Employer of Record El Salvador
Hire staff and expand your business in El Salvador with our fully-managed EOR Service
How we can help
Unrivalled Employer of Record Service in El Salvador designed to expand your business seamlessly
Agility EOR delivers services for business’s looking for an Employer of Record in El Salvador. We help clients hire new employees or transfer existing employees into a fully-managed EOR service.
Employer of Record in El Salvador
A Brief Guide to El Salvador
El Salvador, the smallest and the most densely populated country in Central America, is known for its breathtaking landscapes of volcanoes, beaches, and Mayan ruins. It might be tiny on the map, but the opportunities for business expansion are broad and diverse.
Approx. 6.5 million
U.S. Dollar (USD)
Santa Ana, San Miguel, Soyapango
Approx. $27 billion
Food processing, beverages, petroleum, chemicals, fertilizer, textiles, furniture, light metals
Business Culture in El Salvador
In El Salvador, business is all about personal relationships. The value of trust and rapport shouldn’t be underestimated when considering business collaborations or employment. Meetings might not always start on time due to the slower pace of life, but punctuality is a respected trait. The business attire is usually conservative, with due respect given to hierarchy and seniority.
Payroll and Taxes
Payroll and Taxes in El Salvador
In El Salvador employees are paid a 13th month salary after a year of service with their employer. The amount is between 15 and 21 days of salary, rising in line with the length of service, and is usually paid in December.
In El Salvador, income tax rates are progressive, with higher income levels subject to higher tax rates.
Gross Annual Salary (USD)
Tax Rate (%)
Up to $4,064
$4,064.01 – $9,142.86
10% + $212.12
$9,142.87 – $22,857.14
20% + $720
30% + $3462.86
Employers in El Salvador are also responsible for various employer costs, which may include:
Social Security (ISSS)
7.5% (monthly taxable salary capped at $1,000)
Death & Pension Fund (AFP)
8.75% (monthly taxable salary capped at $7,045.06)
INSAFORP Vocational Training Levy (for employers with over 10 employees)
1% (monthly taxable salary capped at 1%)
Pension and Healthcare
El Salvador Pensions
In El Salvador, pensions are primarily managed by private pension fund administrators known as AFPs. The system operates on a defined contribution basis, with employers and employees contributing a specified percentage of salary into the fund. The government does provide a minimal pension for those in extreme poverty or those who haven’t contributed enough to qualify for a private pension.
Healthcare in El Salvador
El Salvador’s healthcare system consists of a mixture of public and private providers. The Ministry of Health provides public healthcare services, funded by general taxes, offering universal coverage with a focus on preventive care. These services are accessible but can be stretched due to high demand and resource constraints, leading to long wait times.
On the other hand, private healthcare facilities, typically centered in urban areas, offer faster access to specialists and advanced treatments but at a higher cost. Private healthcare is often utilized by those who can afford it or those with private health insurance. Overall, the quality of care can vary, with the private sector generally offering higher standards of service and facilities than the public sector.
Employment Law in El Salvador
Relevant Legislation: The main legislation governing employment law in El Salvador is the Labor Code (Codigo de Trabajo). This comprehensive code outlines all matters relating to employment, including working hours, leave, contracts, termination, and other related issues.
Employment Contracts: Employment contracts in El Salvador can be either written or verbal. However, for clarity and protection of both parties, written contracts are recommended. They typically specify the terms and conditions of employment, including the role, remuneration, working hours, and leave entitlements.
Working Hours: The standard working week in El Salvador is 44 hours, typically spread over 5.5 days, with Sunday being a mandatory day off. The Labor Code establishes a maximum of 8 hours per day for day workers and 7 hours for night workers.
Leave: Employees in El Salvador are entitled to annual leave after a year of continuous service. The Labor Code grants 15 days of paid vacation for every year of service. Also, the country observes several paid public holidays.
Overtime: Overtime is defined as any work beyond the standard 44-hour work week. Legally, overtime should not exceed 12 hours per week. It is usually compensated at a rate of 100% above the standard wage for every extra hour worked.
Termination: An employer can terminate an employee for a variety of reasons as outlined in the Labor Code, which may include misconduct, poor performance, or economic necessity. Both the employer and employee are required to comply with the termination procedures set out in the Labor Code.
Notice: In cases of termination for cause, no notice period is required. However, in instances of redundancy or no fault terminations, employers are generally required to give 30 days’ notice or pay in lieu of notice.
Severance Pay: Upon termination of the employment relationship, unless it’s for just cause, employees are usually entitled to receive severance pay. The amount is typically calculated based on the length of service, with the Labor Code providing clear guidelines on the calculations.
Work Permits in El Salvador
Immigration in El Salvador is administered by the General Directorate of Migration and Foreigners. The system is structured to manage and regulate the entry, stay, and exit of foreigners. The immigration procedures can vary depending on the country of origin, the purpose of visit, and the duration of stay.
For people looking to work in El Salvador, the most common visa types include the Temporary Resident Visa and the Permanent Resident Visa. Temporary Resident Visas are often granted to individuals who intend to reside in the country for a certain period, typically for work purposes. A Permanent Resident Visa is for those who intend to make El Salvador their home indefinitely.
El Salvador Public Holidays
New Year’s Day
Day of the Cross
San Salvador Day
All Saints’ Day
Day of the Soldier
Wondering if expanding
in El Salvador is right for you?
Read on or speak to a member of our team now
El Salvador Employer of Record Benefits
When you choose Agility EOR to expand in El Salvador, we guarantee an Employer of Record Service tailored to the needs of your business