Rivermate | Honduras flag


Discover everything you need to know about Honduras

Hire in Honduras at a glance

Here ares some key facts regarding hiring in Honduras

Honduran Lempira
GDP growth
GDP world share
Payroll frequency
Working hours
44 hours/week

Overview in Honduras

Read more

Honduras, located in Central America, is bordered by Guatemala, El Salvador, Nicaragua, the Caribbean Sea, and the Pacific Ocean. It features a mountainous landscape with coastal lowlands and a tropical climate, prone to hurricanes on the Caribbean coast. Historically, it was home to the Maya civilization and became a Spanish colony in the 16th century, gaining independence in 1821. Modern challenges include poverty, violence, and political instability, contributing to significant emigration.

Economically, Honduras is a lower-middle-income country with agriculture, textiles, and tourism as key sectors. Coffee, bananas, and shrimp are major exports. The country faces social issues like crime, income disparity, and a high poverty rate. Educationally, there are efforts to improve vocational training to match labor market needs, but challenges remain with high unemployment and underemployment.

Culturally, Hondurans value personal relationships in business, with a preference for indirect communication and a respect for hierarchy. The country is predominantly Catholic, influencing its social and ethical norms. The informal economy is significant, providing income but lacking security. Honduras is also focusing on emerging sectors like renewable energy and business process outsourcing to diversify its economy.

Taxes in Honduras

Read more

Employer Tax Responsibilities in Honduras

  • Social Security Contributions (IHSS):

    • Sickness and Maternity (EM): 5% of gross salary, capped at HNL 10,342.19 monthly.
    • Disability, Old Age, and Death (IVM): 3.5% of gross salary, capped at HNL 10,796.49 monthly.
  • Professional Training Levy (INFOP):

    • Employers contribute 1% of the employee's gross salary to fund vocational and professional training.
  • Housing Fund (RAP):

    • Employers contribute 1.5% of the employee's gross salary if the employee benefits from the fund.
  • Income Tax Rates (2023):

    • 0% on income below HNL 199,039/year.
    • 15% on income between HNL 199,039 and HNL 303,500/year.
    • 20% on income between HNL 303,500 and HNL 705,814/year.
    • 25% on income above HNL 705,814/year.
  • Value-Added Tax (VAT):

    • Standard rate: 15%.
    • Increased rate: 18% for specific items.
    • VAT-exempt services include healthcare, education, and most banking and insurance services.
    • Businesses with over HNL 250,000 in annual taxable income must register and file monthly VAT returns.
  • Tax Incentives:

    • Free Trade Zones (FTZs): 100% exemptions from various taxes.
    • Temporary Import Regimes (RIT): Suspension of duties and taxes for certain imports.
    • Tourism Free Zones (ZLTs): Exemptions from income tax, customs duties, and municipal taxes.
    • Renewable Energy Projects: 10-year income tax exemption and duty exemptions on imported equipment.

Overall, employers in Honduras can expect to contribute an additional 11% on top of an employee's gross salary towards various social programs and funds, with specific tax rates and incentives depending on the sector and circumstances.

Leave in Honduras

Read more

In Honduras, employees are entitled to paid vacation leave according to the Honduran Labor Code. After one year of continuous employment, employees receive 10 working days of vacation, increasing to 12 days after two years, 15 days after three years, and 20 days after four years. Vacation pay must be provided at least three days before the start of the vacation, and the timing should be agreed upon by both employer and employee. Unused vacation days typically cannot be carried over to the next year.

The country also observes various public holidays, including Christian holidays like New Year's Day, Holy Week, and Christmas, as well as civic holidays such as America's Day, Labor Day, Independence Day, and others. Additional special days include Mother's Day and Lempira Day.

Employees are also entitled to other types of leave, such as sick leave, maternity leave, paternity leave, and bereavement leave, with specific conditions and durations outlined in the Labor Code. For instance, sick leave is paid for up to 26 weeks, maternity leave consists of 4 weeks pre-birth and 6 weeks post-birth, and paternity leave grants 4 working days off. Bereavement leave typically allows for 3 days off for the death of a close family member.

Benefits in Honduras

Read more

In Honduras, employees benefit from a comprehensive set of mandated benefits, including various types of paid leave such as annual leave, public holidays, sick leave, maternity leave, and other specific leaves for personal matters. The country also enforces social security contributions, which provide essential benefits like healthcare and pensions.

