Guatemala
Guatemala’s a great place to make a remote hire, if you know how to do it right. If you don’t, you could be unwillingly thrust into months and thousands of dollars of expenses, legal penalties, and more. But we’re going to help you avoid that on this page with information about the easiest way to hire that great talent you’ve found in Guatemala.
Country snapshot
CURRENCY
Quetzal (GTQ)
EMPLOYER TAXES
12.67%
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.
OK, so navigating a new country’s labor laws and hiring process isn’t exactly easy. It isn’t easy at all, really. You’ve got two options: You can hire talent in Guatemala as employees, or you can hire them as contractors. Each has their benefits, depending on what you’re looking for. We’ll cover the details below.
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 Guatemala 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 Guatemala.
Employer tax
Employer Contributions
- 12.67%
Paid Time Off (PTO)
Employees are entitled to 15 days of vacation after their first year of service.
Public Holidays
There are 12 public holidays.
Sick Days
Sick pay is either paid by the employer or social security, depending on the reason for the sickness, and is paid at 50% of the regular pay rate.
The length of sick pay depends on the length of employment:
- 2–6 months of employment- 1 month of paid sick leave
- 6-9 months or employment– 2 months of paid sick leave
- 9+ months or employment- 3 months of paid sick leave
- If the employee has not recovered by the time that the sick leave is over, the employment agreement is automatically suspended (“total suspension”) and all employer and employee obligations are put on hold. In this case, the employee may terminate the employment agreement, however, the employer may not unless under just cause.
- In addition, the employer may seek to fill the employee’s duties on a temporary basis which can be terminated upon the return of the employee.
Maternity Leave
Mothers are entitled to 84 days of maternity leave starting from 30 days before the expected due date.
In the event of a miscarriage or stillbirth, the mother is entitled to 42 days of paid leave.
Paternity Leave
There are no provisions in the law regarding paternity leave.
Parental Leave
There are no provisions in the law regarding parental leave.
Other Leave
Labor union leader– up to 6 days of paid leave for a member of a union’s executive committee in order to carry out union duties. Such a person may also be entitled to additional unpaid leave.
Judicial summons– half a day of paid leave.
Marriage Leave
5 days paid leave for the wedding of the employee.
Bereavement Leave
3 days paid leave in the event of the death of a spouse or child.
Termination Process
In Guatemala, there is no specific termination procedure other than providing written notice and for just cause. There are, however, some instances in which the employer must get permission to dismiss an employee:
- If the employee is pregnant or nursing
- When an employee is engaging in forming a union
Union leaders - “Collective conflict” under collective bargaining
Notice Period
The notice period varies based on the length of employment:
- Up to 6 months- 1 weeks’ notice
- 6 months- 1 year- At least 10 days’ notice
- 1-5 years- At least 2 weeks’ notice
- 5+ years- 1 months’ notice
Severance Pay
Severance payment is only granted when a court finds that an employer was dismissed without just cause. In this case, the employee is entitled to either be reinstated and back paid from the date of termination or are entitled to severance pay equal to one months’ salary for every year employed.
In addition to the above, if the employee has received any non-cash benefits such as the use of an employee car, mobile phone, food, etc., they are entitled to an additional 30% of their salary for each year of employment.
Probation Period
2-months.
Working Hours
The standard workday is 8 hours but cannot exceed 12 hours per day. However, working hours do not apply to high-level executives or domestic workers. In addition, there are some other classifications of workers that working hours don’t apply to such as caretakers, and doormen.
Overtime
Anything over 44 hours in a workweek is considered overtime and is paid at a rate of 150% of the regular pay.
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