Country Payroll Guide Guatemala

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Key Facts

Capital
Guatemala City
Date format
dd/mm/yyyy
Currency
Quetzal (GTQ)
VAT
the standard rate is 12%

Contributions

Employers

Workers Recreational Institute (IRTRA)
Workers Recreational Institute (IRTRA) - 1%
Professional Training Institute (INTECAP)
Professional Training Institute (INTECAP) - 1%
Social Security
Social Security - 10.67%
Total Employment Cost
Total Employment Cost - 12.67%

Employees

Social Security
Social Security - 4.83%
Total Employee Cost
Total Employee Cost - 4.83%

Minimum Wage

Minimum Wage

Minimum wage depends on the industry:

  • Agriculture – 2,742.37 GTQ per month
  • Non-agriculture – 2,825.10 GTQ per month
  • Exporter or maquila – 2,581.76 GTQ per month

However, if an employee receives the minimum wage, they are also entitled to a monthly bonus of 250 GTQ.

Payroll

Payroll Cycle
Monthly
13th Salary

Salaried employees should receive two bonuses a year, equivalent to one months’ salary each and are paid out in July and December.

Income Tax

Employee Income Tax (1)
Up to 300,000 GTQ - 5%
Employee Income Tax (2)
Over 300,000 GTQ - 7%

Working Hours

General Working Hours

The standard workday is 8 hours but cannot exceed 12 hours per day. However, working hours do not apply to high-level executives or domestic workers. In addition, there are some other classifications of workers that working hours don’t apply to such as caretakers, and doormen.

Overtime

Anything over 44 hours in a work week is considered overtime and is paid at a rate of 150% of the regular pay.

Leave

Paid Time Off

Employees are entitled to 15 days of vacation after their first year of service.

Public Holidays

12 days.

Sick Days

Sick pay is either paid by the employer or social security, depending on the reason for the sickness and is paid at 50% of the regular pay rate. The length of sick pay depends on the length of employment:

  • 2–6 months of employment – 1 month of paid sick leave
  • 6-9 months of employment – 2 months of paid sick leave
  • 9+ months of employment – 3 months of paid sick leave.

If the employee has not recovered by the time that the sick leave is over, the employment agreement is automatically suspended (“total suspension”) and all employer and employee obligations are put on hold. In this case, the employee may terminate the employment agreement, however, the employer may not unless under just cause. In addition, the employer may seek to fill the employee’s duties on a temporary basis which can be terminated upon the return of the employee.

Maternity Leave

Mothers are entitled to 84 days of maternity leave starting from 30 days before the expected due date. In the event of a miscarriage or stillbirth, the mother is entitled to 42 days of paid leave.

Paternity Leave

There are no provisions in the law regarding paternity leave.

Parental Leave

There are no provisions in the law regarding parental leave.

Other Leave
  • Bereavement leave– 3 days paid leave in the event of the death of a spouse or child.
  • Wedding– 5 days paid leave for the wedding of the employee.
  • Labor union leader– up to 6 days of paid leave for a member of a union’s executive committee in order to carry out union duties. Such a person may also be entitled to additional unpaid leave.
  • Judicial summons– half a day of paid leave.

Termination

Termination Process

In Guatemala, there is no specific termination procedure other than providing written notice and for just cause.  There are, however, some instances in which the employer must get permission to dismiss an employee: If the employee is pregnant or nursing, when an employee is engaging in forming a union, Union leaders, “Collective conflict” under collective bargaining.

Notice Period

The notice period varies based on the length of employment:

  • Up to 6 months – 1 weeks’ notice
  • 6 months-1 year – At least 10 days’ notice
  • 1-5 years – At least 2 weeks’ notice
  • 5+ years – 1 months’ notice
Severance Pay

Severance payment is only granted when a court finds that an employer was dismissed without just cause.  In this case, the employee is entitled to either be reinstated and back paid from the date of termination or are entitled to severance pay equal to one months’ salary for every year employed.

In addition to the above, if the employee has received any non-cash benefits such as the use of an employee car, mobile phone, food, etc., they are entitled to an additional 30% of their salary for each year of employment.

Probation Period

2 months.

Visa

Employment Visa

Before foreign nationals can work in Guatemala, they need a temporary residence permit as well as a work permit. It’s necessary to begin the process with the application for a temporary residence permit, as proof of the application is a minimum requirement to obtain a work permit. The applicant (or the company, depending on the status of the prospective employee) should provide the necessary documents to the General Directorate of Migration and wait for approval.