Employer of record in El Salvador: costs, rules and how to hire
Hire someone in El Salvador without opening your own company there.
An employer of record (EOR) can handle local employment while you manage the person’s work. Start by confirming the provider’s coverage and the arrangement available for your specific hire.
By Employ Borderless · We help you understand and compare EOR services.
How does an employer of record in El Salvador work?
Three parties, two contracts: the EOR employs the person under a local employment contract, your company signs a service agreement with the EOR and directs the day-to-day work. Which arrangement is legal and sensible in El Salvador is decided by the questions below.
Your company
Choose the person, agree their role and manage their daily work.
The employer of record
Handles the agreed employment, payroll and HR services through the employing entity named in your contract.
Your employee
Works with your team under a local employment contract with the EOR’s employing entity.
- Do you already have an entity in this country?
- How many people are you hiring, and for how long?
- Is the work genuinely independent, or is it a job?
- Who carries the employment risk if the arrangement is challenged?
What each route means in full
- Your own entity
- Choose it when: You already have a company here, or you are committing to a substantial local team for the long term.You become the legal employer. You arrange payroll, benefits, filings and employment support yourself, and you carry the setup and running cost.
- Employer of record
- Choose it when: You have a person to hire here, want them employed properly, and do not want to open a company for it.The provider is the legal employer through its own entity. You direct the work and pay one invoice covering salary, employer costs and the service fee.
- Independent contractor
- Choose it when: The work is genuinely independent: their own business, their own methods, their own clients.A contract for services, not employment. The label does not decide the status; how the person actually works does, and getting it wrong is reclassified after the fact.
Hiring in El Salvador: the short version
Say you are hiring a customer support lead in San Salvador at $1,000 a month. El Salvador pays in US dollars, so there is no currency line to price, and the statutory add-ons are short: 8.75% to the pension fund, the ISSS health contribution, which reference data puts at 7.5%, an aguinaldo bonus of at least 15 days of pay each December, and a 30% premium on 15 days of vacation. That comes to about $1,216 a month, or $14,591 a year, before company benefits, equipment and the provider fee.
Two things shape the decision more than the rates. Dismissal is expensive by default: the Labour Code presumes a dismissal to be without just cause and prices it at 30 days of basic salary per year of service. And the Code treats a contractor who employs staff as their employer, with joint liability, so the question to put to any provider is which Salvadoran company employs your hire and on what contract.
Your first hire in El Salvador in five decisions
Five things settle a Salvadoran hire, and each figure below is worked through further down.
- Entity or EOR. No fixed headcount decides it. Compare the annual provider fee with running the pension, ISSS and payroll filings yourself, and remember the severance exposure travels with whoever employs the person.
- Employee or contractor. Work that is permanent by nature is treated as indefinite employment whatever the contract says, so a long-running contractor arrangement for a core role is an employment claim waiting to happen.
- Budget line. On $1,000 a month: $87.50 pension, $75 ISSS health, about $41 of aguinaldo accrual and about $12 of vacation premium, giving about $1,216 a month.
- Exit cost. A dismissal without just cause costs 30 days of basic salary per year of service, never less than 15 days, with the daily salary capped at four times the daily minimum wage.
- Realistic start. After the employing entity, the written contract and its copy to the Labour Directorate, and the pension and ISSS registrations are settled, not from an advertised onboarding window.
How to hire employees in El Salvador
An employer of record employs your hire through a Salvadoran company, signs the contract, runs payroll and holds the pension and ISSS registrations, while you direct the work. The Labour Code is direct about who counts as the employer: a contractor that does work for others with its own staff is their employer, contractor and subcontractor are jointly liable for those workers, and an intermediary that hires for an employer binds that employer. So ask which company employs the person, and keep the answer in writing.
From an agreed role to the first payroll
The steps are short, and the written contract is the one with a legal deadline attached.
- Define the duties and the workplace, and check the salary against the sector minimum if it is close to it.
