Employer of Record Ecuador
Hire staff and expand your business in Ecuador with our fully-managed EOR Service
How we can help
Unrivalled Employer of Record Service in Ecuador designed to expand your business seamlessly
Agility EOR delivers services for business’s looking for an Employer of Record in Ecuador. We help clients hire new employees or transfer existing employees into a fully-managed EOR service.
Employer of Record in Ecuador
A Brief Guide to Ecuador
Welcome to Ecuador, a beautiful gem nestled on the western coast of South America. Known for its diverse landscape and rich cultural history, Ecuador is the gateway to the equator and boasts of bustling urban cities, and tranquil countryside landscapes.
Approx. 18 million (2023 estimate)
US Dollar (USD)
Quito, Guayaquil, Cuenca
Approx. $110 billion (2023 estimate)
Petroleum, Food Processing, Textiles, Metal Work
Business Culture in Ecuador
In Ecuador, relationships are key to successful business dealings. Respect and trust are built over time, so don’t be surprised if initial meetings are more about getting to know you than immediate business. It’s important to have Spanish-speaking capabilities within your team as Spanish is the official language. Punctuality is valued, but meetings often start and finish late by international standards. Formal dress is the norm, so think suits and ties.
Payroll and Taxes
Payroll and Taxes in Ecuador
In Ecuador it is mandatory to make 13th and sometimes 14th month salary payments. The 13th month payment is equivalent to the employee’s monthly wage, and is usually paid in December. The 14th month payment is a fixed amount of a monthly minimum wage, which is adjusted annually by the Ecuadorian government. In 2023 this amount it $450.
In Ecuador, income tax rates are progressive, with higher income levels subject to higher tax rates.
Gross Annual Income (USD)
Tax Rate (%)
Up to $11,722
$11,723 – $14,935
$14,936 – $18,666
$18,667 – $22,418
$22,419 – $32,783
$32,784 – $43,147
$43,148 – $53,512
$53,513 – $63,876
$63,877 – $103,644
Employers in Ecuador are also responsible for various employer costs, which may include:
Education and Training Levy
Pension and Healthcare
Ecuador has a social security system that includes pension provision. The Ecuadorian Social Security Institute (IESS) administers these pension schemes. Both employers and employees contribute to the pension fund, with the employer contributing a significantly larger proportion. Self-employed people also have the option to contribute to the pension fund.
Healthcare in Ecuador
In Ecuador, the public healthcare system is predominantly funded by the state, with funds coming from taxes and social security contributions. However, the system is tiered, with those contributing to the Ecuadorian Social Security Institute (IESS) receiving a higher level of care.
Despite the universal public healthcare, many residents and expats also maintain private health insurance. This provides access to private hospitals and clinics, which often offer shorter waiting times and more comfortable facilities. However, the quality of both public and private healthcare can vary significantly, especially between urban and rural areas.
Healthcare professionals in Ecuador are generally well-trained, particularly in larger cities. Many doctors in urban areas have received at least part of their training abroad and may speak English.
Employment Law in Ecuador
Employment in Ecuador is regulated by the Labour Code of Ecuador, known as the ‘Código del Trabajo’. Apart from the ‘Código del Trabajo’, other regulations also apply. For instance, the ‘Ley de Seguridad Social’ governs social security matters, and the ‘Código Civil’ may also apply to certain contractual issues.
Employment Contracts: While oral agreements are technically legal, it is highly recommended to always use a written contract. These contracts should specify salary, benefits, duration of the contract (if applicable), and the job’s description.
Working Hours: While the standard workweek is 40 hours, in practice, many employees in certain sectors may work more. However, any work exceeding the standard 40 hours is considered overtime.
Leave: Apart from the 15 days of paid annual leave, Ecuadorian law also stipulates that female employees are entitled to a 12-week maternity leave. Paternity leave is also recognized, with new fathers entitled to 10 days off.
Overtime: Overtime is compensated at a rate of 1.5 times the normal salary rate for the first four hours, and twice the rate for any hours exceeding this.
Termination: Grounds for dismissal include neglect of duties, dishonesty, and regular intoxication. The employer must prove the existence of a valid cause to the Labour Inspectorate. Failure to do so may result in the employee being reinstated or the employer having to pay compensation.
Notice: The required notice period depends on the duration of the contract. For indefinite contracts, a 15-day notice is required. For fixed-term contracts, no notice is required if the contract is ending on its agreed termination date.
Severance Pay: Severance pay depends on the duration of the contract and the reason for termination. It generally ranges from three to twelve months’ wages.
Work Permits in Ecuador
The Ministry of Human Mobility is responsible for overseeing immigration. There are several types of visas available, such as:
- Temporary Residency Visa: Granted for two years and can be renewed. This visa allows the holder to work.
- Permanent Residency Visa: Can be applied for after holding a Temporary Residency Visa for at least 21 months. It allows the holder to work and stay indefinitely in Ecuador.
- Work Visa: Issued for individuals with a job offer from an Ecuadorian employer. The employer usually initiates the application.
- Student Visa: Granted to those enrolled in an Ecuadorian educational institution.
Processing times for visas can vary, and it’s always recommended to start the application process well in advance of your planned arrival in Ecuador.
Ecuador Public Holidays
New Year’s Day
Variable (February or March)
Variable (March or April)
Battle of Pichincha
Guayaquil Independence Day
Day of the Dead
Cuenca Independence Day
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Ecuador Employer of Record Benefits
When you choose Agility EOR to expand in Ecuador, we guarantee an Employer of Record Service tailored to the needs of your business