Country Payroll Guide Puerto Rico

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Key Facts

Capital
San Juan
Date format
mm/dd/yyyy
Currency
U.S. Dollar (USD)
VAT
the standard rate is 11.5%

Contributions

Employers

State Unemployment Tax (SUTA)
State Unemployment Tax (SUTA) - 1.4% to 5.4%
Federal Unemployment Tax (FUTA)
Federal Unemployment Tax (FUTA) - 6%
Medical Care (FICA)
Medical Care (FICA) - 1.45%
Social Security (FICA)
Social security (FICA) - 6.2%
New Employer Tax
New Employer Tax - 2.9%
Total Employment Cost
Total Employment Cost - 17.95% to 22.85%

Employees

Unemployment (FUTA)
Unemployment (FUTA) - 6%
Social Security (FICA)
Social Security (FICA) - 6.2%
Medical Care (FICA)
Medical Care (FICA) - 1.45%
Total Employee Cost
Total Employee Cost - 13.65% to 14.55%

Minimum Wage

Minimum Wage
The minimum wage in Puerto Rico is 6.55 USD per hour.

Payroll

Payroll Cycle
Bi-Weekly
13th Salary

The mandatory Christmas Bonus is reduced to 2% of the total salary, with a $600 cap for employees who work 1,350 hours that year, and up to $300 if the employer has twenty (20) employees or less.

Income Tax

Employee Income Tax (1)
Less than 9,000 USD - 0%
Employee Income Tax (2)
9,000 - 25,000 USD - 7% of the excess over 9,000 USD
Employee Income Tax (3)
25,000 - 41,500 USD - 1,120 USD plus 14% of the excess over 25,000 USD
Employee Income Tax (4)
41,500 - 61,500 USD - 3,430 USD plus 25% of the excess over 41,500 USD
Employee Income Tax (5)
Over 61,500 USD - 8,430 USD plus 33% of the excess over 61,500 USD

Working Hours

General Working Hours

40 hours per week.

Overtime

Overtime is paid at the rate of 150% of the regular pay.

Leave

Paid Time Off
  • 6 days for 1st year
  • 9 days between 1-5 year
  • 12 days after the 5th year
  • 15 days after the 15th year
Public Holidays

19 public holidays.

Sick Days

Six days after successful completion of the first year of employment. After the first year, employees are entitled to 12 days which is accrued at the rate of one day per month following the commencement of at least 130 hours in that month.

Maternity Leave

Eight weeks.

Paternity Leave

Up to six months unpaid leave.

Parental Leave

No paid leave, can request up to 12 weeks unpaid leave.

Other Leave

Up to six months for an employee if they suffer with one of the Serious Diseases of Catastrophic Character.

Termination

Termination Process

Must have a reason to terminate an employee based on the employee’s job performance or behaviour.

Notice Period

No notice period.

Severance Pay

If there is no just cause for dismissal, the employee receives severance pay. The employee receives two months’ pay if the termination occurs within the first five years of employment and three months if after five years of employment.

Probation Period

Nine months.