Facts & Stats
- Capital city
United States Dollar ($, USD)
Spanish and English
- Population size
- Ease of doing business
- Cost of living index
- Payroll frequency
- VAT - standard rate
- GDP - real growth rate
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
Note that we are busy building our own entity in Puerto Rico to provide you with the best possible employment solutions for your employees, but our employer of record service is not yet live in this country.
To employ in Puerto Rico, companies must own a local legal entity in the country or work with a global employment solution. Developing the processes required to manage payroll, benefits, taxes, and onboarding in countries like Puerto Rico can get complicated fast, especially without localized expertise.
If you’re looking to start hiring in a country like this, partnering with a global employment solution like Remote makes it easy for your company to employ workers quickly, cost-effectively, and in full compliance with all local legislation.
In the countries where we do offer our EOR services, Remote takes on the responsibility and legal risks of international employment so you can focus on hiring great talent and growing your business.
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.
The Puerto Rican minimum wage is currently fixed at $8.50 per hour.
Competitive benefits package in Puerto Rico
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).
We are still busy building our own entity in Puerto Rico, but our benefits packages for all countries are tailored to fulfill the local needs of your employees. Typically, our packages contain some or all of the following benefits:
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.
FICA Social Security (Federal)
FICA Medicare (Federal)
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)
FUTA (Federal Unemployment Tax)
1.40% - 5.40%
SUTA (State Unemployment Tax)
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
In line with Puerto Rico’s Unjust Dismissal Act, full-time 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.
There’s no mandatory notice period in Puerto Rico.
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 in Puerto Rico range from nine months for general employees to 12 months for managerial positions and executives.