The Labor Modernization Law 27.802 brought with it a package of fiscal and labor tools that, together, could configure a cost reduction for private companies that has not been seen in decades.
This is detailed by the firm PMP Accounting & Consulting, an accounting firm that provides tax, labor, and accounting advisory services.
"The set of new regulations makes the context more favorable for companies, or less unfavorable if the company is going through a difficult time. It is recommended to incorporate the new variables into our projected flow and take them into account in decision-making processes," says Juan Pablo Perojo, Director of PMP Estudio.
"A historical issue for SMEs in our country was the high labor cost, which could cause financial problems when having to lay off workers. Part of the reform aims to bring predictability to this cost without increasing the company's labor cost," he adds.
Labor Reform
Three of these instruments already have regulations published in the Official Gazette and are available for SMEs: the Labor Formalization Incentive Regime (RIFL), in effect since May 1; the Medium Investments Incentive Regime (RIMI), regulated in April; and the Labor Assistance Fund (FAL), whose operation will begin on November 1, 2026, according to Decree 408/2026.
The RIFL, for example, allows for a reduction of employer contributions to social security by between 58% and 75% for 48 months. The RIMI offers tax benefits for those who invest. The FAL, for its part, completes the cost reduction scheme.
The underlying diagnosis justifying this package is compelling: according to the Permanent Household Survey by INDEC, 43% of Argentine workers operated informally at the end of 2025 (about 9.2 million people), a figure that rose to 44.2% in the first quarter of 2026. That is to say, the data indicates that, according to official statistics, the economic recovery is not translating into registered employment.
RIFL: 48 months of reductions in employer contributions
The RIFL could be the instrument with the greatest immediate impact for those needing to hire staff. From May 1 until April 30, 2027, private employers can hire workers under an employer contribution rate of 5% instead of the usual 18% or 20.4%, a reduction of between 58% and 70%, depending on the size of the company.
The benefit extends for 48 months from the start of each employment relationship. This means that a company hiring in May 2026 will maintain the savings until April 2030.
A small and medium-sized enterprise (SME)
The key requirement focuses on the profile of the hired worker: they must have been unemployed for at least six months prior to the hiring, not have had a registered employment relationship as of December 10, 2025, have been a sole proprietor, or come from the public sector.
While ideally the employer should exercise the option explicitly from the start of the relationship using code 710 in the "ARCA Registration Simplification" system, it is possible to adhere late if it is later detected that the worker met the requirements.
However, it is important to consider that the months elapsed between the original hiring and the modification of the code will be deducted from the total 48-month period that grants the benefit.
RIMI: benefits in Income Tax and VAT
The RIMI is aimed at all SMEs that make productive investments during the first two years from the law's enactment. Its benefits are twofold: accelerated depreciation in Income Tax and early reimbursement of the VAT tax credit.
The accelerated depreciation allows for the deduction of new movable assets in two years instead of the usual periods, which can reach ten, and for construction projects, it allows for a 60% reduction in useful life. For specially promoted assets such as irrigation equipment, hail nets, pedigree livestock, or high-energy efficiency assets, the period is reduced to one year and the minimum investment amount requirement is eliminated.
Accounting
A simulation by PMP on a microenterprise with a minimum investment of USD 150,000 in machinery (on a conservative basis, without projecting sales increases or inflation adjustments) shows that the RIMI generates savings equivalent to 14% of the investment in terms of income tax during the first two fiscal years. Under the assumptions of the study, it would allow for the recovery of 78% of the VAT paid by the fourth month after the purchase.
"The effect is 100% financial: the total tax that the company will pay over the useful life of the asset will be the same. What changes is when it is paid, and in a country with inflation and devaluation, that timing is everything," explains Perojo.
The minimum investment amounts to access the RIMI are USD 150,000 for microenterprises, USD 600,000 for small enterprises, USD 3.5 million for medium enterprises tier 1, and USD 9 million for medium enterprises tier 2. Financial assets, portfolios, and goods for resale are excluded.
FAL: the fund for severance payments arrives in November
The FAL was the most debated instrument of the reform. Initially scheduled to come into effect on June 1, it postponed its implementation to November 1. The postponement responds to the need for ARCA, the CNV, the Ministry of Labor, and the Ministry of Economy to issue the operational regulations that enable the system.
What is already clear is the architecture of the fund: companies will be required to allocate 2.5% of their payroll monthly (for SMEs) or 1% (for large companies) to a fund managed by entities authorized by the CNV. This contribution is offset by an equivalent reduction in employer contributions to social security. The net labor cost does not increase.
Workers
The fund is unattachable, does not pay Income Tax, and can only be used for severance payments. Its use is optional and can be partial. Employers will need to initiate the adhesion process (choosing a managing entity, opening an account, and obtaining the FAL ID).
According to projections from PMP, an SME with 40 employees and average gross salaries of $2,000,000 could accumulate in the FAL, after one year, sufficient funds to cover 11.2 months of severance payments. In just six months, the fund would cover 5.9 months of obligations.
According to the private study, the critical point is the timing. The RIFL is only in effect until April 30, 2027, for new hires and the benefit will be obtained for 48 months. The RIMI applies to investments made in the first two years from the law's enactment. And the FAL starts in November with operational regulations still pending.
For companies that combine all three instruments, the savings in labor and fiscal costs can be significant and sustained over time. But the window to activate all three simultaneously is limited.
