Ecuador
Ecuador’s got rich culture, great food, and incredibly talented people who want to work remotely. If you’ve found someone you’d like to hire in Ecuador but aren’t sure exactly how to go about it, you’re in the right place. On this page, you’ll learn about how to hire talent in Ecuador—without spending months and thousands of dollars getting set up.
Country snapshot
CURRENCY
United States Dollar (USD)
EMPLOYER TAXES
Up to 19.48%
PAYROLL FREQUENCY
Monthly
OFFICIAL LANGUAGE
Spanish
It’s the fastest way to hire globally
Hiring employees takes months, at the minimum. When you hire with Thera's locally-generated contracts, it’s a matter of days or weeks. This means you can hire the best talent, fast, without losing them to a hellish procession of paperwork.
It’s a lot cheaper
It costs just $0 to sign up for Thera, then $25 per month to hire your contractors with Thera. If you hired employees manually (or did contracting on your own), you’d likely be on the hook for thousands of dollars each month. Setting up an entity alone can cost tens of thousands of dollars.
It’s more flexible for you & your team
Can be less risky than hiring employees
Hiring employees is a bigger commitment, and can open you up to increased liabilities and regulations. When you hire contractors overseas, your biggest risk is misclassification—but laws surrounding contractor classification are often significantly more straightforward.
Some people want to be employees
The contractor life isn’t for everyone—some people want the security that being an employee often appears to provide. Though it’s rare, this does happen, and it’s one disadvantage of manage an all-contractor team.
You might not have as much control over your talent
Most countries’ contractor-employer relationship laws stipulate that the employer can’t set fixed working hours, among other things. These laws give contractors more freedom over how and when they do their work than an employee would have. In reality, however, most contractors are willing & able to work on the company’s schedule—it’s a matter of setting expectations beforehand.
No matter where you’re from, Ecuador’s labor laws are different from the laws in your home country (unless you’re from Ecuador, that is). Here’s the difference between hiring employees and contractors in Ecuador.
Hire talent as contractors
Hire talent as employees
If you’ve read up until this point, you’ll know that it’s easier, cheaper, and more flexible to hire contractors in Ecuador than employees. Still, there are valid reasons why you might want to hire employees instead. The content below is for you—we’ll cover employer taxes and obligations in Ecuador.
Employer tax
Employer Contributions
- Up to 19.48%
Paid Time Off (PTO)
Employees receive 15 days of paid leave annually. After five years of continuous service, an additional day is given per year.
Public Holidays
There are 12 public holidays.
Sick Days
Employees who have 180 days of continuous contribution to the Ecuadorean Social Security Institute (IESS) within 6 months prior to the onset of illness, or 189 days of continuous contribution within 8 months prior to the onset of illness.
Employees who are covered are paid by the employer for the first three days and covered by IESS for the remainder.
Maternity Leave
New mothers are entitled to maternity leave of 12 weeks; 2 weeks before birth and 10 weeks after birth. Payment is shared by the social security and the employer. Social security pays 75%, the employer pays 25%. 10 days are added for additional births.
Paternity Leave
New fathers are entitled to 10 days of paternity leave, 15 days for cesarean or multiple births, or 18 days for babies who are premature or require special care. 25 additional days are added for severe disability or illness.
Parental Leave
No statutory regulations.
Other Leave
Hospitalization Leave: each parent is entitled to 25 days’ leave if their child is hospitalized.
Marriage Leave
None.
Bereavement Leave
1 day of paid leave for the death of a 1st or 2nd-degree relative.
Termination Process
Contracts can be terminated with just cause without severance (with approval from labor authority) for Lack of discipline, dishonesty, serious offense against the employer, serious incompetence, or Non-compliance with regulations. Otherwise, 30 days notice is required.
Notice Period
There is no statutory notice period, it is usually something that is agreed upon in the employment contract.
Severance Pay
If employees are not given notice, they are entitled to receive one paycheck for every year employed by the company, with a maximum of 25 months of payments. Additionally, a sudden dismissal bonus is offered at 25% of monthly wages for each year employed. For over 20 years of employment, the employee is entitled to a retirement pension.
Probation Period
3 months.
Working Hours
Employees work 5 days per week. Normal working hours are 8 hours per day and 40 hours per week.
Overtime
Regular overtime hours are paid at the rate of 150% of the regular pay. Work performed on Saturday, Sunday, or holidays are paid at a rate of 200% of the regular pay.
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