EOR Cost in Latin America (2026): Argentina, Brazil, Colombia and Mexico Compared

• Employer costs are high in all four, from 32.0% to 50.9% on top of a mid-level salary in our cost models, and they include statutory extra payments as well as social security.
• Every one requires a 13th salary or equivalent: Argentina's and Mexico's aguinaldo, Brazil's 13th salary and Colombia's prima de servicios.
• Ending employment costs money by law: severance in Argentina, the 40% FGTS penalty in Brazil, an indemnity in Colombia and three months' pay plus a seniority premium in Mexico. Budget for it before you hire.
• EOR fees are the same as elsewhere: most providers publish one starting price for every country. See EOR pricing by country.

• Argentina: Aguinaldo (13th salary): One-twelfth of the year's pay, paid by 30 June and 18 December, each instalment 50% of the highest monthly salary in that half-year: about one extra month a year.
• Brazil: 13th salary: One twelfth of December pay for each month worked, i.e. one extra month's salary a year, paid in December. Vacation bonus (1/3): At least one third on top of normal pay for the annual vacation.
• Colombia: Prima de servicios (service bonus): 30 days' salary a year, paid half by 30 June and half within the first 20 days of December, pro-rated for time worked. It is not salary, so it doesn't count toward other pay calculations. Cesantías (severance savings): One month's salary for each year of service, pro-rated for part years, based on the last monthly salary (or the past year's average if it varied). Settled each 31 December and deposited into the severance fund the employee chooses before 15 February; late deposits cost one day's salary per day of delay. Interest on cesantías: 12% a year on the cesantías accrued in the year (pro-rated for part years), paid by the employer to the employee. As cesantías are about one month's salary, this is about 1% of annual salary.
• Mexico: Aguinaldo (15 days' pay): Statutory minimum Christmas bonus; employers can pay more. Vacation premium (25% of 12 days): 25% of vacation pay; based on the 12-day first-year entitlement.

Through an EOR, the provider calculates and pays these as the employer and bills you, so agree how they're billed before you hire. Compare all countries in severance pay by country.

• Argentina: After the trial period, one month's salary for each year of service or fraction over three months, with a minimum of one month. The base is the best normal, regular monthly pay in the last year, excluding non-monthly items such as the aguinaldo and vacation pay, capped at three times the average salary of the applicable collective agreement (but never below 67% of the employee's own pay). Since the 2026 reform, collective agreements can replace it with a severance fund, and it is the only compensation for dismissal without cause; dismissals found discriminatory owe an extra 50–100%.
• Brazil: Dismissal without just cause is permitted, but the employer must pay notice (or pay in lieu) and deposit a penalty of 40% of all FGTS deposits made during the employment, updated with interest, into the employee's FGTS account, plus accrued 13th salary and vacation.
• Colombia: An employer can end a contract without just cause by paying an indemnity. Indefinite contracts, salary under 10 minimum wages: 30 days' salary for the first year of service, plus 20 days for each further year (pro-rated). Salary of 10 minimum wages or more: 20 days for the first year, plus 15 days for each further year. Fixed-term contracts: the salary for the rest of the agreed term (for contracts tied to a specific job, at least 15 days). The same indemnity is owed if the employee resigns for a just cause attributable to the employer.
• Mexico: An employee dismissed without proven cause can choose reinstatement or three months' salary, plus back pay of up to 12 months if the employer loses the case. Where the employer is exempt from reinstating, including employees with less than a year's service and trusted (confianza) staff, it also owes 20 days' salary per year of service. A seniority premium of 12 days' salary per year applies on any dismissal.

An entity removes the per-employee fee but brings set-up, accounting and filing costs. Each country guide compares the two for Argentina, Brazil, Colombia and Mexico, and the EOR vs entity calculator works out the break-even point for your team.