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North America

El Salvador

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Employer of Record (EOR) in El Salvador

What you'll learn

  • Country Introduction
  • Tax Breakdown for Employers
  • Statutory Leave Laws
  • Minimum Wage and Working Hours
  • Termination Process
  • Additional Information
El Salvador Introduction

El Salvador is country in Central America that is bordered by Honduras, Guatemala, and the Pacific Ocean. It is the smallest country in Central America known as the land of volcanoes. In 2001 the country changed its official currency to the US Dollar, and in 2021 it passed legislation to make Bitcoin legal tender in El Salvador.

Paid Leave and Statutory Leave

Parental Leave

Pregnant employees can receive up to 16 weeks of paid maternity leave, which is paid at 75% of the regular salary. At least 6 weeks of the leave need to be taken before the due date and up to 10 weeks after the birth. The leave can be extended if there are any complications.

Fathers are entitled to 3 days of paternity leave within 15 days of the birth, which is paid at 100% of the regular salary.

Sick Leave

Employees in El Salvador are entitled to sick leave, with amounts based on how long they’ve been employed at the company. The sick leave is paid at 75%

  • 1-5 months = 20 days
  • 5 months-1 year = 40 days
  • 1+ years = 60 days

Paid Leave

There are 11 public holidays in El Salvador, and employees who have worked at least 1 year at their company are entitled to 15 days of paid time off each year.

In El Salvador, paid time off is paid at 130% of the regular salary and paid to the employee before their time off. Any vacation days that are unused are lost and not financially compensated. Employees can also request 1 day of paid bereavement leave per year.

Wage Requirements and Working Hours

There is no minimum wage in El Salvador since each sector determines their own. The average minimum wage is USD 365 per month. The standard workweek in El Salvador is 44 hours per week, for 8 hours a day over 5.5 days. Any work done past the standard hours is paid as overtime generally at around 200% of the salary.

Termination Process

Process

The termination process in El Salvador varies based on whatever is stipulated in the employment contract.

Notice Period

The notice period is also stipulated within the employment contract. While a notice period for termination is not mandatory in El Salvador, it is a common practice for employees to provide a minimum of 7 days of notice to leave the company.

Severance Pay

Severance pay will depend on the reasons for termination. Severance is not required in cases of resignation or if a fixed contract’s terms have elapsed.

Severance is generally calculated as 30 days of wages for every year at the company.‍

Additional Information

It’s common to pay a 13th month salary bonus to employees in December. The amount depends on how long the employee has worked at the company:

  • 1-3 years = 15 days wages
  • 3-10 years = 19 days wages
  • 10+ years = 21 days wages
OVERVIEW
Language(s):
Spanish
Currency:
United States Dollar (USD)
Capital City:
San Salvador
Population:
6.5 Million
Cost of Living Rank:
64th
VAT (Valued Added Tax):
13%
Employer TaxES
16.25%
(estimated)

★  7.5% - Social Security

★  7.75% - Pension Fund

★  1% - INSAFORP

Simplified Global HR and Payroll.
Let’s work on it together.

We've made the process really simple
with only 3 steps.

1

Remote candidate

You've sourced a full-time employee or contractor located in a country where your company is not incorporated.

2

Cost Calculation

Pass us the details of your candidate and we will let you know exactly what it costs to employ your candidate in that country.

3

Onboarding & Admin

Sit back and relax as we onboard your new team member and take care of all the local compliances and admin work.

Same-day onboarding
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Available in 150+ countries
How Remofirst employs in El Salvador

It can be prohibitively expensive to establish an entity in every country you want to hire talent in, so Remofirst will hire and pay your employee on your behalf while you manage their daily duties. Remofirst will handle formal HR procedures and employment contracts that adhere to local laws, so that you can simply approve invoices via our platform. When you work with an Employer of Record (EOR) you can compliantly hire the best employees around the world.

How employees in El Salvador get paid
Your employee's hours, time off, holidays, bonuses, and commissions are automatically calculated into payroll. Remofirst will invoice you in either US Dollars (USD), Euros (EUR), British Pounds (GBP), Canadian Dollars (CAD), or Singapore Dollars (SGD) around the 15th of each month to make sure your employees in El Salvador are paid on time in United States Dollar (USD). To make it even easier, you can summarize your entire global team's salaries to aggregate them into one payment (instead of many individual payments).
Full-time Employees vs Global Contractors

Unlike full-time employees, contractors work on projects with multiple companies at a given time and are technically self-employed. Full-time employees are solely focused on their employer and usually receive benefits (such as health insurance, equity or stock options, and time off) as an additional form of compensation. While it can be cheaper to work with international contractors instead of paying benefits to a full-time employee, you run the risk of misclassification. It's recommended to work with an EOR for contractor onboarding and payments, so you can know that your international contractors are paid compliantly and on time.

Dependable support for employees
Whenever the employee or employer has a question about benefits, Visas, or anything else related to international employment in El Salvador, they can use our platform's chat function to get answers from our team of experts. Every client of Remofirst also receives a dedicated account manager that will serve as a point of contact for global HR support.