employer rate | Employee rate |
|---|---|---|
| Long-term pension (AFP) | 0% | 10% |
| Solidarity pension fund | 0% | 0.5% |
| Common risk insurance (AFP admin fee) | 0% | 0.5% |
| Professional risk insurance | 1.71% | 0% |
| Short-term health (CNS) | 10% | 0% |
| Housing fund (PVS) | 2% | 0% |
| Total | ~13.71% | ~11% |
The employee-side deductions are withheld from gross salary and remitted by the employer. The employer-side contributions are a cost on top of gross salary.
Income tax (RC-IVA)
Bolivia does not use a traditional PAYE income tax. Instead, employees pay a complementary tax called RC-IVA at a flat 13% on taxable income. Employees can offset this liability with VAT receipts for personal purchases. In practice, many employees reduce their RC-IVA to near zero through receipt credits. The employer withholds and remits whatever net amount remains after the employee submits receipts each month.
The aguinaldo (13th-month salary)
Bolivia's aguinaldo is a mandatory 13th-month payment equal to one full month's salary. It must be paid by 20 December each year. Employees who have not completed a full year receive a proportional amount based on months worked. The aguinaldo is not subject to social security contributions, but it is included in the base for certain severance calculations.
When company profits exceed a threshold set by the government, a 14th-month payment (second aguinaldo) can also be triggered. This has been applied in several recent years by executive decree, so budget for it as a possibility.
Key payroll dates
- Monthly salary: paid by the last working day of each month.
- Aguinaldo: paid by 20 December.
- Annual salary adjustment: applied after the minimum wage decree, typically in May.
Mandatory benefits, vacation, and parental leave
Bolivia's labor framework is built on the General Labour Law (Ley General de Trabajo). As an employer, you must provide a defined set of statutory benefits from day one. Missing any of them creates compliance exposure and can complicate termination later.
Leave entitlements
| Leave type | Entitlement | Paid by |
|---|---|---|
| Annual leave | 15 days after 1 year; 20 days after 5 years; 30 days after 10 years | Employer |
| Sick leave | Up to 52 weeks (first 3 days by employer, remainder via social security) | Employer then social security (CNS) |
| Maternity leave | 90 days total: 45 days pre-birth, 45 days post-birth | Social security (CNS) |
| Paternity leave | 3 days | Employer |
| Public holidays | 12 national public holidays per year, plus regional holidays that vary by department | Employer |
A few details worth flagging:
- Aguinaldo (13th-month salary). Bolivia requires a Christmas bonus equal to one month's salary, paid by the end of November each year. Employees who have not completed a full year receive a prorated amount. A second bonus (the "Segundo Aguinaldo") has been mandated in years when GDP growth exceeds 4.5%, though this is assessed annually by the government.
- Maternity protections. A pregnant employee cannot be dismissed from the time pregnancy is confirmed until one year after birth. Violating this rule triggers mandatory reinstatement and back pay.
- Nursing breaks. Mothers are entitled to two 30-minute nursing breaks per day for up to one year after birth, counted as paid working time.
- Social security (CNS) registration. Every employee must be enrolled in the Caja Nacional de Salud from the first day of work. This covers medical care and funds the maternity and extended sick-leave payments listed above.
What this means operationally
When you hire through Employ Latam, we enroll your employee in the CNS, calculate and remit the aguinaldo on schedule, apply the correct vacation accrual tier, and track public holidays by department. Payroll runs in bolivianos. You do not need to monitor the government's annual GDP announcement to know whether the second aguinaldo applies; we flag it and handle the calculation.
Pricing starts from $349 per employee per month, depending on country and team size.
Severance, termination, and notice periods
Bolivia's General Labour Law (Ley General de Trabajo) gives employees strong protections once they pass the trial period. Getting termination wrong is expensive. Here is what you need to know before you make a move.
Trial period
Every indefinite contract includes a mandatory 90-day trial period. During those 90 days, either party can end the relationship without severance or formal notice. After day 90, the full rules apply.
Notice periods
Bolivian law does not prescribe a fixed statutory notice period the way some LATAM countries do. In practice, employers terminating without cause are expected to provide advance notice or pay in lieu. The stronger protection for employees comes through severance, not notice length.
Severance: termination without cause
Bolivia calculates severance (desahucio) based on the employee's tenure. A separate concept, indemnización, may also apply depending on circumstances. The table below covers the core desahucio entitlement for termination without justified cause outside the trial period.
| Tenure | Notice period | Severance owed (without cause) |
|---|---|---|
| Under 90 days (trial) | None required | None |
| 90 days to under 1 year | 30 days (or pay in lieu) | Proportional to months worked |
| 1 to 3 years | 30 days (or pay in lieu) | 3 months' salary |
| 3 to 5 years | 30 days (or pay in lieu) | 6 months' salary |
| 5 years or more | 30 days (or pay in lieu) | 6 months' salary plus additional indemnización accruing at 1 month per year of service beyond 5 years |
Severance is calculated on the employee's last average salary, including regular bonuses and allowances. Bolivia also requires payment of a Christmas bonus (aguinaldo) equivalent to one month's salary, paid each December. If termination happens mid-year, the proportional aguinaldo is owed at exit.
