The same payment is put through two different tests, under two laws and before two authorities. Article 41 of the Labor Code decides whether or not it is remuneration, and that call is made by the Labor Inspector. Articles 17 and 31 of the Income Tax Law decide whether it is income for the employee and an accepted expense for the company, and that call is made by the SII. The same allowance can pass one test and fail the other.
Vocabulary matters here: the law does not speak of an “expense report” (rendición de gastos); it speaks of “reimbursements of expenses incurred because of the work” and of “rendering an account.” This guide quotes the current text of each rule and also says what the sources do not say, which here is half the value: there is no amount cap, there is no legal deadline to account for or to reimburse expenses, and there is no Chilean rule on funds to be accounted for (fondos por rendir).
The question that reaches finance is a single one—“is this imponible?” (that is, subject to social security contributions)—but the answer comes from two places that do not talk to each other.
The labor test and the tax test, applied to the same allowance
| What is asked | Labor test | Tax test |
|---|---|---|
| Governing rule | Article 41 of the Labor Code | Articles 17 No. 14 and 15 and 31 No. 6 of the Income Tax Law |
| What it measures | Whether it keeps its compensatory nature or exceeds its proper purpose | Whether it is reasonable and directly related to the employee’s activity |
| Who decides | The Labor Inspector, case by case (ORD. N°2473 of 2017) | The SII Regional Director for the paying company’s domicile |
| What happens if it fails | It is imponible remuneration: an excessive per diem means contributions are not being paid correctly | It is added back to net taxable income (article 33 No. 1 letter g) and exposed to the 40% of article 21 |
Article 41 defines remuneration and, in its second paragraph, expressly excludes the allowances at issue here:
“Transport allowances, cash-shortage allowances, tool-wear allowances and meal allowances, per diems, family benefits granted in accordance with the law, the severance payments established in article 163 and any others payable upon termination of the employment relationship, nor, in general, reimbursements of expenses incurred because of the work, do not constitute remuneration.”
The exclusion is statutory and express. And the closing words of the paragraph—“nor, in general, reimbursements of expenses incurred because of the work”—are the phrase that covers the reimbursement of an expense report, even though that term does not appear in Chilean law.
ORD. N°2473 of 06-06-2017 from the Labor Directorate (Dirección del Trabajo) sets the limit: these allowances “will cease to be such and (…) become one more item of the employee’s remuneration (…) when, in practice, they exceed their proper purpose.” It is not the label, it is the amount against the real cost—and the company does not make the call: “it being for the respective Labor Inspector to assess this circumstance in each case.”
In Chile a per diem (viático) is not a synonym for “travel expenses”: it is the sums that pay for “food, lodging or transportation (…), provided that (…) they must be away from their place of habitual residence.” Without that absence it is a transport allowance, not a per diem.
The three allowances and a neighboring case that gets confused with them
| Concept | What it covers, per the official source | Where it is decided |
|---|---|---|
| Transport allowance (movilización) | Travel from home to the company (Circular N°53, section 3.7.2) | Article 41; 31 No. 6 for the company; 17 No. 14 for the employee |
| Meal allowance (colación) | Food during the workday—“colación,” in the language of article 41—(Circular N°53, 3.7.2) | Same as the transport allowance |
| Per diem (viático) | Food, lodging or transportation while away from the habitual residence (ORD. N°2473) | Article 41; 31 No. 6; 17 No. 15, “in the judgment of the Regional Director” |
| Representation expenses (gastos de representación) | Fixed, lump sums, “without the need to render an account” (Oficio N°1.842 of 1999) | They are not income only if established by law (17 No. 16); otherwise they enter the base of the Single Tax on Employment Income (Impuesto Único al Trabajo) |
On the amount, the Labor Directorate is literal: “The law does not require the employer to pay (…) a meal or transport allowance (…). Nor does the law set a maximum amount (…), but (…) it must be understood that they cannot exceed what is reasonable.” Instead there are three factors: they will not be imponible if their amount relates to
For the per diem the consequence has a name: if its amount “is excessive, the employer will not be paying contributions correctly, which may be sanctioned.” On the tax side the standard is symmetrical but with a different judge: article 17 No. 14 requires the sum to “be reasonable in the judgment of the Regional Director,” and No. 15 places “travel allowances and per diems” right there. No figure circulating as a “cap” has any basis in the law.
If you search for “fondos por rendir” (funds to be accounted for) expecting the rule that governs it, you will not find it: the expression does not appear in the Labor Code, the Income Tax Law, Circular N°53 or SII case law. It is accounting practice, not a regulated concept.
