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Employer of Record Guatemala
Hire staff and expand your business in Guatemala with our fully-managed EOR Service
How we can help
Unrivalled Employer of Record Service in Guatemala designed to expand your business seamlessly
Agility EOR delivers services for business’s looking for an Employer of Record in Guatemala. We help clients hire new employees or transfer existing employees into a fully-managed EOR service.
We appreciate that each situation and business is different. That is why our personal approach to Employer of Record Services in Guatemala takes care of all HR, payroll, recruitment and compliance head aches, and allows you to do what you love best – driving your business forward.
Employer of Record in Guatemala
A Brief Guide to Guatemala
Nested between Mexico and the rest of Central America, Guatemala is a vibrant country with rich indigenous heritage and fascinating historical sites. With a remarkable geographical diversity, it houses volcanoes, rainforests, and ancient Mayan sites.
Category | Information |
Location | Central America |
Capital City | Guatemala City |
Official Languages | Spanish |
Area | 108,889 km² |
Population | Approx. 19 million |
Currency | Guatemalan Quetzal (GTQ) |
Major Cities | Guatemala City, Mixco, Villa Nueva, Quetzaltenango |
GDP | Approx. $76 billion (2022) |
Major Industries | Agriculture, Textiles, Chemicals, Petroleum, Metals, Rubber |
Business Culture
Business Culture in Guatemala
Guatemala is characterized by a diverse business culture, heavily influenced by both indigenous values and Western practices. The business etiquette in Guatemala highlights respect, formal introductions, and often a relaxed approach to time. Spanish is the language of business, with meetings typically commencing with light conversations. Trust and personal relationships are vital components in Guatemalan business dealings, therefore, investing time in building relationships can lead to fruitful ventures.
Payroll and Taxes
Payroll and Taxes in Guatemala
Guatemala has a legally mandated 13th and 14th month bonus, usually paid as a mid-year and Christmas bonus. These bonuses are equivalent to one month of salary each.
Employee Taxation
In Guatemala, income tax rates are progressive, with higher income levels subject to higher tax rates.
Gross Annual Salary (GTQ) | Tax Rate (%) |
Up to 300,000 | 5% |
Over 300,000 | 7% |
Employer Taxation
Employers in Guatemala are also responsible for contributions towards social security, paid at the following rate:
Fund Type | Contribution (%) |
Social Security | 12.67% |
Pension and Healthcare
Guatemala Pensions
Guatemala’s pension system is a mixed scheme – it combines pay-as-you-go and capitalization. The Guatemalan Social Security Institute (IGSS) and private pension fund companies administer these schemes. Employers and employees both contribute to the pension fund, which is later utilized by employees post-retirement. The pension system is fundamentally based on individual savings, meaning the more an individual contributes throughout their working life, the higher the pension will be.
Healthcare in Guatemala
Guatemala’s healthcare system comprises both public and private sectors. The public healthcare system is administered by the Ministry of Public Health and Social Assistance and the Guatemalan Social Security Institute, providing services from primary care to specialized hospital care. However, the public system faces challenges in terms of accessibility, especially in rural areas, and quality of care.
The private healthcare sector in Guatemala is quite developed, offering high-quality care mainly in urban areas. Many Guatemalans prefer private healthcare due to the convenience and quality it offers, despite it being costlier than public healthcare.
Employment Law
Employment Law in Guatemala
Relevant Legislation: Guatemala’s labor law is primarily governed by the Labor Code of Guatemala (Código de Trabajo), which ensures worker rights and sets forth employer obligations. Other key laws include the Social Security Law and the Law for the Promotion and Comprehensive Development of Women.
Employment Contracts: Employment contracts in Guatemala can be for a fixed term or indefinite duration. While verbal contracts are valid, written contracts are advisable for clarity and must be used for fixed term contracts. These contracts must stipulate working conditions, including salary, job description, working hours, and termination conditions.