Termination for cause
Serious misconduct (theft, repeated insubordination, abandonment) can justify termination without severance. The bar is high. You need documented evidence and, in most cases, prior notification to the Ministry of Labor. Skipping that step often converts a for-cause dismissal into a without-cause one, triggering full severance liability.
What gets paid at exit
When an employee leaves for any reason, you owe:
- Accrued salary through the last day worked
- Proportional aguinaldo (if not yet paid for the calendar year)
- Accrued vacation pay
- Severance (desahucio and indemnización) if applicable
Delays in final payment can result in additional penalties under Bolivian labor rules.
Recent regulatory changes
Bolivia's labor framework is anchored in the General Labour Law (Ley General de Trabajo), which has been in place for decades. The core rules around contracts, minimum wage, and social contributions are stable, but employers should track annual minimum wage adjustments and any Ministry of Labor directives, both of which can affect payroll calculations from one year to the next.
One consistent pattern: Bolivia sets a new national minimum wage each May, tied to prior-year economic conditions. Missing an update means running non-compliant payroll immediately.
Changes in the past 24 months
| Date | Change | Impact on employers |
|---|---|---|
| May 2024 | National minimum wage increased to BOB 2,362/month (approximately USD 341) | All employment contracts must reflect the new floor; payroll must be recalculated from the effective date |
| May 2023 | National minimum wage increased to BOB 2,250/month from BOB 2,164 | Employers with workers at or near the prior minimum needed to adjust payroll and recalculate proportional benefits tied to salary base |
| Ongoing 2023-2025 | Ministry of Labor continued enforcement of mandatory contract registration; fixed-term contracts without Ministry approval treated as indefinite by default | Any unregistered fixed-term contract carries the legal weight of an indefinite contract, including full termination protections |
Beyond the table above, two structural rules remain active and frequently catch foreign employers off guard:
- Aguinaldo (Christmas bonus): Bolivian law requires a mandatory 13th-month salary payment in December, equivalent to one month's salary. Employers who miss the December deadline face penalties.
- Second aguinaldo (Bono Doble Aguinaldo): When GDP growth exceeds 4.5%, the government can mandate a second annual bonus. This has been applied in prior years and can be triggered again if growth thresholds are met. Employers need to budget for this contingency.
- Annual salary review: Beyond the minimum wage floor, employers are required to apply compulsory minimum increases based on the prior year's payroll. The exact percentage is set by government decree each May.
No major structural reforms to Bolivia's General Labour Law have been enacted in the past 24 months. The framework governing indefinite contracts, the 90-day trial period, fixed-term restrictions, and social security contributions remains unchanged.
For companies hiring through an EOR, these updates are handled automatically. Payroll adjusts when decrees publish, contracts register correctly with the Ministry of Labor, and bonus obligations run on schedule.
Frequently asked questions
- Do I need a local entity to hire someone in Bolivia?
- No. You can hire in Bolivia without setting up a local company by using an employer of record. The EOR becomes the legal employer on paper, handles the contract, payroll, and statutory contributions, and you manage the work directly. This avoids the cost and time of incorporating a Bolivian entity, which can take several months.
- What is the most common employment contract in Bolivia?
- The indefinite contract is the standard arrangement for most hires in Bolivia. It has no end date, includes a 90-day trial period during which either party can exit without compensation, and carries full statutory protections after that window closes. Fixed-term contracts are available but restricted to specific temporary situations and require Ministry of Labor approval to be legally valid.
- What is the total employer cost on top of gross salary in Bolivia?
- The mandatory employer contributions add roughly 13.71% on top of gross salary, covering short-term health insurance (10%), the housing fund (2%), and professional risk insurance (1.71%). Add the aguinaldo (one month's salary divided across the year) and you are looking at a total employer cost of approximately 22 to 24% above gross, depending on role and any agreed benefits. Employ Latam handles all contribution calculations, filings, and remittances so nothing falls through the cracks.
- How long is paid maternity leave in Bolivia?
- Maternity leave in Bolivia is 90 days total, split as 45 days before the expected birth date and 45 days after. Payments during this period are funded through the Caja Nacional de Salud (CNS), not directly by the employer, provided the employee is properly enrolled in social security. The employee also cannot be dismissed from the point pregnancy is confirmed until one year after the birth.
- How much severance is owed for terminating an employee without cause in Bolivia?
- The amount depends on tenure. Employees with one to five years of service are owed between three and six months of salary. Beyond five years, an additional month of salary per year of service accrues on top of the base six months. All calculations use the employee's last average salary, including regular bonuses, so the real cost is often higher than a base-salary estimate suggests.
- What happens if Bolivia's government declares a second aguinaldo (Bono Doble Aguinaldo) in a given year?
- When GDP growth hits the statutory threshold (4.5%), the government issues a decree requiring employers to pay a second full month's salary on top of the standard December aguinaldo. The obligation applies to all private-sector employers, and the payment window is typically short once the decree publishes. Building a contingency line in your annual labor budget is the practical way to handle this, since the trigger is outside your control.
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