The criterion that settles it without naming it is in SII Oficio N°1.842 of 1999, which separates the fixed allowance—handed over “without the need to render an account,” and which, if not established by law, “constitutes income subject to tax”—from money subject to accounting: sums “for which the employee is obliged to render an account with the relevant documentation in the company’s name, without it being possible for such amounts to be considered as additional remuneration of the employee.” The dividing line is not when the money is handed over, but the obligation to render an account—a condition Circular N°53 repeats in 2020.
The SII publishes four requirements: expenses necessary to produce income, with the “capacity to produce income”; not already deducted under article 30; paid or owed in the corresponding fiscal year; and “credited or justified reliably before the Service.” The first one changed: the current article 31 asks for the “capacity to generate income, in the same or future fiscal years” and to be associated “with the interest, development or maintenance of the line of business.” The old formula, “unavoidable or mandatory,” is no longer the test.
There is also a requirement of its own: article 31 No. 6 accepts these allowances “provided that (…) they bear a direct relationship to the nature of the employees’ activity in the company.” It is not an amount test but a fit test: a reasonable per diem paid to someone who never leaves their habitual residence passes the labor test and fails this one.
If the allowance is paid through payroll, Circular N°53 accepts crediting “with the payroll ledger (…), with the respective pay slips and social security contribution statements.” And if the expense is rejected, it is added back to net taxable income (article 33 No. 1 letter g) and article 21 levies a single 40% tax on companies that report actual income with full accounting when “the taxpayer fails to credit the nature and effectiveness of the outlay.”
Every regulatory statement comes from the official text, verified on September 14, 2026. There were deliberate exclusions: the SII’s frequently asked question on uniforms and perks still defines a necessary expense as “unavoidable or mandatory,” a criterion replaced by Law 21.210, and that is why it is not cited; and no software vendor guide was used as a source.
There are also things this guide chooses not to assert: we do not cite doctrine on the unilateral deduction of unaccounted funds because we did not verify its text, we say nothing about the validity of a photo of a receipt because there is no official ruling, and we do not go into the social security perspective, which belongs to another authority.
There is no maximum amount and they are not mandatory either. The Labor Directorate says the law “does not require the employer to pay (…) a meal or transport allowance” and “nor does it set a maximum amount”: it only requires that they not exceed what is reasonable, measured against what the employee normally pays, their socioeconomic bracket and their level of remuneration.
There is none either. The Labor Directorate states that the per diem “must be reasonable and prudent (that is, not excessive)” and that “if its amount is excessive, the employer will not be paying contributions correctly, which may be sanctioned.” When it exceeds the real cost of food, lodging or transportation, it becomes remuneration and imponible.
The per diem assumes the employee is away from their place of habitual residence: it covers food, lodging or transportation in that situation, according to the Labor Directorate. The transport allowance covers travel between home and the company, according to section 3.7.2 of Circular N°53. Travel within the same city is not a per diem.
Representation expenses are not income only if they are established by law, as article 17 No. 16 requires. If they are not, the SII says they “constitute an ancillary or supplementary remuneration to their salaries” that enters the base of the Single Tax on Employment Income. Per diems are not income to the extent the Regional Director so determines.
The SII lists four: expenses necessary to produce income, with the capacity to produce it; not already deducted under article 30; paid or owed in the corresponding business year; and credited reliably before the Service. Proving it is the taxpayer’s burden.
The SII answers that they are not part of the VAT taxable base when there is a mandate from whoever commissions the service, the remuneration does not correspond to employed staff, the sums are recorded in special accounts and the expense “is itemized and proven with reliable documentation, global entries not being accepted.” Note: it deals with reimbursements between companies, not from company to employee.
We found none. The expression does not appear in the Labor Code, the Income Tax Law, Circular N°53 or SII case law. What does exist is the criterion of Oficio N°1.842 of 1999: money handed over with the obligation to render an account in the company’s name is not additional remuneration.
Not unilaterally. Article 58 of the Labor Code allows sums to be deducted from remuneration “only with the agreement of the employer and the employee, which must be recorded in writing,” and those deductions “may not exceed fifteen percent of the employee’s total remuneration.” Added to any other deduction, the combined cap is 45%.
Written from the official text of each rule and from the rulings, letter rulings and frequently asked questions cited below, verified on September 14, 2026. Where something could not be anchored to an official source, the text says so.
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