Rivermate | Aruba flag


Benefits and Entitlements Overview

Learn about mandatory and optional employee benefits in Aruba

Mandatory benefits

In Aruba, labor laws mandate a set of benefits that employers must provide to their employees. These benefits are designed to ensure a minimum level of security and well-being for workers.

Core Benefits

Here's a breakdown of the mandatory employee benefits in Aruba:

  • Probationary Period: A trial period can be agreed upon in writing, but it cannot exceed two months.
  • Vacation Leave: Employees are entitled to at least three times the number of working days they work per week as vacation days. For example, someone working five days a week would get at least 15 vacation days annually.
  • Public Holidays: Employees are entitled to paid time off on all official Aruban public holidays.
  • Sick Leave: Under the National Ordinance Sickness Insurance, employees who are unable to work due to illness are entitled to sickness compensation.
  • Maternity Leave: Employees are entitled to up to 12 weeks of maternity leave.
  • Overtime Pay: Overtime work must be compensated at a higher rate than regular pay. The specific rate varies depending on the situation.
  • Notice Period: Both employers and employees are required to provide a notice period before terminating employment. The length of the notice period depends on the duration of employment.
  • Severance Pay: In some cases, employees may be entitled to severance pay upon termination of their employment.

Social Security Contributions

In addition to the core benefits, employers are also required to make mandatory social security contributions on behalf of their employees. These contributions cover various social security programs, including:

  • Old Age Pension and Widow & Orphans Pension Insurance (10.5%)
  • General Health Insurance (8.9%)
  • Sickness Insurance (2.6%)
  • Accident Insurance (0.25% to 2.5%)
  • Cessantia (AWG 40 per employee): A severance fund mandated by law.

These contributions are a percentage of the employee's gross salary and are typically split between the employer and employee. The specific contribution rates may vary depending on the specific program and the employee's earnings.

Optional benefits

Many employers in Aruba offer additional perks to attract and retain top talent. Here are some common optional employee benefits in Aruba:

  • Dental and Vision Insurance: Some employers extend insurance coverage to dental and vision care, providing a more well-rounded healthcare package.
  • Profit Sharing or Bonuses: Some companies offer performance-based incentives like profit sharing or bonuses to motivate employees and reward strong performance.
  • Flexible Work Arrangements: Modern workplaces in Aruba are increasingly offering flexible work arrangements like remote work options or compressed workweeks to enhance work-life balance for employees.
  • Continuing Education Opportunities: Employers may invest in their workforce by offering tuition reimbursement or financial assistance for continuing education and professional development programs.
  • Life Insurance: Some employers provide life insurance as a benefit, offering financial security to the employee's family in case of death.
  • Disability Insurance: Disability insurance can be offered to provide financial support to employees who are unable to work due to long-term illness or injury.
  • Employee Discounts: Companies may offer employee discounts on their products or services, or partner with other businesses to provide discounted access to goods and services.
  • Wellness Programs: Incorporating employee wellness into the company culture is becoming increasingly common. This can include gym memberships, fitness programs, or on-site wellness facilities.

Health insurance requirements

In Aruba, the health insurance system is a blend of mandatory social security contributions and optional private plans, providing comprehensive coverage for employees.

General Health Insurance (AZV)

The General Health Insurance (AZV) is mandatory for all residents registered with the Civil Registry Office, including employees. Employers are required to contribute 8.9% of the employee's gross salary (up to a capped amount) towards AZV. The AZV covers a wide range of medical services, but there are some exclusions such as higher-class hospital stays, dental care for adults, and overseas medical care.

Private Health Insurance

Private health insurance is not mandatory, but some employers offer these plans to supplement AZV coverage. These private plans can provide benefits like coverage for services excluded by AZV (such as dental, vision, and higher-class hospital rooms), reduced waiting times for treatment, and more extensive coverage for overseas medical care.

Employee's Contribution

Employees are required to contribute 2.6% of their gross salary (up to a capped amount) towards AZV. There may be additional employee contributions required for private health insurance plans, depending on the specific plan offered by the employer.

Retirement plans

In Aruba, retirement savings are approached through mandatory social security contributions and the option of participating in private pension plans.

Mandatory Social Security (AOV)

Aruban residents, including employees, contribute to the Algemene Ouderdomsverzekering (AOV), which translates to General Old Age Pension Insurance. Employers contribute 10.5% of the employee's gross salary (up to a maximum earning threshold) towards AOV. Employees, on the other hand, contribute 0.5% of their gross salary (up to a maximum earning threshold) towards AOV. The full AOV pension is received upon reaching the retirement age with the required residency qualifications, typically 47 years and six months. Partial pensions are available for those who haven't met the full residency requirement.

Private Pension Plans

While not mandatory, some employers offer private pension plans on top of the mandatory social security contributions. These plans can be either Defined Benefit (DB) plans, where the employer guarantees a specific retirement income based on factors like salary and years of service, or Defined Contribution (DC) plans, where the employee and/or employer contribute a set amount towards the employee's retirement savings account, and the final benefit depends on investment returns. The benefits of private pension plans include allowing employees to save more for retirement beyond the AOV pension and may offer features like employer matching contributions to incentivize saving.

Rivermate | A 3d rendering of earth

Hire your employees globally with confidence

We're here to help you on your global hiring journey.