- Verify the employing Salvadoran company and the contract it will sign.
- Sign the contract in writing, in three copies: one each for the employer and the employee, and one sent to the Dirección General de Trabajo within eight days.
- Register the hire for the pension system and the ISSS through the employer.
- Set the payday, the schedule against the eight-hour day, and who approves overtime and vacation dates.
How long the first hire takes, and what sets the date
The contract and the registrations set the date, not a number of weeks. Ask which of these is outstanding, because that is the one holding your start.
- Agree the offer, the duties and the workplace.
- Confirm the employing company and sign the written contract.
- Complete the pension and ISSS registrations so the first contributions can be paid.
- Land the start date on the payroll cycle so the first month and the aguinaldo accrual begin together.
Missing the written contract does not void the employment, but the Code treats the written contract as a protection for the employee and holds its absence against the employer, so do not start without it.
Read this in full under “Misclassification risk, and the rules the label sits under”.
EOR, entity, or contractor in El Salvador?
Salvadoran employer cost is modest in percentages and easy to underestimate in the once-a-year items. The pension contribution is 8.75%, the ISSS health contribution sits on top, and then the aguinaldo and the vacation premium arrive as lump sums that a monthly quote can leave out. Budget them monthly, because they are owed whoever employs the person.
What can a $1,000 monthly salary cost?
This full-year illustration assumes an employee in the first three years of service, an unchanged salary, and a day of pay taken as a 365th of annual salary, the ratio the 2025 minimum wage decree uses between its monthly and daily rates. The ISSS figure comes from reference data, not from an ISSS publication.
| Budget item | Monthly | Annual illustration |
|---|---|---|
| Gross salary | $1,000.00 | $12,000.00 |
| Pension, employer 8.75% | $87.50 | $1,050.00 |
| ISSS health, employer 7.5% (ISSA reference data) | $75.00 | $900.00 |
| Aguinaldo, 15 days of pay a year | $41.10 | $493.15 |
| Vacation premium, 30% of 15 days of pay | $12.33 | $147.95 |
| Subtotal before the items below | $1,215.93 | $14,591.10 |
| Training levy, work-risk cover, company benefits, equipment and provider fee | Add the agreed costs | |
Employee deductions are separate money: on the same salary the employee pays $72.50 to the pension fund and, on the reference rate, $30 to the ISSS before income tax is withheld. Adding those again overstates the employer cost.
Ask for a complete provider quote
A useful quote names the employer and prices every statutory line, so you can compare two providers on the same salary.
- The Salvadoran company that employs your hire, and the contract it signs.
- The pension and ISSS contributions, and whether the training levy applies to the employing company.
- The aguinaldo and vacation premium, shown as monthly accruals.
- The minimum wage sector used, if the salary is close to it.
- The service fee, deposit and invoice tax.
- The cost of ending the employment, including the article 58 indemnity, or of moving the hire to your own company.
Compare providers on the same gross salary and benefits, because an advertised fee does not establish the employment budget, and there is no universal headcount at which you should switch to direct employment.
Moving from an employer of record to your own Salvadoran company
Plan the move around years of service, because in El Salvador almost every entitlement scales with them. The aguinaldo steps up at three and ten years, vacation depends on a year of continuous service, and the dismissal indemnity is counted per year.
Settle in writing before the move how the accrued aguinaldo and vacation are paid or carried, and who carries the indemnity if the employment ends rather than transfers. The Code says a change of employer does not end employment contracts or affect the rights they created, which is the starting point, but take Salvadoran advice on how that applies when the person moves from a provider to your own company.
Read this in full under “Misclassification risk, and the rules the label sits under”.
Read this in full under “What an employer of record adds to the employment cost”.
What should you budget for hiring in El Salvador?
Your budget includes salary, employer contributions, agreed benefits and the EOR fee. Ask for a quote for the actual role and salary.