Working Hours: The standard work week in Guatemala is 44 hours, usually split over 5 days, with a maximum of 8 hours work per day. Employees are entitled to a rest period of at least 24 consecutive hours after 6 consecutive working days.
Leave: Employers are required to provide 15 working days of paid vacation leave after a year of continuous employment. Maternity leave is also mandated, with 84 days of paid leave.
Overtime: Overtime work is considered when the employee works more than the standard working hours in a day. It should not exceed four hours daily or 12 hours weekly and should be compensated with a 50% salary increase over the regular rate.
Termination: Employers can terminate employees for reasons such as serious misconduct or non-performance. In some cases, employers may also terminate employees due to economic, technological or structural reasons.
Notice: If an indefinite term contract is being terminated, employers must provide a written notice period of at least 30 days.
Severance Pay: If a worker is dismissed without just cause, the employer is required to provide severance pay. This is usually a month’s wages for each year of service or a proportion thereof for less than a year.
IMMIGRATION
Work Permits in Guatemala
Immigration matters in Guatemala are primarily governed by the Guatemalan Immigration Directorate, an arm of the Ministry of the Interior. The immigration system follows a structured process that begins with the submission of an application for the appropriate visa or permit, supported by the requisite documentation. The process typically involves extensive scrutiny and may require some time for final approval.
Guatemala offers a range of visas tailored to different purposes and durations of stay. The most commonly issued types are:
- Business Visa: The Business visa is for those engaging in business-related activities, meetings, or negotiations. The stay duration may vary depending on the visa specifics.
- Work Visa: This visa is for individuals intending to work in Guatemala. The employer usually initiates the application on behalf of the foreign employee. This visa requires proof of employment, documents demonstrating the qualifications of the employee, and registration of the employer.
- Student Visa: For individuals intending to study in Guatemala, a Student Visa is required. This visa requires proof of enrollment from the educational institution in Guatemala.
- Residency Visa: For individuals intending to reside in Guatemala, either temporarily or permanently, the Residency Visa is applicable. This type requires more extensive documentation, including proof of financial means and a clear criminal record.
The specifics of each visa, including the precise documentation required, duration of validity, and rights conferred, can vary, so it is recommended to consult with a legal expert or the Guatemalan Immigration Directorate for the most accurate information. Foreign nationals should ensure they have the correct visa type for their intended activities in Guatemala to avoid legal complications.
Keep in mind that all non-residents planning to stay in Guatemala for an extended period need to register with the Guatemalan Immigration Directorate within the first few days of arrival.
Public Holidays
Guatemala Public Holidays
Holiday Name | Date |
New Year’s Day | January 1 |
Holy Thursday | Variable (late March – early April) |
Good Friday | Variable (late March – early April) |
Holy Saturday | Variable (late March – early April) |
Easter Sunday | Variable (late March – early April) |
Labor Day | May 1 |
Army Day | June 30 |
Independence Day | September 15 |
Revolution Day | October 20 |
All Saints’ Day | November 1 |
Christmas Day | December 25 |
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The Benefits
Guatemala Employer of Record Benefits
When you choose Agility EOR to expand in Guatemala, we guarantee an Employer of Record Service tailored to the needs of your business
Compliance
We are on top of regulatory changes in Guatemala so you can relax.
Cost reduction
Allow our economies of scale to work in your favour.
High Service Levels
You and your employees have a dedicated account manager.
Fixed Cost Pricing
We will agree our professional fees up front based on your needs - no nasty surprises!
Consolidated Invoicing & Payments
Make one monthly payment to cover all your tax, social and wages costs from one to one thousand employees.
Fast delivery
You can have 'boots on the ground' within days on our infrastructure.
Reduced Risk
All wage taxes are remitted in full to the Guatemalan authorities by professionals ensuring liabilities are met, giving you peace of mind.
Supply Chain Transparency
We only pay employees through local full employed solutions meaning Guatemala payroll tax is paid on all funds.
Save Time and Money
Our expertise is at your disposal. The need for you to have internal HR, Payroll and admin staff is eliminated.