Employer of Record in Honduras
General Information
- Currency: Lempira (HNL)
- Employer Taxes: 16.60%
- Payroll Frequency: Monthly/Bi-weekly/Semi Monthly/Daily
- Employee Costs: 8.1%
- Capital: Tegucigalpa
- Fiscal Year: 1 January – 31 December
Main Aspects of the Labour Code
Minimum Wage
General: The minimum wage differs depending on the industry and the size of the employer. The lowest monthly minimum wage is 7,802.20 HNL for agricultural workers, while the highest is 15,495.25 HNL for employees in financial institutions, real estate, and business services.
Payroll
Payroll Cycle: Salary payments are outlined in the employment contract and may vary based on the nature of the work. The payroll cycle can be monthly, bi-monthly, weekly, daily, or hourly.
13th Salary
Full-time employees are entitled to a 13th-month salary, paid as a Christmas bonus in December, and a 14th-month salary, paid in July. Each of these payments is equivalent to one full month’s salary.
Working Hours
General: In Honduras, the standard workweek is 44 hours, with 8 hours per day, six days a week. Managerial and supervisory positions may require longer hours, up to 12 hours per day. The working hours for minors may vary based on their age.
Overtime: Any work beyond the standard working hours is considered overtime and is governed by the employment contract or collective agreements. When employees are asked to work overtime or on holidays, there are limits on the number of hours allowed, with a maximum of 12 overtime hours per week.
Overtime hours exceeding 44 hours per week are compensated at 137.5% of the employee’s regular salary. Overtime worked on a rest day is paid at 200%, while additional hours worked during the night are compensated at 125%.
Leave
Annual Leave (Vacation):
Annual leave entitlement is based on the employee’s length of service:
- Up to 1 year of employment: 10 days of paid leave
- 1–2 years of employment: 12 days of paid leave
- 2–3 years of employment: 15 days of paid leave
- 4 or more years of employment: 20 days of paid leave
Vacation leave must be paid to the employee at least three days before the start of their annual leave.
Public Holidays
Public holidays falling on the weekend are usually lost.
Public Holidays
| Date | Day | Holiday |
| 1 Jan 2024 | Monday | New Year |
| 28 Mar 2024 | Thursday | Holy Thursday |
| 29 Mar 2024 | Friday | Holy Friday |
| 30 Mar 2024 | Saturday | Holy Saturday |
| 15 Apr 2024 | Monday | America’s day |
| 1 May 2024 | Wednesday | Labor day |
| 15 Sep 2024 | Sunday | Independence Day |
| 2 Oct 2024 | Wednesday | Feriado Morazánico |
| 3 Oct 2024 | Thursday | Soldier’s day |
| 4 Oct 2024 | Friday | Dia de la raza |
| 5 Oct 2024 | Saturday | Army’s day |
| 25 Dec 2024 | Wednesday | Christmas |
Sick Days
An employee is entitled to 26 weeks of paid sick leave, which can be extended to 52 weeks after a three-day observation period. Sick leave is paid at 66% of the employee’s average earnings over the past three months.
The cost of sick pay is shared equally between the employer and social security.
Maternity Leave
Maternity leave pay is also shared between the employer and social security. Mothers are entitled to up to 10 weeks of paid leave—4 weeks before the birth and 6 weeks after. There are no legal provisions for paternity leave or shared parental 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
In Honduras, employees are entitled to up to 3 consecutive days of paid leave in the event of the death of an immediate family member.
Employees can also take up to six days of paid leave to perform union duties and half a day of leave to attend a judicial summons.
Additionally, employees are entitled to up to 5 consecutive days of paid leave for marriage.
Taxation
Employer Payroll Contributions
|
5.00%
|
Healthcare (IHSS)
|
|
3.50%
|
Disability, Old Age, Death (up to a maximum of 10,282.37 HNL)
|
|
1.50%
|
Pension Regimen de Aportaciones Privadas (RAP) Any company that has 10 or more employees must contribute to the RAP
|
|
4.00%
|
Labor coverage insurance
|
|
2.60%
|
Collective Capitalization pillar
|
| 16.60% |
Total Employment Cost |
Employer Payroll Contributions
|
2.50%
|
Sickness and Maternity (up to a maximum of 9,849.70 HNL)
|
|
2.50%
|
Disability, Old Age, Death (up to a maximum of 10,282.37 HNL) |
|
1.50%
|
Pension Regimen de Aportaciones Privadas (RAP) Any company that has 10 or more employees must contribute to the RAP
|
|
1.60%
|
Collective Capitalization pillar
|
| 8.10% |
Total Employee Cost |
Employee Income Tax
|
0.00%
|
up to 199,039.47 HNL |
|
15.00%
|
199,039.48 HNL to 303,499.90 HNL |
|
20.00%
|
303,499.91 HNL to 705,813.76 HNL |
| 25.00% | 705,813.77 HNL and above |
Employer of Record in Honduras with Brain Source International
Brain Source International (BSI) is a global Employer of Record service provider that specializes in helping businesses hire and manage talent across multiple countries, including Honduras. For international companies expanding into Honduras, BSI offers a range of services to simplify the employment process and ensure full legal compliance.
Some of the key benefits of working with BSI as your EOR in Honduras include:
1. Compliant Employment Contracts
BSI ensures that all employment contracts comply with Honduran labor laws, including terms related to compensation, job responsibilities, and employee benefits. With a strong understanding of local legal requirements, BSI drafts contracts that protect both the employee and employer, preventing legal disputes.
2. Payroll and Tax Compliance
BSI manages payroll for employees in Honduras, ensuring that salaries are paid on time and that all deductions for income taxes, social security, and other statutory benefits are made in full compliance with local regulations. This reduces the risk of penalties for non-compliance with Honduras’ complex tax and labor laws.
3. Employee Benefits Administration
BSI manages the full range of employee benefits, from paid leave to health insurance and pension contributions. By partnering with BSI, companies can offer competitive benefits packages to attract top talent while ensuring compliance with local benefits regulations.
4. Recruitment and Onboarding
BSI can assist in recruiting talent in Honduras, from job postings to candidate interviews. Once an employee is hired, BSI handles the onboarding process, including legal documentation, introductions to company policies, and ensuring all local requirements are met.
5. Risk Mitigation
By using BSI as an Employer of Record, companies significantly reduce the risks associated with non-compliance with local labor laws. BSI’s expertise in the legal framework of Honduras ensures that employment practices are fully compliant with the labor code, including working hours, termination procedures, and severance pay.
6. Severance and Dismissal Management
If a termination occurs, BSI handles the process in compliance with Honduran law, ensuring that any severance pay or exit procedures are managed correctly. This minimizes legal risks and ensures a smooth separation process for both the employee and the employer.
Why Use Brain Source International (BSI) as Your EOR in Honduras?
- Local Expertise: BSI has extensive knowledge of Honduran labor laws and can help navigate the complexities of employment in the country. With BSI handling the legal and administrative tasks, companies can focus on growing their business.
- Faster Market Entry: By using an EOR like BSI, companies can hire employees in Honduras quickly, without the need to set up a local entity. This provides an efficient and cost-effective way to enter the Honduran market and expand operations without unnecessary delays or overhead costs.
- Cost-Effective: Setting up a local legal entity in Honduras can be time-consuming and expensive. BSI’s EOR services provide a more cost-effective solution for hiring and managing employees, saving companies both time and money.
- Focus on Core Business: By outsourcing HR and compliance management to BSI, businesses can focus on their core operations, product development, or services, while BSI manages the administrative and legal responsibilities related to employment.