4. Types of leave

There is no information about the types of leave for this country.
Learn more about types of leave >

Paid time off

Employees who have worked for the company for at least a year are entitled to 15 days of paid voluntary leave. The 12-month period from December 12 and December 12 is used to measure annual leave. Unused holiday days cannot be refunded; instead, the person must take all of his or her vacation days during the calendar year.

Public holidays

El Salvador recognizes 11 public holidays.

Sick days

The amount of pay and leave an employee receives is determined by the length of time they have served for the company.

For a period of one year or more, 75 percent of the minimum wage is paid for 60 days.

For a period of 5 months but less than a year, you will be paid 75% of your base salary for 40 days.

For a period of one month but less than five months, 75 percent of the minimum wage is paid for a period of 20 days.

Maternity leave

In El Salvador, a woman is entitled to a total of 16 weeks of paid maternity leave, which is paid by social security at a rate of 75%. Six weeks should be taken prior to the planned due date and ten weeks after the infant is born.

If the woman is temporarily injured as a result of the birth, she will be entitled to 100% of her normal salary. There is all that social security does to people who have paid their taxes.

Furthermore, if the woman has complications during her birth, she might be entitled to extra rest. The woman cannot be subjected to hard labor until the fourth month of pregnancy.

Finally, the woman must provide their boss with medical paperwork detailing their maternity status and anticipated due date.

Paternity leave

The amount of pay and leave an employee receives is determined by the length of time they have served for the company.

For a period of one year or more, 75 percent of the minimum wage is paid for 60 days.

For a period of 5 months but less than a year, you will be paid 75% of your base salary for 40 days.

For a period of one month but less than five months, 75 percent of the minimum wage is paid for a period of 20 days.

Parental leave

There are currently no provisions in El Salvador law regarding parental leave.

Other leave

5. Employment termination

There is no information about employment information for this country.

Termination process

Employers must issue a written termination letter outlining the basis for the dismissal for individual dismissals. Otherwise, the dismissal is regarded as null and void.

Notice period

Notice period is not required by law.

Probation period

Probation cannot be more than 30 days.

Severance pay

Compensation is only required in the event of a wrongful termination. When a labor court decides that a dismissal was unjust, the employee is entitled to compensation beginning with the day of the layoff and severance pay. Severance pay is determined on a 30-day wage basis for each year employed.

6. Working hours

There is no information about the working hours for this country.

General working schedule

A standard workweek consists of 44 hours spread over six days. Typically, employees work eight hours per day, five days a week, followed by four hours on the sixth workday. Employees who work at night or in hazardous conditions have their work hours reduced.

Overtime

Employees may work an unlimited amount of overtime, but some exceptions may apply to younger employees. Overtime is generally compensated at 200 percent of the regular rate of pay. In the event of a force majeure, overtime pay is waived.

7. Minimum wage

There is no information about the working hours for this country.

El Salvador does not have a national minimum wage, but it does have industry-specific minimum wages, such as $304.17 per month for retail employees, $304.17 per month for industrial laborers, $299.30 per month for apparel assembly workers, and $202.88 per month for agriculture industry workers.

Salaries are typically paid semi-monthly, with employers also required to provide a Christmas bonus. Each bonus amount will be determined by how long the employee has been with your company.

8. Employee benefits

There is no information about the working hours for this country.

The Salvadoran Institute of Master Welfare (ISBM) takes after teachers and their families, while the state provides healthcare to individuals who work via ISSS. The Solidarity Fund for Health (FOSALUD) distributes medication, vaccines, medical supplies, and laboratory equipment to national health facilities and hospitals.

9. Taxes

There is no information about the working hours for this country.

Corporate tax

Companies in El Salvador are imposed a corporate tax rate of 30 percent.

Individual income tax

Individuals in El Salvador are imposed an income tax rate between 0 and 30 percent. The actual percentage varies depending on the income bracket the individual belongs to.

