Employer of Record in El Salvador

General Information

• Currency: United States Dollar (USD)
• Employer Taxes: 15.25% – 16.25%
• Payroll Frequency: Monthly
• Employee Costs: 10.25%
• Capital: San Salvador
• Fiscal Year: 1 January – 31 December

Main Aspects of the Labour Code

Minimum Wage

General: El Salvador does not have a universal national minimum wage; instead, the minimum wage is determined by the specific sector in which an employee works. National minimum wages vary, ranging from $243.46 for agricultural workers to $365.00 for employees in the industrial and commercial service sectors.

Payroll

Payroll Cycle: In El Salvador, the payroll cycle can be weekly, bi-weekly, or monthly. Payments must be made on the same day each month and no later than one working day after the end of the pay cycle.

13th Salary

In El Salvador, it is customary to provide employees with a 13th-month salary payment in December as a Christmas bonus. This payment, typically made around December 20th, varies based on the employee’s years of service. Employers pay 15 days’ salary for those with one to three years of service, 19 days for employees with three to ten years, and 21 days for those with over ten years of service.

Working Hours

General: In El Salvador, the standard working week comprises 44 hours, usually divided into 8 hours per day over five and a half days.

Overtime: Any work performed beyond the standard weekly hours is considered overtime and is governed by the employment contract or collective agreements. There are no restrictions on the number of hours worked, except for minors. Typically, overtime hours exceeding 44 hours per week are compensated at a rate of 200% of the employee’s regular salary.

Leave

Annual Leave (Vacation):

After an employee has worked for at least one year (or more than 200 days in that year), they are entitled to 15 days of paid annual leave, calculated from December 12 to December 12. This paid time off is compensated at 130% of the employee’s regular salary and is paid out before the leave begins. Any unused vacation days cannot be financially compensated and will be forfeited.

Public Holidays

There are 11 public holidays in El Salvador.

Sick Days

In El Salvador, the amount of sick leave an employee is entitled to is based on their years of service:

For one year or more of employment, employees are eligible for 75% of their basic salary for 60 days.

For 1 to 5 months of employment, employees receive 75% of their basic salary for 20 days.

For 5 months to 1 year of service, they are entitled to 75% of their basic salary for 40 days.

Maternity Leave

In El Salvador, female employees are entitled to up to 16 weeks of paid maternity leave, calculated at 75% of their regular wages. To qualify, the employee must provide a medical certificate confirming her pregnancy and expected due date. Maternity leave must include at least six weeks before the due date and can extend up to 10 weeks after childbirth. If there are any pregnancy-related complications, the employee can request an extension of the maternity leave. For the health and safety of the employee, she should not be assigned any physical work after the fourth month of pregnancy.

New legislation, effective January 2023, mandates that private-sector companies with 100 or more employees provide daycare services for employees’ children by mid-2024. Although the law regarding employer-paid daycare services takes effect on January 1, 2023, private companies will have 18 months from that date to implement this benefit, with an earlier deadline set for public companies.

Paternity Leave

In El Salvador, fathers are entitled to three days of paternity leave, which must be taken within the first 15 days following the child’s birth. This leave is paid at 100% of the employee’s regular salary.

Parental Leave

In El Salvador, employees who have suffered the loss of an immediate family member are entitled to one day of paid leave bereavement leave.

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