Ecuador
Make employment in Ecuador easy. Let us handle payroll, benefits, taxes, compliance, and even stock options for your team in Ecuador, all in one easy-to-use platform.
- Capital City
Quito
- Currency
United States Dollar ($, USD)
- Languages
Spanish
- Population size
17,300,000
Facts & Stats
- Capital City
Quito
- Currency
United States Dollar ($, USD)
- Languages
Spanish
- Population size
17,300,000
- Ease of doing business
Medium
- Cost of living index
$$ (90 of 139 nations)
- Payroll frequency
Bimonthly/Monthly
- VAT - standard rate
12% (0% on imported supplies)
- GDP - real growth rate
0.1%
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.
Grow your team in Ecuador with Remote
Looking to employ workers in Ecuador? Companies hiring in Ecuador must either own a legal entity in the country or work with a global employment solutions provider, usually one that provides employer of record services.
Remote can employ your team in Ecuador on your behalf through our local legal entity in the country and handle payroll, benefits, taxes, and compliance for your Ecuador team. You can also pay contractors now in Ecuador with Remote in some currencies (talk to an expert now for full details).
Risks of misclassification
Ecuador, like many other countries, treats self-employed individuals or contractors and full-time employees differently. Misclassification of contractors in Ecuador may lead to fines and penalties for the offending company.
Employing in Ecuador
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.
Minimum Wage
The Ecuadorian government has set the minimum wage at:
$400 per month base rate, excluding social benefits, plus a 13th and 14th salary, or
$466.66 per month, factoring in mandatory 13th and 14th salaries prorated over the year
Payroll Cycle
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.
13th salary
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.
14th salary
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.
Onboarding Time
We can help you get a new employee started in Ecuador fast. The minimum onboarding time we need is only 4 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.
11 Public holidays
Competitive benefits package in Ecuador
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:
Health Insurance
Dental Insurance
Vision Insurance
Mental Health Support
Pension or 401(K)
Life and Disability Insurance
Taxes in Ecuador
Learn how employment taxes and statutory fees affect your payroll and your employees’ paychecks in Ecuador.
12.15%
Social Security
Types of leave
Employees are entitled to 15 days of continuous annual leave, including weekends (i.e. 11 working days + 4 weekend days).
Employment termination
Termination process
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.
Notice period
There is no notice stipulated notice period and employers are only required to adhere to whatever agreement spelled out in the employment contract.
Severance pay
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.
Probation periods
A probationary period can be defined upon hiring an employee, up to a maximum of 90 days.