VAT, GST and sales tax

The value-added tax (VAT) or the goods and sales tax (GST) in El Salvador is set at a flat rate of 13 percent.

10. VISA and work permits

There is no information about the working hours for this country.

All foreign nationals wishing to work in El Salvador must get a Work Permit as well as a Temporary Residence Permit. The Work Permit and Temporary Residence Permit are valid for one or two years and may be extended for a total of five years.

Nationals of Central American nations may apply for permanent residency immediately. After one year of possessing a Temporary Residence Permit, nationals of Spain or Latin American, Spanish-speaking nations may apply for permanent residence. After three consecutive extensions of their Temporary Resident Permit, all other foreign nationals may apply for permanent residency.

11. Employer Of Record service terms

There is no information about the working hours for this country.

Employment contracts

Employment contracts should be drafted in Spanish and contain the employee's information, such as their birth date, nationality, workplace location, hours of work, marital status, gender, wage, job description, and the term or purpose of their contract.

Within eight days of the start date, a written copy for the employer, employee, and another must be presented to the General Labor Office.

Minimum assignment length

Fixed-term contracts must specify the period of the job as well as the precise task to be completed. They are for a certain amount of time and, if renewed, may turn into an endless contract.

Indefinite contracts are permitted, as are fixed-term contracts, but only for a short time period, such as a project or to replace an employee who is temporarily unable to work.

Payment currency

United States Dollar (USD)

Bitcoin (BTC)

13.Opening a subsidiary in El Salvador

There is no information about the working hours for this country.

How to set up a subsidiary

The location and business structure of your company have an influence on how you may set up your El Salvador subsidiary. Before deciding on a location for your headquarters, we suggest researching the regulations of the city or area. Varied locations of the nation may have different El Salvador subsidiary laws that make incorporation simpler or more complex. A lawyer or consultant may also assist you in locating the ideal place.

You may choose from a number of various subsidiary structure alternatives. Each organization has its own set of benefits and drawbacks, and the one you pick should be based on your individual company conditions and requirements. El Salvador has a limited liability company (LLC), a public limited company, a branch, and a representative office. Keep in mind that each structure has its own set of rules governing your company's operations, freedom in El Salvador, and other factors, so you must choose an option that matches your needs.

In El Salvador, many businesses form as an LLC since it provides them with the greatest flexibility. If you wish to incorporate your business as an LLC, you must do the following steps:

(1) Sign a Deed of Incorporation in the presence of a notary public.

(2) Register with the Commercial Registry (must renew every year)

(3) Register with the city hall in your area.

(4) Register with the Internal Revenue Service and the Pension Fund Administrator

(5) Register with the Salvadoran Social Security Institute and the Ministry of Labor.

(6) Create a corporate bank account in your home country.

Subsidiary laws

Companies often prefer to establish their El Salvador company as an LLC since the country's rules are favorable to outsiders. To start an LLC, for example, you'll need at least two stockholders and one director. Shareholders' liability is restricted by the amount of capital they provide. All three persons may be foreigners, but at least one director, known as the legal representative, must be Salvadoran.

The minimum issued share capital is $2,000, and 5% must be paid up at the time of formation. If your corporation is run by a board of directors or a single administrator, they must have a formal reelection no more than seven years after taking office. Each year, you must also select an auditor and submit audited financial reports.

13. Why choose Rivermate as your Employer of Record / PEO in El Salvador

Establishing an entity in

El Salvador

to hire a team takes time, money, and effort. The labor law in

El Salvador

has strong worker employment protection, requiring great attention to details and a thorough awareness of local best practices. Rivermate makes expanding into

El Salvador

simple and effortless. We can assist you with hiring your preferred talent, managing HR and payroll, and ensuring compliance with local legislation without the hassle of establishing a foreign branch office or subsidiary. Our PEO and Global Employer of Record solutions in

El Salvador

give you peace of mind so you can focus on running your business.

Please contact us if you'd like to learn more about how Rivermate can help you hire employees in

El Salvador

via our Employer of Record / PEO solution.

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