• Foreign nationals intending to work in Paraguay must hold an appropriate immigration status allowing them to undertake employment or other lawful activities.
• Temporary Residence: Foreign nationals can obtain temporary residence for up to two years, renewable for an equivalent period. Temporary residents are permitted to work during the validity of their status. 
• MERCOSUR Residence: Nationals of Argentina, Brazil, Uruguay, Bolivia, Chile, Peru, Colombia and Ecuador may apply for MERCOSUR temporary residence, which is valid for two years and is not renewable under the same category. 
• Employment Documentation: Employees applying for residence as workers may need to provide documentation confirming their profession, occupation or employment in Paraguay.
• Permanent Residence: Foreign nationals can generally apply to change from temporary to permanent residence after meeting the applicable residence requirements. Current immigration rules require the application to be made within the prescribed period before expiry of the temporary residence.

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• Payroll Frequency: Payroll is generally processed monthly, with employers responsible for calculating salaries, employee deductions, employer contributions and applicable tax obligations.
• Income Components: Salary, overtime, commissions, bonuses and other normal remuneration may form part of the salary base for social security purposes. The IPS specifically excludes statutory aguinaldo and family allowances from the salary base. 
• Social Security Contributions:
  Employer: 16.5%
  Employee: 9.0%
  Total: 25.5% 
• Employer Obligations: Employers are responsible for withholding the employee's IPS contribution and transferring it together with the employer contribution to IPS.
• Minimum Wage: From 1 July 2026, the national monthly minimum wage for general private-sector activities is Gs. 3,044,000, following a 5% adjustment. The minimum daily wage is Gs. 117,077. 
• Aguinaldo: Employees are entitled to an annual bonus equivalent to one-twelfth of remuneration earned during the calendar year, generally paid before 31 December. A proportional amount is payable when employment ends during the year.

• Contract Types: Employment contracts may be indefinite, fixed-term or for a specific undertaking, subject to the requirements of Paraguayan labour law.
• Probation: Up to 30 days for unqualified workers and up to 60 days for qualified workers or apprentices. A different period may be agreed for highly specialised technical workers. Working Hours: The standard maximum is 8 hours per day or 48 hours per week for daytime work. Night work is generally limited to 7 hours per day or 42 hours per week. Overtime: Overtime is generally limited to three hours per day and is paid at a premium of at least 50%. Night overtime and work on public holidays are subject to higher premiums. 
• Notice Periods: After probation, employer notice is generally 30 days for up to one year's service, 45 days for more than one to five years, 60 days for more than five to ten years and 90 days for more than ten years.
• Termination: Employment may be terminated for legally recognised causes or without just cause, subject to applicable notice and compensation requirements.
• Severance: Dismissal without justified cause generally requires compensation equivalent to 15 days' wages for each year of service, or fraction exceeding six months, in addition to any applicable notice compensation.

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• Annual Leave: Paid annual leave begins after one year of service. Employees receive 12 working days for up to five years of service, 18 working days for more than five and up to ten years, and 30 working days for more than ten years.
• Sick Leave: Employees covered by IPS receive social security benefits for temporary incapacity. IPS currently states that sickness benefits are generally paid at 50% of the average of the previous four months of contributions, subject to the applicable requirements. 
• Maternity Leave: Maternity leave is 18 continuous weeks. The employee may take up to two weeks before the expected birth, with the remaining period taken after birth. Longer leave may apply in certain circumstances, including premature birth or multiple births. 
• Paternity Leave: Fathers are entitled to two weeks of paid paternity leave following the birth, with the cost borne by the employer.
• Adoption Leave: Adoption leave is available under the maternity and family protection framework, with the statutory period depending on the age of the child at adoption.
• Lactation: Statutory breastfeeding and lactation protections apply following maternity leave.
• Public Holidays: Employees are entitled to statutory public holidays, with premium pay requirements applying where employees work on applicable holidays.
• Social Security: IPS provides coverage including healthcare and retirement benefits. The general contribution rate is 25.5% of the applicable salary base.

• Tax Residency: Paraguay's personal income tax applies to individuals who are tax residents and earn Paraguayan-source personal service income. Paraguayan-source income includes remuneration from dependent employment performed in Paraguay. 
• Personal Income Tax: Paraguay's Personal Income Tax (IRP) applies to income from personal services, including salaries and other employment remuneration.
• Tax Threshold: Individuals become subject to IRP on personal-service income once annual gross taxable income exceeds Gs. 80,000,000. Individuals below this threshold are not required to pay the tax, although formal obligations may still apply. 
• Tax Rates: Personal-service income is subject to progressive rates of 8%, 9% and 10%, depending on net taxable income. 
• Tax Year: January 1 – December 31.
• Tax Returns: IRP is an annual tax, with the tax authority indicating March as the annual filing/payment period. 
• Non-Residents: Non-residents receiving Paraguayan-source income may be subject to the separate non-resident income tax regime.