Labor Law in Paraguay: Essential Guide

Published on September 30, 2025 and written by Cyril Jarnias

Paraguay, a South American country experiencing robust economic growth, offers numerous opportunities for businesses and workers. However, to thrive in this emerging market, it’s crucial to thoroughly understand the specificities of Paraguayan labor law. This article provides a comprehensive overview of the main legal provisions governing employment relationships in this country.

Employment Contracts: The Foundation of Every Professional Relationship

In Paraguay, employment contracts are governed by the Labor Code (Law No. 213/93). They can be written or verbal, but a written contract is strongly recommended to avoid any future disputes.

The main types of contracts are:

• Indefinite-term contract: This is the most common form. It has no predetermined end date.
• Fixed-term contract: Limited in duration, it cannot exceed 12 months for unskilled employees and 60 months for skilled employees.
• Apprenticeship contract: Designed for youth aged 14 to 18, it combines practical and theoretical training.
• Part-time contract: The working hours are less than the legal duration (48 hours per week).

Every employment contract must include:

• Identification of the parties
• Nature of the work to be performed
• Workplace location
• Contract duration (if fixed-term)
• Salary and payment terms
• Work schedule

Social Obligations: An Evolving System

The Paraguayan social security system is managed by the Social Security Institute (IPS). All employers and employees are required to register, except for self-employed workers for whom registration is voluntary.

The main social security contributions are:

• Health-maternity insurance: 9% (5.5% employer, 3.5% employee)
• Retirement: 12.5% (8% employer, 4.5% employee)
• Unemployment insurance: 2% (employer only)

These rates apply to the employee’s gross salary, capped at 300 times the minimum daily wage.

Paraguay has recently undertaken a reform of its social security system aimed at improving coverage and financial viability. This reform includes the gradual extension of social coverage to self-employed workers and the progressive increase of the retirement age.

Minimum Wage: A Tool for Worker Protection

In Paraguay, the minimum wage is set by the government based on recommendations from the National Wage Council (CONASAM). It is reviewed at least once a year to account for changes in the cost of living.

As of February 1, 2025, the monthly minimum wage is set at 2,680,000 guaraníes (approximately 370 USD).

This amount applies to a 48-hour work week. For part-time jobs, the minimum wage is calculated proportionally to the number of hours worked.

It’s important to note that certain sectors may have specific minimum wages, generally higher than the national minimum wage.

Average Salaries: A Progressing Labor Market

Although the minimum wage serves as a reference, actual salaries in Paraguay vary considerably depending on the sector, qualification level, and professional experience.

Here are some examples of average monthly salaries (in guaraníes):

• Engineer: 5,500,000 to 8,000,000
• Accountant: 4,000,000 to 6,000,000
• Teacher: 3,500,000 to 5,000,000
• Skilled worker: 3,000,000 to 4,500,000
• Office employee: 2,800,000 to 4,000,000

It should be noted that these figures are averages and can vary significantly by region, company size, and industry sector.

Salary Skills: A Market Seeking Talent

The Paraguayan labor market is characterized by growing demand for skilled workers, particularly in the following sectors:

• Information and communication technologies
• Engineering and construction
• Agribusiness
• Financial services
• Tourism

This demand translates into higher salaries for professionals with sought-after skills. Employees proficient in English or other foreign languages are particularly valued.

The Paraguayan government has implemented several vocational training programs to meet this growing demand for skills, particularly through the National Vocational Promotion Service (SNPP).

Unions: Key Players in Social Dialogue

Union rights are recognized by the Paraguayan Constitution and Labor Code. Workers have the right to form unions without prior authorization.

The main unions in Paraguay are:

• Unified Workers’ Central (CUT)
• National Workers’ Central (CNT)
• Paraguayan Workers’ Confederation (CPT)

These organizations play an important role in collective bargaining and defending workers’ rights. They also participate in social dialogue with the government and employer organizations.

Workers’ Rights: A Protective Legal Framework

Paraguayan labor law grants numerous rights to workers, including:

• Legal working hours: 48 hours per week (8 hours per day)
• Weekly rest: 24 consecutive hours, typically on Sunday
• Paid vacation: 12 working days per year, increasing progressively with seniority
• Maternity leave: 18 weeks, including 6 before childbirth
• 13th month: Paid in December, equivalent to one month’s salary
• Protection against wrongful termination

The Labor Code also includes specific provisions for the protection of minors, pregnant women, and disabled workers.