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Remote’s guide to employing in

El Salvador
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With localised contracts, easy invoice management, and best-in-class compliance, you can grow your team in El Salvador with confidence. Currently, you can hire and manage contractors in El Salvador through Remote, but our EOR services are not yet live.

  • Capital City

    San Salvador

  • Currency

    United States Dollar ($, USD)

  • Languages

    Spanish

  • Population size

    6,420,746

Services available in this country:
Contractor Management

Facts & Stats

El Salvador Map Illustration
  • Capital City

    San Salvador

  • Currency

    United States Dollar ($, USD)

  • Languages

    Spanish

  • Population size

    6,420,746

  • Ease of doing business

    Easy

  • Cost of living index

    44.57 (2021)

  • Payroll frequency

    Monthly

  • VAT - standard rate

    13%

  • GDP - real growth rate

    2.4 (2019)

El Salvador is the smallest and most densely populated Central American nation and it’s known as the land of volcanoes, with frequent earthquakes and volcanic activity.

It has the lowest income inequality in Latin America and doubles as the easiest place to do business in the region.

El Salvador is a strong agricultural economy buoyed by exports of sugarcane, coffee, and over $2.5 billion in textile exports. Lately, it has become even more interesting being the only country to adopt Bitcoin as legal tender in the world.

Grow your team in El Salvador with Remote

You can pay contractors now in El Salvador with Remote in some currencies (talk to an expert now for full details).

Note that we are busy building our own entity in El Salvador 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 El Salvador, 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 El Salvador can get complicated fast, especially without localised 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

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

Employing in El Salvador

Workers' rights in El Salvador are protected by:

  • The Salvadoran Constitution of 1983,

  • The Civil Code of 1859, and

  • The Labor Code of 1972

— all 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 El Salvador.

Competitive benefits package in El Salvador

At Remote, we’re obsessed with helping you craft the best possible employee experience for your team. We are leading the way in practising “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 El Salvador, but our benefits packages for all countries are tailored to fulfil 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 El Salvador

Learn how employment taxes and statutory fees affect your payroll and your employees’ paychecks in El Salvador.

  • 0-1%%

    National Institute of Professional Development i.e. INSAFORP (payable by employer with up to 10 Salvadoran employees; not payable for each employee earning $1,000+)

  • 7.5%

    Social security (charged on salaries of up to $1,000 per month; employers pay a flat rate of $51.49 per month for each employee earning $1,001+ per month)

  • 7.75%

    Pension contributions

Types of leave

Salvadoran employees are entitled to 15 days of paid leave every year. Paid vacations are counted from December 12 to December 12 of following years and employees must use their vacation or forfeit it — payment cannot be made in lieu of unused vacation.

Employment termination

Termination process

Employers can generally terminate workers at will by providing advance notice and making any required severance payments. This provision only employees to regular employees as workers on probation can be dismissed summarily.

Notice period

Notice periods are determined by either collective agreement or on a case-by-case basis (i.e. independently agreed upon by employers and their employees).

Severance pay

Severance payments under Salvadoran law is usually a month’s pay for every year worked.

Probation periods

Probation periods are limited to 30 days.

Fair Pricing in El Salvador

Contractor Management

Compliantly onboard and pay contractors

US$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, localised contracts

  • Approve contractor invoices with one click or auto-pay

  • Transparent payments with complete visibility

Global Payroll

Consolidate your multi-country payroll

US$50

per employee/month

Top features

  • Reduce costs by centralising 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 labour authority reporting handled for you

HRIS

Manage all of your employees in one place

Free
Sign up

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