The indefinite-term contract is the standard and default relationship, offering strong job stability and full statutory benefits after the 90-day trial period.
General fixed-term contracts were eliminated by the 2015 reform; only special modalities remain (eventual, occasional, seasonal, specific-work, and sector-specific contracts).
Standard week is 40 hours over 5 days (8 hrs/day); overtime capped at 4 hrs/day and 12/week, paid at +50% (supplementary hours until midnight) and +100% for night hours, weekends and holidays.
Indefinite contracts may include a written probation of up to 90 days, during which either party may terminate freely without severance; only 15% of a workforce may be on probation at once.
The décimo tercero (1/12 of annual earnings, due by Dec 24) and décimo cuarto (one SBU — USD 482 in 2026) are both mandatory; employees may opt for monthly pro-rated payment.
Job titles not heavily regulated, but sectoral minimum wage tables (salarios sectoriales) assign minimum pay by occupation and industry, so titles should match the applicable category.
Employers pay 12.15% to IESS (11.15% social security incl. health, pension, occupational risks 0.55% and cesantía, plus 0.5% IECE and 0.5% SECAP), a reserve fund of 8.33% after one year, and must distribute 15% of pre-tax profits to employees (utilidades).
Employees contribute 9.45% of gross salary to IESS, plus progressive personal income tax from 0% to 37% withheld by the employer for the SRI.
In addition to statutory leave, employees are entitled to the following statutory benefits:
Ecuador's social security institute (IESS) covers employees through a combined contribution of 21.60% of gross salary — 12.15% employer and 9.45% employee — funding:
Work accident and occupational disease coverage runs through the IESS occupational risks insurance (Seguro General de Riesgos del Trabajo), funded by a 0.55% employer contribution included within the 12.15% IESS rate; it pays medical care, disability subsidies and survivor pensions, and employers must also comply with workplace health and safety regulations overseen by the Ministry of Labor.
Dismissal without cause (despido intempestivo) triggers a statutory indemnity: 3 months' salary for up to 3 years of service, then 1 month's salary per year of service, capped at 25 months. In addition, every terminated employee (including on resignation via desahucio) receives a desahucio bonus of 25% of the last monthly salary per year of service, plus accrued proportional 13th/14th salaries, unused vacation and reserve funds.
Two mandatory bonuses apply. The décimo tercer sueldo (13th salary) equals one-twelfth of all remuneration earned in the year, paid by December 24. The décimo cuarto sueldo (14th salary) equals one unified basic salary (USD 482 in 2026), paid by March 15 in the Coast/Insular region or August 15 in the Sierra/Amazon. Employees may elect monthly pro-rated payment; both bonuses are exempt from IESS contributions and income tax.
P.S. our team speaks multiple languages and we'd love to chat in your preferred language if requested.
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), Australian Dollars (AUD), or Singapore Dollars (SGD) around the 15th of each month to make sure your employees are paid on time. 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).
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.
Whenever the employee or employer has a question about, or anything else related to international employment, they can speak with our customer support team to get answers from our team of experts.
