Remote’s guide to employing in Ecuador.
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We own our own entity in the countries where we operate to shield your company from risk and provide you and your employees with the signature Remote experience.
The Republic of Ecuador (República del Ecuador) is a sovereign democracy that boasts an increasing GDP powered by commodities like petroleum and agricultural products.
The country has seen a decline in poverty and Ecuador now hosts a competitive labor market for businesses looking to expand into South America and attract Spanish-speaking talent.
United States Dollar
Ease of doing business
Cost of living index
$$ (90 of 139 nations)
VAT - standard rate
12% (0% on imported supplies)
GDP - real growth rate
To employ in Ecuador, companies must own a local legal entity in the country or work with a global employment solution. Managing payroll, benefits, taxes, and compliance in Ecuador can get complicated, especially without established local relationships.
Remote’s global employment solution makes it easy for your company to employ workers in Ecuador quickly, efficiently, and in full compliance with all applicable labor laws. We take on the responsibility and legal risks of international employment so you can focus on hiring great talent and growing your business.
The Ecuadorian Constitution and Labor Code spells out provisions for employee protections and workers’ rights at the federal level, applying to Ecuador’s workforce of 4.2 million. Employees in Ecuador enjoy protections against discrimination based on age, religion, sexual orientation, gender expression, and race.
Common questions that could come up during the hiring process include minimum wage, overtime rates, and guaranteed paid time off. Remote can help you offer a complete, competitive, and compliant benefits package to your employees in Ecuador.
Below are national public holidays applicable for all regions in this country. Remote customers have access to a detailed list of regional public holidays within the Remote platform. Sign up now to access all public holiday information.
|Monday, February 28, 2022||Carnival Holiday (Carnaval)|
|Tuesday, March 1, 2022||Carnival Holiday (Carnaval)|
|Friday, April 15, 2022||Good Friday (Viernes Santo)|
|Monday, May 2, 2022||Labor Day/May Day (Día del Trabajo)||Substitute day for Labor Day on May 1st|
|Monday, May 23, 2022||The Battle of Pichincha Holiday (Batalla de Pichincha)||Substitute day for The Battle of Pichincha Holiday (Batalla de Pichincha) on May 24|
|Friday, August 12, 2022||Independence Day (Primer Grito de Independencia)||Substitute day for Independence Day (Primer Grito de Independencia) on August 10|
|Monday, October 10, 2022||Independence of Guayaquil Holiday (Independencia de Guayaquil)||Substitute day for Independence of Guayaquil Holiday (Independencia de Guayaquil) on October 9|
|Thursday, November 3, 2022||Cuenca Independence Day (Independencia de Cuenca)|
|Friday, November 4, 2022||All Souls' Day (Día de Difuntos)||Substitute day for All Souls' Day (Día de Difuntos) on November 2nd|
|Monday, December 26, 2022||Christmas Day (Navidad)||Substitute day for Christmas Day (Navidad) on December 25|
The Ecuadorian government has set the minimum wage at:
For customers of Remote, all employee payments will be made in equal monthly installments on or before the last working day of each calendar month, payable in arrears.
Ecuador’s ‘13th salary’ consists of an additional monthly bonus equivalent to the proportional monthly part of one twelfth of everything received by the employee in the year. This payment can be paid once a year, but if offered it must be paid by December 22nd.
Ecuador’s 14th salary is equal to the government monthly minimum wage ($400 for 2020) and is payable in March or August depending on the location of the workplace. The employee can request to receive it in an accumulated manner, in which case it must be paid before March 15 in the Coastal and Insular regions, and until August 15 in the Highlands and Amazon regions.
We can help you get a new employee started in Ecuador fast. The minimum onboarding time we need is only 7 working days.
Our team ensures your employees are onboarded and paid as quickly as possible while keeping your business compliant with all local employment legislation. The minimum onboarding time begins after the employee submits all required information onto the Remote platform. The onboarding timeline is also dependent upon registration with local authorities.
For all non-nationals of the country of employment, the Right to Work assessment (if applicable) will add three extra days to the total time to onboard. There may be extra time required if we need to follow-up on the right to work assessment.
Please note, payroll cut-off dates can impact the actual first day of employment. Remote has a payroll cut-off date of the 10th of the month unless otherwise specified.
At Remote, we’re obsessed with helping you craft the best possible employee experience for your team. We are leading the way in practicing “fair equity,” which means making sure employees everywhere have access to both the required and supplemental benefits they need to thrive (and that will allow you to attract the best local talent).
Our benefits packages in Ecuador are tailored to fulfill the local needs of your employees. Typically, our packages contain some or all of the following benefits:
Learn how employment taxes and statutory fees affect your payroll and your employees’ paychecks in Ecuador.
12.15% - Social Security
9.45% – Social security
0% - Up to $11,315
5% - $11,315 – $14,416
10% - $14,416 – $18,018
12% - $18,018 – $21,639
15% - $21,639 – $43,268
20% - $43,268 – $64,887
25% - $64,887 – $86,516
30% - $86,516 – $115,338
35% - Over 115,338
VAT is known as impuesto al valor agregado (or IVA) in Ecuador and calculated at a rate of 12%. This applies to all transfers of ownership or imports of corporeal personal property, copyright, industrial property and related rights, and the provision of services.
Employees are entitled to 15 days of continuous annual leave, including weekends (i.e. 11 working days + 4 weekend days).
Ecuadorian law mandates that employees should take the 12 public holidays off, and if the nature of the job or the employment contract requires an employee to stay on the job during a public holiday, the employer will compensate with a working day off.
Payment for public holidays depends on the agreement reached between employers and their staff, i.e., it should be pre-negotiated.
Up to 2 months, at 50% of the employee’s salary.
New mothers are entitled to 12 weeks of paid maternity leave, of which the employer will be responsible for 25% while social security covers the rest.
The employer is required to grant the working father a paid parental leave of 10 days for a natural birth, 15 for multiple births or birth by C-section, and 23 days if the baby is premature or has special needs.
Employees who obtain a scholarship for studies abroad after spending more than 5 years with a company are entitled to an entire year of absence, with their salaries paid for 6 months, provided the scholarship is in a field related to the employee’s work activity.
Employee contracts can be terminated if a reasonable just cause is established, such as dishonesty, negligence, fraud, or any other work-related offenses. That aside, notice should be provided in advance – provided both parties agree to it.
There is no notice stipulated notice period and employers are only required to adhere to whatever agreement spelled out in the employment contract.
Without the appropriate termination notice, employees are entitled to receive a severance package equivalent to one month’s salary multiplied by the number of years the worker has stayed with the employer, up to 25 years.
A probationary period can be defined upon hiring an employee, up to a maximum of 90 days.