- Gross salary
- Employer contributions
- Benefits and other costs
- EOR service fee
- Gross salary: 100
- Employer social contributions: 16.25%
- Benefits and EOR fee: quoted per hire
The numbers behind this figure
| Cost | Amount |
|---|---|
| Gross salary | 100 |
| Employer social contributions | 16.25% |
| Benefits and EOR fee | Quoted per hire |
Source: ISSA, 2024
Published EOR base fees among providers covering El Salvador range from $179 to $699 per employee/month. These are provider base prices, not a quote for this hire or the total employment cost.
Separate employer contributions from employee deductions
The table keeps the two sides apart and says where each rate comes from.
| Item | Employer side | Employee side | Source |
|---|---|---|---|
| Pension | 8.75% | 7.25% | Pension law, article 16 |
| ISSS health | 7.5% | 3% | ISSA reference data; PwC gives a $1,000 monthly earnings ceiling |
| Income-tax withholding | Withheld and remitted by the employer | Based on taxable income | Income Tax Law |
The 16% pension contribution is divided by the law itself: 9 points go to the worker's individual account, 6 points to a shared guarantee account, and 1 point to the fund administrator as its fee. Employers with staff may also owe a training levy to INSAFORP; I have not read its official rate for this guide, so ask the provider whether it applies to the employing company and at what rate.
What an employer of record adds to the employment cost
Budget the provider fee as a third line, next to gross pay and the employer contributions above. Across the market it runs from $99 to $799 per employee per month, or 8 to 20% of salary, and where a quote sits in that range is decided by the work rather than by the country: headcount, how much of the administration you hand over, and whether the provider is pricing a single hire or a team. I treat a quote at the bottom of the range as a question rather than a win, because the cheap number is usually the one with the fewest things inside it.
What the fee buys is the employment itself: the employing company, the payroll run, the pension and ISSS filings and the employer-side administration. What it does not buy is the cost of employing the person. Gross pay, the aguinaldo, the vacation premium and the employer contributions are all yours. Ask for a quote that separates the fee from the pass-through costs, because a single blended figure hides which half moves when pay changes.
Source: Superintendencia del Sistema Financiero, Ley Integral del Sistema de Pensiones, captured September 2026.
Average salary in El Salvador by occupation
Gross monthly earnings of employees per ISCO-08 occupation group, in USD, from the ILO's official labour statistics. These stored survey figures for El Salvador have reference year 2025. Use these survey earnings to benchmark an offer before an EOR quote turns it into total employer cost.
| Occupation group | Monthly (USD) | Approx. USD |
|---|---|---|
| All occupations | 507 | $507 |
| Managers · ISCO 1 | 1,075 | $1,075 |
| Professionals · ISCO 2 | 869 | $869 |
| Technicians and associate professionals · ISCO 3 | 684 | $684 |
| Clerical support workers · ISCO 4 | 615 | $615 |
| Service and sales workers · ISCO 5 | 452 | $452 |
| Skilled agricultural, forestry and fishery workers · ISCO 6 | 389 | $389 |
| Craft and related trades workers · ISCO 7 | 462 | $462 |
| Plant and machine operators and assemblers · ISCO 8 | 522 | $522 |
| Elementary occupations · ISCO 9 | 341 | $341 |
Source: ILOSTAT, the International Labour Organization's statistics database (average monthly earnings of employees, both sexes), reference year 2025.
How to hire through an EOR in El Salvador
- Step 1
Define your hire
Prepare the role, work location, salary, working hours and target start date.
- Step 2
Confirm the local hiring route
Ask the provider to confirm that its employing arrangement fits this role and location, including any restrictions.
- Step 3
Review the full quote and contract
Check the legal employer, total costs, benefits, responsibilities and exit terms before signing.
- Step 4
Complete onboarding
Coordinate employment documents, required checks, equipment and the payroll cut-off with the EOR.
