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Remote’s guide to employing in

Puerto Rico
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Make employment in Puerto Rico easy. Let us handle payroll, benefits, taxes, compliance, and even stock options for your team in Puerto Rico, all in one easy-to-use platform.

  • Capital City

    San Juan

  • Currency

    United States Dollar ($, USD)

  • Languages

    Spanish and English

  • Population size

    3,285,874

  • Remote-Owned Local Entity

Services available in this country:
Employer of Record Product

Facts & Stats

  • Capital City

    San Juan

  • Currency

    United States Dollar ($, USD)

  • Languages

    Spanish and English

  • Population size

    3,285,874

  • Ease of doing business

    Easy

  • Cost of living index

    N/A

  • Payroll frequency

    Monthly

  • VAT - standard rate

    11.5%

  • GDP - real growth rate

    -3.9% (2020)

Puerto Rico is a Caribbean island and an unincorporated territory of the United States. This vibrant island boasts pristine rainforests, hundreds of miles of tropical beaches, a rich history filled with fabled pirates and transoceanic trade (Puerto Rico has a particularly strong coffee industry).

Puerto Ricans are proud of their national identity and their own unique local culture. The island’s capital of San Juan is brimming with vibrant nightlife. Restaurants, shops, hotels, and cafes make this a perfect place for digital nomads to stop and sample island life – as long as they have the correct legal right to work!

Grow your team in Puerto Rico with Remote

Looking to hire employees in Puerto Rico? Companies hiring in Puerto Rico must either own a local legal entity or work with a global employment platform like Remote that can legally provide employment services in the country.

Remote can employ team members in Puerto Rico and keep you compliant at all times. Remote can hire, onboard, and pay your team in Puerto Rico so you don't have to set up local HR services in the region. to get started or talk to an expert for more details.

Risks of misclassification

Puerto Rico, like many other countries, treats self-employed individuals or contractors and full-time employees differently. Misclassification of contractors in Puerto Rico may lead to fines and penalties for the offending company.

Employing in Puerto Rico

Workers rights in Puerto Rico are covered by American Law and the Puerto Rican Constitution, both of which guarantee equal pay for equal work and protections against discrimination based on age, religion, gender expression, and race.

Common questions that could come up during the hiring process include the 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 Puerto Rico.

Minimum wage

The Puerto Rican minimum wage is currently fixed at $9.50 per hour.

Want to see and manage all holidays? Sign up for our free HRIS!

Effortless HR in Puerto Rico: Take the Tour

Seamlessly Manage Your Workforce, from First Hire to Final Paycheck

Competitive benefits package in Puerto Rico

At Remote, we’re passionate about helping you craft the best possible employee experience for your team. We are leading the way in developing globally competitive benefits programs. This means making sure employees everywhere have access to both the required and supplemental benefits they need to thrive, and your company has the localized expertise required to attract and keep the best global talent.

Our benefits packages in Puerto Rico are tailored to fulfill the local needs of 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 Puerto Rico

Learn how employment taxes and statutory fees affect your payroll and your employees’ paychecks in Puerto Rico.

  • 6.2%

    FICA Social Security (Federal)

  • 1.45%

    FICA Medicare (Federal)

  • 0.90%

    FICA Medicare (Federal- additional for excess of 250,000USD (for a married couple filing a joint return), 125,000 USD (for a married individual filing a separate return)

  • 6.00%

    FUTA (Federal Unemployment Tax)

  • 1.40% - 5.40%

    SUTA (State Unemployment Tax)

  • 2.90%

    SUTA New Employer Tax

Types of leave

Annual leave in Puerto Rico depends on an employee’s tenure, and it works out as follows:

  • Up to one year of employment: six days of annual leave

  • 1 - 5 years of employment: nine days annual leave

  • 5 - 15 years of employment: 12 days of annual leave

  • 15+ years of employment: 15 days of annual leave

Annual time off also only applies to non-exempt employees.

Employment termination

Termination process

In line with Puerto Rico’s Unjust Dismissal Act, permanent employees (i.e. those employed on an indefinite-term contract) can only be terminated for “just cause” otherwise, they’ll be entitled to severance pay by the employer.

Notice period

There’s no mandatory notice period in Puerto Rico.

Severance pay

Severance benefits in Puerto Rico are determined by when an employee was hired, that is:

  • Severance for workers employed on or before 26 January 2017 is equal to three months’ salary plus two weeks’ pay for each year of service.

  • The same calculation applies to workers hired after 26 January 2021 although their severance compensation is limited to nine months’ pay.

Probation periods

Probation periods in Puerto Rico range from nine months for general employees to 12 months for managerial positions and executives.

Fair Pricing in Puerto Rico

Employer of Record

Hire and pay your global team

Starting at $599/month

Top features

  • Satisfaction guaranteed

  • No deposits or hidden fees

  • Zero onboarding or offboarding fees

  • Compliant equity incentives support including withholding and reporting

  • Built-in security and compliance

  • Fast onboarding (average 2-3 days)

  • Flexible, localized benefits

Contractor Management

Compliantly onboard and pay contractors

$29

per contractor/month

Start free trial

Top features

  • Only pay for contractors you actively work with

  • Work with contractors in 200+ countries

  • Create, edit, and sign tailored, localized contracts

  • Approve contractor invoices with one click or auto-pay

  • Transparent payments with complete visibility

Global Payroll

Consolidate your multi-country payroll

$50

per employee/month

Top features

  • Reduce costs by centralizing payroll management

  • Ensure local compliance for every country

  • Direct support from in-house local payroll experts

  • Accurate, on-time, compliant payroll to level-up your employee experience

  • Tax and labor authority reporting handled for you

HRIS

Manage all of your employees in one place

Free
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Top features

  • Guided onboarding and offboarding

  • Employee profile and document management

  • Time and attendance (time off and tracking)

  • Expense management and reimbursement

  • Employee self-serve on the platform and mobile app