How to hire remote employees in

Nicaragua

Want to hire someone in Nicaragua? But…maybe a little confused on how you’re supposed to go about it? Perfect. On this page, we’ll teach you how you can hire remote talent in Nicaragua without wading into a months-long procession of legal paperwork, fees, and fines.

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Employment requirements

Country snapshot

CURRENCY

Nicaraguan Córdoba (NIO)

EMPLOYER TAXES

up to 22.5%

PAYROLL FREQUENCY

Monthly

OFFICIAL LANGUAGE

Spanish, English

Why hire independent contractors in Nicaragua

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 Nicaragua.

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 Nicaragua 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 Nicaragua

Nicaragua’s got lots of great remote talent, and it’s no surprise you’ve found someone to hire there (or that you’re considering it). While labor laws are different, the two types of talent, employees and contractors, are the same. Here’s what to know before you make a final decision on either one.

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

Hire talent as contractors

Laws about hiring contractors are significantly more simple in Nicaragua. 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 Nicaragua 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 Nicaragua

If you’re hiring contractors in Nicaragua, 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 Nicaragua

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

Taxes in Nicaragua

Employer tax

Pension and Disability (less than 50 employees)

Pension and Disability (more than 50 employees)

Health Insurance

Labor Healthcare

War Victims

Leave

Paid Time Off (PTO)

PTO is calculated by the:

Employees who have completed at least 6 months to 1 year of employment are entitled to 15 days of paid leave.
After 1 year of employment, the employee is entitled to 30 days of paid leave.

Public Holidays

There are 9 public holidays.

Sick Days

The duration of sick leave entitlement provided to workers is dependent on how long they have been employed by their employer:

Sick leave is paid from the 3rd day of illness and the benefit is for up to 6 months and is covered by social security.
Pay for sickness is 60% of the regular wages.
However, if the employee is hospitalized, the 3 day waiting period is waived.

Maternity Leave

Maternity leave is 12 weeks and is paid at the rate of 100% of the regular wages in which 60% of this is paid by the employer and 40% is paid by social security. Maternity leave can begin 4 weeks from the expected due date.

For multiple births, maternity leave is extended to 14 weeks.

Paternity Leave

Fathers are entitled to 5 business days of paid leave.

Parental Leave

There is no statutory law on parental leave in Nicaragua.

Other Leave

None.

Marriage Leave

None.

Bereavement Leave

None.

Termination

Termination Process

To terminate employees, employers must request for termination from the labor inspection department.

At the time of dismissal, the employee is entitled to remaining vacation pay and their annual bonus. Notice of termination is also required.

Notice Period

The notice period in Nicaragua is:

Employees must provide 15 days notice.

Severance Pay

The employer must pay severance when the employee is terminated for an unjust cause.

The severance pay is calculated at one month’s salary for the first 3 years of employment and 20 extra days of wages for every year after.

Severance is capped at 5 months in payments.

Probation Period

The probation period is 30 days, during which either party can terminate the employment agreement for any reason.

Employee requirements in Nicaragua

Working Hours

The working hours depends on the hours of the day:

Day work between the hours of 6 am and 8 pm- A typical workday is 8 hours or a maximum of 48 hours per week

Night work between the hours of 8 pm and 6 am- A typical workday is 7.5 hours or a maximum of 45 hours a week.

Overtime

Overtime pay is paid at a rate of 200%.

For work over a weekend or holiday, the employee is entitled to a 24–hour rest period in lieu.

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