Employer Tax Contributions

Tax Type	Rate (Employer)	Base
Honduran Social Security Institute (IHSS) - Health/Maternity	5.0%	Up to HNL 10,331.70 monthly
Honduran Social Security Institute (IHSS) - Disability/Old Age/Death	3.5% - 4.0%	Up to HNL 10,331.70 monthly
Private Contributions Regime (RAP) - Housing Fund	1.5%	Gross employee income/salary above IHSS IVM ceiling
Private Contributions Regime (RAP) - Labor Reserve Fund	4.0%	Worker's ordinary monthly salary (capped at three highest minimum wages, HNL 50,568.75)
National Institute of Professional Training (INFOP)	1.0%	No ceiling

Filing & Compliance

• Monthly payroll taxes and social security contributions (IHSS, RAP, INFOP) and withheld income tax are typically due within the first few days of the following month (e.g., the first 10 calendar days).
• Employers must file an annual declaration reporting total salaries paid and taxes withheld for all employees.
• The tax year in Honduras aligns with the calendar year (January 1 to December 31).

In Honduras, employers are responsible for deducting various taxes from employee salaries and remitting them to the government.

Employee Deductions

• Income Tax (ISR): A progressive tax based on earnings.
  • 0% for monthly income up to L19,920.
  • 15% for monthly income between L19,920 and L28,625.
  • 20% for monthly income between L28,625 and L62,151.
  • 25% for monthly income above L62,151.
• Social Security:
  • Sickness and Maternity: 2.5% of income up to L11,109.36.
  • Invalidity, Old Age, and Death: 1% of income up to L11,336.00.
• Instituto Nacional de Formación Profesional (INFOP): A contribution calculated based on employee earnings, with specific rates dependent upon company size and industry.

Employer Obligations

• Withholding and Remittance: Employers must deduct the correct amounts from employee salaries and submit them to the Honduran Revenue Administration Service (SAR) by the 10th day of the following month.
• Annual Tax Return: Employers must submit an annual income tax return, including financial statements, by December 31st of each year. For the 2024 tax year, the deadline was extended to the end of December 2024.
• Withholding Tax Table: Employers must utilize the updated withholding tax table provided by the SAR each year to calculate employee withholdings. For 2025, the annual taxable base is L217,493.16 (excluding deductions) or L257,493.16 (including deductions).
• Financial Statement Submission: Along with the annual tax return, employers are now required to submit financial statements to the SAR for informational purposes.

Deductible Expenses and Allowances

• Medical and Educational Expenses: Employees can deduct up to L40,000 annually for medical and educational expenses.
• Representation Expenses: Employees can deduct documented representation expenses.
• Donations: Donations to local educational and charitable institutions are deductible up to 10% of net taxable income.
• Personal Allowances: No personal allowances exist in Honduras.

Additional Information

• Minimum Wage: The minimum wage for 2024 is HNL 13,156.53. As of today, February 5, 2025, the 2025 figures may be available through official government channels.
• Tax Exemptions: Employees earning less than L 209,369.62 annually are exempt from filing an income tax return, although their employers still withhold and remit taxes.
• Residency: Individuals residing in Honduras for more than three months in a calendar year are considered tax residents.
• Tax Year: The Honduran tax year runs from January 1st to December 31st.

It's crucial for both employers and employees to stay updated on tax regulations, as they can change periodically. The information provided here is current as of February 5, 2025, and is subject to change. Consulting with a tax advisor is recommended for personalized guidance.