Key Employee Benefits:

  • Annual Leave: Starts at 10 days, increasing to 20 days after four years.
  • Sick Leave: Up to 26 weeks, extendable to 52 weeks.
  • Maternity Leave: 12 weeks with full pay.
  • Public Holidays: 11 official holidays.
  • Social Security: Mandatory contributions by both employers and employees.
  • Minimum Wage: Varies by industry and location.
  • Overtime Pay: Required for work beyond a 44-hour week.
  • Severance Pay: Applicable under certain conditions.
  • 13th Month Pay: Equivalent to one month's salary, paid in December.

Additional Employer-Provided Benefits:

  • Health and Wellness: Private health insurance, wellness programs.
  • Financial Benefits: Life and disability insurance, profit sharing.
  • Work-Life Balance: Flexible work arrangements, childcare assistance, additional PTO.
  • Other Perks: Educational assistance, employee discounts, transportation allowances.

Healthcare System:

  • IHSS Coverage: Mandatory enrollment in the national health insurance, funded by employee, employer, and government contributions.
  • IHSS Benefits: Includes doctor visits, hospitalization, maternity care, and medication.

Retirement Plans:

  • Public Pension System: Managed by IHSS, offers old-age pension and other benefits.
  • Private Pension Plans: Optional, potentially higher returns, tax benefits, and tailored investment options.

These benefits not only provide security and compensation for Honduran workers but also help companies attract and retain talent by offering additional perks.

Workers Rights in Honduras

Read more

In Honduras, the termination of employment is governed by the Honduran Labor Code, which outlines lawful grounds for dismissal, notice requirements, and severance pay entitlements. Lawful grounds for dismissal include just cause, such as misconduct or negligence, and economic or structural reasons like financial difficulties or business closure. Notice periods vary based on the length of service, ranging from 24 hours to two months. Severance pay is due for dismissals not based on just cause, calculated as one month's salary per year of service, except when termination is for just cause.

Additionally, the Labor Code and other laws provide protections against discrimination based on various characteristics, including sex, race, disability, and sexual orientation. Employers are required to implement anti-discrimination policies and ensure equal treatment in hiring and promotion. Complaints about discrimination can be addressed to the National Human Rights Commission or labor courts.

Work conditions are also regulated, with a standard workweek of 44 hours and mandatory rest periods. Employers must ensure a safe work environment, which includes risk assessments, providing safety equipment, and maintaining hygiene standards. Employees have rights to a safe workplace and can refuse unsafe work.

Overall, Honduras has established comprehensive labor and anti-discrimination laws to protect employees and ensure fair treatment in the workplace.

Agreements in Honduras

Read more

In Honduras, employment agreements are designed to suit various work arrangements, with the most common types being indefinite term contracts, fixed-term contracts, and verbal agreements.

  • Indefinite Term Contracts: These do not have a set end date and are governed by the Honduran Labor Code, offering benefits like annual leave and severance pay, with termination requiring advance notice based on the employee's length of service.

  • Fixed-Term Contracts: These are for a specific duration suitable for temporary or seasonal work, with possibilities for renewal and conditions for early termination that may require severance pay.

  • Verbal Agreements: Recognized for domestic service and short-term work not exceeding 60 days, these agreements are less formal but still valid under certain conditions.

Additional employment considerations include:

  • Collective Bargaining Agreements: These prioritize group conditions negotiated by unions over individual contracts.
  • Independent Contractor Agreements: Used for non-employee service providers like consultants, clearly outlining the non-employment relationship.

Employment contracts in Honduras typically detail essential elements such as employer and employee identification, job description, compensation, benefits, work schedule, and termination conditions. They also include clauses for confidentiality and intellectual property, with the legal framework provided by the Honduran Labor Code guiding their interpretation and enforcement.

Probationary periods are capped at 60 days, allowing flexibility for termination without notice during this time. Confidentiality clauses protect business-sensitive information, and while non-compete clauses are legally tricky due to the constitutional right to work, they may be enforceable under specific conditions related to time, geography, and legitimate business interests. Alternatives like confidentiality and non-solicitation agreements are recommended to safeguard employer interests effectively.

Remote Work in Honduras

Read more

The Labor Code of Honduras, enacted in 1965 and amended in 2012, provides the primary legal framework for employment but does not specifically address remote work. Here are key considerations for remote work under the existing code:

  • Employment Contract: Should specify the nature of the work arrangement, including remote work specifics.
  • Work Hours and Compensation: Remote workers are subject to the same standard work hours and minimum wage laws as traditional workers.
  • Health and Safety: Employers must ensure a safe working environment for remote employees, which may include ergonomic guidelines for home setups.