- Step 5
Keep employment changes coordinated
Manage the work and tell the EOR about proposed pay, leave, contract or termination changes before they take effect.
What should the EOR arrange before your hire in El Salvador starts?
Confirm the employment terms, work eligibility, payroll and pension arrangements before the start date. Ask which local rules and agreements apply to your employee.
What types of employment contracts exist in El Salvador?
The nature of the work decides the contract more than its wording. Work that is permanent in the business is treated as indefinite employment even when the contract names an end date, and a fixed term is valid only where the work is genuinely temporary or tied to an event that ends it. For most hires through an employer of record, expect an indefinite contract.
Put the employment terms in writing
The Code requires a written contract, and any change or extension of it, in three copies, with one sent to the Dirección General de Trabajo within eight days. State the employer, the duties, the workplace, the start date, the salary, the schedule, the vacation arrangements and any trial period.
Trial period
A contract may make the first 30 days a trial period, during which either side can end it without giving a reason. It is optional, it has to be written into the contract, and the same parties cannot agree a new trial period if they sign a new contract for the same work within a year. Thirty days is short, so do the assessment work before the offer.
Misclassification risk, and the rules the label sits under
The Code defines an employment contract by what happens, not by its name: a person who does work or provides a service under another's direction for a salary is an employee, whatever the document is called. It also treats contractors who employ staff as employers and makes contractor and subcontractor jointly liable. Put together, a contractor agreement for someone who works inside your team, on your schedule and under your direction, carries the obligations of employment rather than escaping them.
I have not read a penalty schedule for misclassification in this pass, so I am not going to quote one. Decide the status on the working conditions you will actually impose, and where the person will work under your direction, employ them through a company that can.
Source: Asamblea Legislativa, Código de Trabajo, consolidated text, captured September 2026.
What catches employers out in El Salvador
Six points decide whether a Salvadoran payroll is right, and most of them are about service rather than salary. Ask the provider how each one is handled before the first payslip.
| Point | Why it changes the decision |
|---|---|
| Dismissal is presumed unjustified | The Code presumes every dismissal to be without just cause, so the article 58 indemnity is the default cost of ending employment, not the exception. |
| Permanent work means an indefinite contract | A fixed end date on work that is permanent by nature does not hold; the contract is treated as indefinite. |
| Aguinaldo steps with service | 15 days of pay for one to three years, 19 days for three to ten, 21 days from ten years, paid between 12 and 20 December. |
| Vacation carries a premium | 15 days paid at the ordinary salary plus 30%, after a year of service with at least 200 days worked. |
| Minimum wage is set by sector | $408.80 a month for commerce, services and industry from 1 June 2025, with lower rates for textile maquila and agriculture. |
| The contract copy has a deadline | The employer sends a copy of the written contract to the Dirección General de Trabajo within eight days of signing. |
A seventh point is the health contribution. Reference data from the ISSA gives the ISSS rate as 7.5% employer and 3% employee, but I did not read an ISSS publication of those rates for this guide, so ask the provider to confirm the rate and any salary ceiling on the payslip.
Source: Ministerio de Trabajo y Previsión Social, Decreto Ejecutivo No. 11, minimum wage rates, captured September 2026.
Read this in full under “Misclassification risk, and the rules the label sits under”.
What taxes and social contributions apply in El Salvador?
Two funds make up the ordinary employer contributions. The pension contribution is 16% of the contribution base, split 8.75% employer and 7.25% employee, under the Ley Integral del Sistema de Pensiones. Health cover through the ISSS is a separate contribution on top, and its rate is the one figure in this section I could not read from a Salvadoran government source.
Example: $1,000 monthly salary
Pension $87.50, ISSS health $75 on the reference rate, aguinaldo accrual of about $41 and vacation premium of about $12 bring the employer's monthly cost to about $1,216, or about $14,591 a year, before the training levy, company benefits and the provider fee. It is a partial budget example, not an all-in quote or a take-home calculation.
