TABLE OF CONTENTS
It is common practice in Argentina to reference salaries in USD or CAD. Here’s what the law allows and best practices for compliance.
Setting a Salary Reference in USD or CAD
Employers may reference salaries in a foreign currency (e.g., USD or CAD), but:
Payment must always be made in Argentine pesos (ARS), as required by the Labor Contract Law.
A foreign currency can be used as a calculation benchmark, provided that:
The actual payment is in ARS.
The ARS amount is calculated using:
The exchange rate agreed in the contract, or
If not specified, the official Banco Nación (BNA) rate.
This practice is common for highly qualified roles or international employment arrangements.
Including Dual Currency in Contracts
Contracts can include:
A reference amount in USD/CAD.
Its ARS equivalent based on the agreed exchange rate.
The contract must specify:
Which exchange rate applies (e.g., BNA seller rate).
When the rate will be determined (month-end, business day prior to payment, etc.).
Exchange Rate Conversion Rules
Payment must always be in ARS.
The exchange rate can be freely agreed between the parties, as long as it is documented.
If no rate is specified, the Civil and Commercial Code applies, requiring the official BNA rate.
There is no legal obligation to use a specific rate, provided it is clearly documented.
Legal Restrictions
Payment in foreign currency is prohibited for employment relationships within Argentina.
Referencing salaries in foreign currency is allowed.
What is not allowed: agreeing to mandatory or regular payment in foreign currency.
Employers must always pay in ARS.
Automatic Salary Adjustments Based on Exchange Rate
This is legal and common practice.
If the salary is referenced to a foreign currency, the contract may include an automatic monthly adjustment clause based on the selected exchange rate (e.g., BNA seller rate).
This is not considered a unilateral modification, as it is an objective formula agreed by both parties.
The mechanism must be clearly documented in the contract.
Employer Costs and Implications
All employer costs are calculated in ARS, regardless of the reference currency. This includes:
Social security contributions (approx. 26%–28% for SMEs).
Union contributions (17%, if applicable).
Occupational risk insurance (ART).
Income tax withheld from the employee.
Key implication:If the salary is tied to USD/CAD, exchange rate fluctuations will directly increase employer costs, even if local inflation does not reflect the same movement.
Recommendations and Best Practices
Clearly define the applicable exchange rate (e.g., BNA seller rate).
Specify the conversion date (month-end, business day before payment, etc.).
Include a clause allowing salary structure reviews in case of regulatory changes by the Central Bank (BCRA).
Consider that referencing a foreign currency increases exposure to macroeconomic fluctuations.
Remember: exchange rates can rise or fall, they do not always move in one direction.