Technology Needs:

  • Connectivity: Employers may need to provide internet stipends due to uneven infrastructure across Honduras.
  • Communication Tools: Essential tools include secure video conferencing and project management software.
  • Equipment: Employers might need to supply necessary equipment or provide stipends for items like laptops and software.

Remote Work Policies:

  • Policy Development: Employers should create formal policies outlining remote work practices and expectations.
  • Training and Support: Training in remote tools and cybersecurity is crucial.
  • Performance Management: Clear metrics and regular check-ins are necessary to maintain productivity.
  • Workplace Culture: Virtual meetings and social events can help in building a positive remote work culture.

Flexible Work Arrangements:

  • Flexitime and Job Sharing: These are not specifically regulated but can be implemented through agreements.
  • Equipment and Expense Reimbursements: Not mandated but can be negotiated in employment contracts.


  • Data Protection and Privacy: Employers must protect data and respect employee privacy, implementing security measures like encryption and access controls.
  • Clear Communication: Essential for managing expectations and ensuring compliance with data protection protocols.

In summary, while the Honduran Labor Code does not specifically address remote or flexible work arrangements, employers and employees must navigate these areas through clear contracts, policies, and mutual agreements, ensuring both compliance with existing laws and adaptation to the digital work environment.

Working Hours in Honduras

Read more
  • Standard Work Hours: The Honduran Labor Code limits the workday to 8 hours and the workweek to 44 hours, though salaries are calculated based on a 48-hour workweek.
  • Overtime Compensation: Employees earn 125% of their hourly wage for daytime overtime and 170% for nighttime overtime (7:00 PM to 5:00 AM). The maximum overtime allowed is 16 hours per week, and it cannot be mandated more than four times a week.
  • Rest Periods and Breaks: Workers must receive a minimum of 10 consecutive hours of rest within a 24-hour period and a 30-minute break during their workday. Female employees aged 14 to 18 are entitled to a 2-hour break.
  • Weekly Rest: Employees should have one day off for every six days worked, with Sundays preferred unless exceptions apply.
  • Night Shift Regulations: Night shifts, defined as work between 7:00 PM and 5:00 AM, are limited to 6 hours per day or 36 hours per week. Night workers receive a 50% wage premium, with an additional 75% for overtime.
  • Weekend Work: While Sunday is the preferred day off, exceptions can be made for urgent or continuous operations or if required by public interest. Compensation details for weekend work vary based on the employment contract.

Salary in Honduras

Read more

Understanding and negotiating market competitive salaries in Honduras involves considering various factors such as job title, education, industry, location, and company size. Salaries vary significantly with higher wages typically found in managerial positions, specialized fields, urban areas, and larger or reputable companies.

To research competitive salaries, individuals can utilize resources like salary surveys, job boards, and government data from the Honduran Ministry of Labor. This information aids in negotiating salaries that align with one's skills and experience.

The minimum wage in Honduras is tiered based on company size, with increases ranging from 5.5% to 7% in 2024. Additional financial benefits mandated by law include the 13th and 14th-month bonuses, which are equivalent to one month's salary each, paid in December and July respectively.

Severance pay is another critical benefit, providing terminated employees with compensation based on their length of service. Payroll practices in Honduras vary, with bi-weekly and monthly disbursements being common, and payments are typically made via bank deposit or payroll cards.

Overall, understanding these elements is essential for both employers to sustain their businesses and for employees to ensure they receive fair compensation.

Termination in Honduras

Read more

In Honduras, the Labor Code outlines specific notice periods for terminating indefinite employment contracts based on the employee's length of service, ranging from 24 hours for those with less than 3 months of service to two months for those with over 2 years of service. These periods are mandatory for employer-initiated terminations, with different, often shorter, periods applicable for employee resignations.

The code also specifies conditions under which severance pay is due, including dismissal without just cause and indirect dismissal, among others. Severance pay calculations depend on the length of service, capped at 8 months' wages.

Terminations can be categorized as with just cause, without just cause, mutual agreement, or indirect dismissal. Employers must provide written notice and, if applicable, prove just cause. Employees can challenge unfair dismissals in labor courts, and certain groups, like pregnant women and union leaders, enjoy additional protections.

Freelancing in Honduras

Read more

In Honduras, distinguishing between employees and independent contractors is essential for businesses to comply with labor laws and avoid legal issues. The classification is based on several factors:

  • Control: More control by the company suggests an employee relationship.
  • Economic Dependence: Independent contractors usually have multiple clients.
  • Integration: Employees are more integrated into the company’s operations.
  • Benefits: Employees receive benefits like social security and health insurance, which contractors do not.

