Hire employees and contractors in Honduras

Remote’s guide to employing in Honduras.

  • Capital city

    Tegucigalpa

  • Currency

    Honduran lempira
    (L, HNL)

  • Population size

    9,570,000
    (2020)

  • Languages spoken

    Spanish

  • Availability

    Remote-Owned Local Entity

    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.

Facts & Stats

The Republic of Honduras (República de Honduras) is Central America’s second-largest nation and is bordered by Guatemala, El Salvador, and Nicaragua. While the island nation is famous for its breathtaking landscape that’s dotted with mountains, rainforests, and well-preserved Mayan ruins, there’s even more to Honduras than meets the eyes.

Honduras is rich in natural resources and is famous for its tropical fruit, sugar cane, and coffee that’s exported across the Americas.

  • Capital city

    Tegucigalpa

  • Currency

    Honduran lempira
    (L, HNL)

  • Languages spoken

    Spanish

  • Population size

    9,570,000 (2020)

  • Ease of doing business

    Medium

  • Cost of living index

    42.20 (2021)

  • Payroll frequency

    Monthly

  • VAT - standard rate

    15%

  • GDP - real growth rate

    -9.0% (2020)

Grow your team in Honduras with Remote

To employ in Honduras, companies must own a local legal entity in the country or work with a global employment solution. Managing payroll, benefits, taxes, and compliance in Honduras can get complicated, especially without established local relationships. 

Remote’s global employment solution makes it easy for your company to employ workers in Honduras 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.

Risks
of misclassification

Like many other countries, Honduras treats self-employed individuals or contractors and full-time workers differently and there are risks associated with misclassification.

Employing in Honduras

We can help you get a new employee started in Honduras fast. The minimum onboarding time we need is only 7 working days.

Provisions for employee protections and workers’ rights are spelled out in the Honduran Constitution as well as across several government statutes, including:

  • The Honduran Labor Code
  • The National Program of Employment Per Hour, and
  • Bylaws and Depositions of Social Security & Minimum Wage

Employees in Honduras enjoy protections against discrimination based on age, religion, gender expression, and race.

Competitive benefits package in Honduras

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 Honduras 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 Honduras

Learn how employment taxes affect your payroll and your employees’ paychecks in Honduras.

  • Employer

    • 5%: Healthcare

    • 3.5%: Disability, Old Age, Death (capped at 10,282.37 HNL, i.e., $424.47)

    • 1.5%: Pension Regimen de Aportaciones Privadas; Compulsory for businesses with 10+ employees

    • 4%:  Labor coverage insurance

    • 2.6%: Collective Capitalization pillar

  • Employee

    • 2.5%: Sickness and Maternity (capped at 9,849.70 HNL, i.e., $406.61)

    • 2.5%: Disability, Old Age, Death

    • 1.5%: Pension Regimen de Aportaciones Privadas; Compulsory for businesses with 10+ employees

    • 1.6%: Collective Capitalization pillar

  • Income tax rates

    • 0%: up to 172,117.90 HNL ($7105.34)

    • 15%: 172,117.90 HNL ($7105.34) to 262,449.27 HNL ($10834.38)

    • 20%: 262,449.27 HNL ($10834.38) to 610,347.16 HNL ($25196.24)

    • 25%: 610,347.16 HNL and beyond ($25196.24+)

Types of leave

Paid time off

Employees can enjoy up to 20 days of paid vacation annually, depending on their tenure with an employer.

Up to 1 year of employment: 10 days of paid vacation

1-2 years: 12 days of paid vacation

2-3 years: 15 days of paid vacation

4+ years: 20 days of paid vacation

Public holidays

There are 10 public holidays that employees can take off work.

Sick leave

Any sick leave that exceeds a three day period must be allowed by employers as long as it is certified by the Institute of Social Security. Salary from sick leave that does not exceed three days must be covered completely by the employer.

Sick leave after the fourth day will be paid as follows:

  • The IHSS will pay 66% of the ceiling in force (which changes every year in connection to the approved minimum wage)
  • The employer will pay the difference between the employee’s actual salary and the subsidy paid by the IHSS.

Maternity leave

New mothers are entitled to a minimum mandatory maternity leave period of 42 days before birth and another 42 days after birth. Maternity benefits are paid for jointly by the employer and the social security. The employer must pay the difference between 66% of a ceiling published every year based on the approved minimum wage and the employee’s actual salary.

Paternity/parental leave

There are no provisions for parental or paternity leave under Honduran law.

Other leave

The Labor Code establishes that employers must give permission to the employee to be absent from work in case of public duties, trade union duties, attending a coworker’s funeral, and serious domestic calamity (this is not defined by the Work Code, but it is mostly invoked in cases of sickness or death of immediate relatives).

  • Bereavement leave: Although bereavement leave is not expressly provided by law, the employer can give PTO for serious domestic calamity.
  • Marriage leave: Couples qualify for five consecutive days of paid marriage leave.
  • Civil & union duty: Workers can take up to six days off for union engagements and up to half a day for attending court proceedings.

Employment termination

Termination process

Employee contracts can be terminated with notice once a reasonable cause is provided and adequate warnings have been made. Employers are required to reinstate employees if a court rules a termination was unfair.

Notice period

There is no mandatory notice period under Honduran law and employers are only required to adhere to whatever was agreed to in the employment contract.

Severance pay

Employees who’re dismissed unfairly are entitled to severance payments proportional to their tenure working with an employer.

  • 3 - 6 months: 10 days pay
  • 6 months - 1 year: 20 days pay
  • One year and above: one month’s salary for each year worked, capped at 25 months’ pay.

Probation periods

The probation period is limited to 60 days or roughly two months.

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