How to hire remote employees in

El Salvador

Central America is filled with great remote talent, and El Salvador is no exception. If you’ve found someone great in El Salvador that you want to bring onto the team, you’re in the right place. We’ll explain exactly what you need to know about hiring remotely in El Salvador: Legal obligations, risks, and your easiest path to making the hire.

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Employment requirements

Country snapshot

CURRENCY

United States Dollar (USD)

EMPLOYER TAXES

15.25%

PAYROLL FREQUENCY

Monthly

OFFICIAL LANGUAGE

Spanish

Why hire independent contractors in El Salvador

Hiring contractors is normally the easier, faster, more flexible choice—but don’t just take it from us. Below are the specific benefits and drawbacks to hiring contractors in El Salvador.

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

HHiring contractors in El Salvador means you’re generally not on the hook for things like health insurance and paid time off. This makes hiring flexible for you, and it gives your talent more options.

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.

What to know before you hire in El Salvador

Naturally, you might be a bit confused about labor and tax laws abroad. It can be confusing—El Salvador has different laws than your home country, which complicates things. So let’s cover your options.

If you want to successfully hire in El Salvador, you have two options:

Hire talent as contractors

Laws about hiring contractors are significantly more simple in El Salvador. Onboarding talent takes days, not weeks or months. Both you, the company, and your talent have more flexibility. And in many cases, since you’re remote, the talent you’re hiring is better classified as a contractor, anyway. Of course, it’s not possible in every case, but it’s what we built Thera for.

Hire talent as employees

This is the long route. You can either establish a physical presence with an entity and register as an employer, or you can use an Employer-of-Record (EOR) solution. Odds are, you’ll find using an EOR to be the easier route. Still, using an EOR in El Salvador is expensive—it can often be $500 per month per employee—and sometimes prone to lengthy onboarding times.

Hire contractors in a couple clicks with Thera

How can I pay people in El Salvador

If you’re hiring contractors in El Salvador, you can pay them with Thera in a single click. You won’t need to worry about complicated wire transfers, fees, or currency conversions. We’ll take care of it all. Just make a click and your contractor will get paid in their currency of choice. This is a valuable bonus for talent in countries where the local currency is particularly weak—most people appreciate the ability to receive their payment in stronger currencies.

If you want to hire employees in El Salvador

If you’ve read up until this point, you’ll know that it’s easier, cheaper, and more flexible to hire contractors in El Salvador 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 El Salvador.

Taxes in El Salvador

Employer tax

Employer Contributions

15.25%

Leave

Paid Time Off (PTO)

If an employee has been employed for at least 1 year, they are entitled to 15 days of paid annual leave. Annual leave is calculated from December 12-December 12. Unused vacation days cannot be paid out, the employee must enjoy all of their vacation days within the year.

Public Holidays

There are 11 public holidays in El Salvador.

Sick Days

The amount of pay and leave depends on the total time an employee has worked for the employer.

1 year or more – 75% of the basic salary for 60 days
5 months but less than a year – 75% of the basic salary for 40 days
1 month but less than 5 months – 75% of the basic salary for 20 days

Maternity Leave

In El Salvador, a woman is entitled to a total of 16 weeks of paid maternity leave at the rate of 75% and is paid by social security. 6 of the weeks can be taken before the expected due date and 10 weeks after the birth of the child.

If the mother becomes temporarily disabled due to the pregnancy, she may be entitled to 100% of the regular pay. This is granted by social security to those who paid their contributions.

In addition, if the woman experience complications during the pregnancy, the woman may be entitled to additional rest. After the 4th month of pregnancy, the woman cannot be assigned to physical work.

Lastly, the woman must present medical documentation to their employer stating their pregnancy status and expected due date.

Paternity Leave

Fathers receive 3 days of paternity leave paid at 100% of the regular pay and can be used within the first 15 days of the birth of the child.

Parental Leave

There are no provisions in the law.

Other Leave

None.

Marriage Leave

None.

Bereavement Leave

None.

Termination

Termination Process

For individual dismissals, an employer must provide a written termination letter stating the reason for the dismissal. Otherwise, the dismissal is considered void.

Notice Period

Notice period is not required by law.

Severance Pay

Compensation is only required when an unjustified dismissal occurs. For cases in which a labor court deems a dismissal unfair, the employee is entitled to pay from the date of the dismissal as well as severance pay. Severance pay is 30 days’ salary for each year worked.

Probation Period

Probation cannot be more than 30 days.

Employee requirements in El Salvador

Working Hours

In El Salvador, a full work week is 44 hours or 6 hours per day.

Overtime

Overtime is paid at the rate of 200% of the regular pay.

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