Legal Implications:

  • Employees: Subject to income tax and social security withholdings, and entitled to labor protections.
  • Independent Contractors: Not subject to withholdings or labor protections, and responsible for their own taxes and social security.

Mitigating Risks: Businesses should use clear contracts to define the nature of the relationship, detailing the scope of work, payment terms, and confidentiality, among other aspects.

Negotiation Practices: Effective negotiation involves understanding market rates, articulating value, and maintaining flexibility and clear communication.

Industries for Independent Contracting: Common sectors include IT, creative services, administrative support, and construction.

Ownership of Intellectual Property (IP): IP initially belongs to the creator, but can be transferred via contracts. It's important for contracts to clearly address IP ownership, and freelancers should take steps to protect their IP.

Tax and Insurance: Freelancers must handle their own tax obligations and may consider various insurance options for financial protection. They can also voluntarily enroll in social security programs for additional benefits.

Health & Safety in Honduras

Read more

Honduran health and safety laws are governed by the Labor Code, the General Workplace Health and Safety Regulation, and the Social Security Law, which set standards for safe working conditions and benefits for workers. Employers are responsible for maintaining a safe workplace, conducting risk assessments, and providing necessary training and safety equipment. Workers have rights to refuse unsafe work, participate in safety decisions, and report hazards without fear of reprisal.

Specific regulations address hazards like physical, chemical, biological, and ergonomic risks, requiring provisions like adequate lighting, clean water, and emergency plans, especially in high-risk industries such as construction and mining. The Ministry of Labor and Social Security, along with the Honduran Social Security Institute, enforce these laws through workplace inspections and can impose fines or criminal charges for serious violations.

Challenges include limited enforcement resources, a large informal sector, and low worker awareness of their rights. Employers must implement safety procedures, conduct risk assessments, and ensure incident reporting and investigation. Workers should be informed of workplace hazards and involved in safety decisions.

Despite a robust legal framework, enforcement difficulties persist, especially in informal sectors. Workplace inspections are crucial for compliance and prevention, focusing on various health and safety criteria. Employers are required to report and investigate workplace accidents, with the Honduran Social Security Institute handling compensation claims for work-related injuries and diseases.

Dispute Resolution in Honduras

Read more

Honduras has a structured system for resolving labor disputes, featuring labor courts and arbitration panels. Labor courts handle most labor disputes, with First Instance Labor Courts addressing initial claims and Labor Courts of Appeals reviewing their decisions. Arbitration panels, formed ad-hoc, provide a swift, binding resolution outside the court system.

The labor justice system in Honduras is crucial for protecting worker rights and ensuring fair labor practices. Compliance audits and inspections across various sectors, conducted by different government agencies, play a significant role in enforcing laws and regulations. These include labor, tax, environmental, and sector-specific audits, with non-compliance resulting in penalties like fines or criminal charges.

Honduras also has a legal framework supporting whistleblowers, although practical implementation and enforcement are weak, leaving whistleblowers vulnerable to retaliation and discouraging reporting. The country has ratified several core International Labor Organization (ILO) conventions, influencing its labor laws. However, challenges like enforcement, child labor in agriculture, and violence against trade unionists persist, despite ongoing efforts and commitments to adhere to international labor standards.

Cultural Considerations in Honduras

Read more
  • Communication Style: Hondurans prefer an indirect communication style, emphasizing respect for hierarchy and group harmony. Direct critiques are softened with euphemisms, and assertiveness is context-dependent.

  • Formality and Hierarchy: Formality is paramount in the Honduran workplace, with a clear respect for hierarchical structures. Communication is formal, especially with superiors, and business attire is conservative.

  • Non-Verbal Communication: Non-verbal cues are significant, with appropriate eye contact and physical gestures varying by status and familiarity. Building rapport through informal interactions is crucial for effective communication.

  • Negotiation and Relationships: Honduran business culture values relationship-building over quick deal-making, with negotiations tending to be indirect and extended to establish trust and rapport.

  • Hierarchical Structures: Honduran businesses typically feature top-down decision-making and formal communication channels, which can limit collaboration and innovation while emphasizing individual responsibility.

  • Impact on Business Practices: Hierarchical structures influence decision-making speed, team dynamics, and leadership styles, often leading to a more directive and paternalistic leadership approach.

  • Cultural and Holiday Considerations: Understanding local holidays like Independence Day and Holy Week is important as they can significantly affect business operations. Respecting these cultural observances helps in fostering a positive workplace environment.

Rivermate | A 3d rendering of earth

Hire your employees globally with confidence

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