Country Payroll Guide El Salvador

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Key Facts

Capital
San Salvador
Date format
dd/mm/yyyy
Currency
United States Dollar (USD)
VAT
the standard rate is 13%

Contributions

Employers

Social Security
Social Security - 7.50%
Pension Fund (AEP)
Pension Fund (AEP) - 7.75%
Total Employment Cost
Total Employment Cost - 15.25%

Employees

Social Security
Social Security - 3%
Pension Fund (AEP)
Pension Fund (AEP) - 7.25%
Total Employee Cost
Total Employee Cost - 10.25%

Minimum Wage

Minimum Wage

The monthly minimum wage varies depending on the industry, with the lowest being 202.82 USD in the agricultural sector and the highest being 304.2 USD in the commerce and service sector.

Payroll

Payroll Cycle
Monthly
13th Salary

In the form of a Christmas bonus and based on years of service.

Income Tax

Employee Income Tax (1)
Up to 4,064 USD - 0%
Employee Income Tax (2)
4,064 - 9,142.86 USD - 10% + 212.12 USD
Employee Income Tax (3)
9,142.86 - 22,857.14 USD - 20% + 720 USD
Employee Income Tax (4)
Over 22,857.12 USD - 30% + 3,462.86 USD

Working Hours

General Working Hours

44 hours per week.

Overtime

Overtime is paid at the rate of 200% of the regular pay.

Leave

Paid Time Off

If an employee has been employed for at least one year, they are entitled to 15 days of paid annual leave.  Annual leave is calculated from December 12th. Unused vacation days cannot be paid out, the employee must enjoy all of their vacation days within the year.

Public Holidays

11 days.

Sick Days

The amount of pay and leave depends on the total time an employee has worked for the employer:

  • 1 year or more – 75% of the basic salary for 60 days
  • 5 months but less than a year – 75% of the basic salary for 40 days
  • 1 month but less than 5 months – 75% of the basic salary for 20 days
Maternity Leave

In El Salvador, a woman is entitled to a total of 16 weeks of paid maternity leave at the rate of 75% and is paid by social security. Six of the weeks can be taken before the expected due date and 10 weeks after the birth of the child. If the mother becomes temporarily disabled due to the pregnancy, she may be entitled to 100% of the regular pay.

This is granted by social security to those who paid their contributions. In addition, if the woman experience complications during the pregnancy, the woman may be entitled to additional rest. After the fourth month of pregnancy, the woman cannot be assigned to physical work. Lastly, the woman must present medical documentation to their employer stating their pregnancy status and expected due date.

Paternity Leave

Fathers receive 3 days of paternity leave paid at 100% of the regular pay and can be used within the fist 15 days of the birth of the child.

Parental Leave

No statutory regulations.

Other Leave

Hospitalization Leave: each parents is entitled to 25 days leave if their child is hospitalized.

Bereavement leave: 1 day of paid leave for the death of 1st or 2nd degree relative.

Termination

Termination Process

For individual dismissals, an employer must provide a written termination letter stating the reason for the dismissal. Otherwise, the dismissal is considered void.

Notice Period

Notice period is not required by law.

Severance Pay

Compensation is only required when an unjustified dismissal occurs. For cases in which a labor court deems a dismissal unfair, the employee is entitled to pay from the date of the dismissal as well as severance pay. Severance pay is 30 days’ salary for each year worked.

Probation Period

Probation cannot be more than 30 days.

Visa

Employment Visa

All foreigners who enter El Salvador and want to stay for more than 90 days must obtain a visa. The country has a variety of visa types, including a tourist visa, long-term stay or permanent residency visa, consular or consulted visa, and business visa. Most of your employees will need a permanent residency visa as well as a work permit in El Salvador. Foreign nationals who frequently travel to the country for business can apply for a Frequent Traveler Card in the country.

Work permits are combined with temporary residency permits. Both are valid for one to two years but can be extended up to five years. Citizens from Central American countries can apply directly for permanent residency in El Salvador, and individuals from Spain, Latin America, and other Spanish-speaking countries can obtain permanent residence after one year of holding a temporary residence permit. All other foreigners can apply for permanent residence after renewing the temporary residence permit three consecutive times.