Chile Final Settlement: Rules Explained

Never sign clean if you disagree

A minister of faith can be a labour inspector, notary, civil registry officer or municipal secretary. Without ratification, the worker can still claim differences. Never sign a finiquito clean if you disagree with any amount or with the stated cause. Sign with a written reservation of rights, known as reserva de derechos, or do not sign, and challenge within 60 business days. Signing clean is the single most expensive mistake workers make, because it closes claims that were still open.

The five parts and which cause gives which

Pending salary equals days worked in the final month that are still unpaid, at monthly salary divided by 30. Indemnización por años de servicio, under Article 163, equals one month of pay per countable year of service, from one year of service, capped at 11 years, which is 330 days. A fraction over six months counts as a full year. The monthly pay used is capped at 90 UF. Indemnización sustitutiva del aviso previo, under Article 162, equals one month of pay in lieu, when the 30 days' written notice was not given. It is also capped at 90 UF. If notice was given, this line is zero.

Feriado proporcional, under Article 73, equals accrued vacation business days converted to calendar days, paid at monthly salary divided by 30. This line uses the uncapped monthly salary: the 90 UF cap covers the indemnities in the indemnity title, and feriado compensation is not one of those indemnities. Pending gratificación is only an amount actually outstanding. Gratificación is never added by default. In short, finiquito equals pending salary plus years-of-service indemnity plus notice pay plus feriado plus pending gratificación, minus any AFC deduction where it applies.

The 90 UF cap, the 11-year cap and feriado

The monthly pay used for the indemnities cannot exceed 90 UF on the last day of the month before payment, under Article 172, final paragraph. At the 1 November 2026 UF of 41,252.94 Chilean pesos, 90 UF is 3,712,765 pesos. The cap applies to both the years-of-service indemnity and the notice payment, for workers hired before and after 1981 alike, following Dirección del Trabajo opinions 5717 and 2494/180. It does not cover feriado, paid at monthly salary divided by 30 without the cap, or pending salary, which is not an indemnity at all. The cap can be waived by agreement: parties may agree a higher conventional indemnity, and the agreed amount applies instead. The UF changes daily and is published for the 10th to the 9th of the following month. If your payment month differs, update the UF figure.

The years-of-service indemnity is capped at 11 years. The fraction rule decides countable years: a fraction over six months counts as a full year. Under one year, the count is zero. One year and five months counts as one year. One year and seven months counts as two years. Three years and five months counts as three years. Three years, six months and ten days counts as four years. Fourteen years counts as 11, under the cap. Two exceptions exist, and neither is a second cap. Workers hired before 14 August 1981 and still employed at 1 December 1990 keep the indemnity without the Article 163 cap, under Article 7 transitorio. Workers hired after 13 August 1981 and before 1 December 1990 get the 11-year cap, but the payment form differs: 150 days at once, the remainder in successive monthly instalments of 30 days, under Article 8 transitorio.

Worked examples and what is not included

Example one is a standard Article 161 dismissal. Salary is 1,200,000 pesos per month, service is five years and eight months, no 30-day notice was given, the full final month was worked, and eight months have passed since the last vacation anniversary, with no vacation taken, not in an extreme zone. Countable years are six. Years-of-service indemnity is 7,200,000 pesos. Notice pay is 1,200,000 pesos. Feriado is 10 business days, which convert to 14 calendar days in the window 31 October to 13 November 2026, including four weekend days. At a daily rate of 40,000 pesos, feriado is 560,000 pesos. The total is 8,960,000 pesos, plus any pending salary, gratificación or overtime actually owed.

Example two shows both caps biting. Salary is 5,000,000 pesos per month, service is 14 years, Article 161, no notice given. The capped base is 3,712,765 pesos. Countable years are 11. Years-of-service indemnity is 40,840,415 pesos. Notice pay is 3,712,765 pesos. Indemnity plus notice total 44,553,180 pesos, before feriado and pending salary, which follow uncapped salary rules. Without the caps the same worker would show 75,000,000 pesos. The caps remove 30,446,820 pesos.