Income tax and payroll administration
The employer withholds income tax through payroll. Our fact store records a top personal income tax rate of 30% from the Income Tax Law, in a text consolidated to its 2014 reforms, and a 13% VAT rate; the withholding tables have been reformed since, so ask the provider for the table and the tax year behind the payslip rather than applying the top rate to a whole salary.
Pensions and retirement
The ISSS lists the old-age pension requirements as age 60 for men or 55 for women, with 15 to 25 years of contributions depending on age. The employer's part is the monthly contribution; there is no separate statutory retirement payment in the sources I read for this guide.
Source: Instituto Salvadoreño del Seguro Social, old-age pension requirements, captured September 2026.
Read this in full under “Misclassification risk, and the rules the label sits under”.
What pay and leave should your offer in El Salvador cover?
Agree pay, working patterns, paid leave and benefits as part of the offer. These affect both your hiring budget and how you plan the employee’s work.
- Paid annual leave: 11 days
- Public holidays: 9 days
- The rest of the year: 345 days
The numbers behind this figure
| Entitlement | Days a year |
|---|---|
| Paid annual leave (statutory minimum) | 11 days |
| Public holidays (national) | 9 days |
| Total statutory paid days off | 20 days |
Source: National government, 2026; National government, 2026. Statutory minimums. Eligibility, accrual and collective agreements can change what an individual employee receives.
How does payroll and compensation work in El Salvador?
El Salvador sets its minimum wage by sector. From 1 June 2025 it is $408.80 a month for commerce, services and industry, $402.32 for textile maquila and $272.53 for agriculture, and the monthly figure is paid whatever the number of days in the month. For an office or technology role the floor rarely binds, so price the role, the city and the experience first.
Set pay against the right sector
The sector matters for more than the floor. The decree says statutory benefits such as vacation, aguinaldo and severance are calculated on the daily minimum unless the agreed salary is higher, so a salary near the minimum needs the right sector named in the contract. For context rather than a floor, our fact store holds an ILOSTAT average monthly wage of about $507, a broad national figure that says nothing about a professional role.
Hours, overtime and night work
The working week is short on paper and the overtime rate is high, which matters for teams that want cover across time zones.
| Topic | Rule in the Labour Code |
|---|---|
| Day shift | At most eight hours a day and 44 hours a week. |
| Night shift | At most seven hours a day and 39 hours a week; a shift with more than four night hours counts as a night shift. |
| Overtime | A 100% surcharge on the basic hourly wage, agreed only occasionally. |
| Night work | A surcharge of at least 25% over the day rate. |
| Weekly rest | One paid day of rest a week, normally Sunday. |
Because overtime is meant to be occasional, a role that needs regular evening cover is better built as a night schedule with its own shorter limits than as a day job with standing overtime.
The aguinaldo
Every employer pays an annual aguinaldo: at least 15 days of salary for one to three years of service, 19 days for three to ten years and 21 days from ten years, paid between 12 and 20 December. An employee with less than a year on 12 December gets a proportional amount, and the Code says it cannot be lost for disciplinary reasons or absences. Budget it monthly, at about 4.1% of salary in the first three years.
Read this in full under “What catches employers out in El Salvador”.
Read this in full under “Misclassification risk, and the rules the label sits under”.
What benefits and leave are employees entitled to in El Salvador?
The statutory leave is short in days and generous in pay. Vacation is 15 days after a year of service, paid with a 30% premium, and maternity leave is 16 weeks. Paternity leave in the Code text is three days, which is the entitlement most worth checking against later legislation before you write a family leave policy.
Leave entitlements
These are the rules in the consolidated Labour Code text.
| Leave | Statutory rule |
|---|---|
| Vacation | 15 days after one year of continuous service, paid at the ordinary salary plus 30%; at least 200 days worked in the year; the employer sets the dates with 30 days of notice. |
| Maternity leave | 16 weeks, ten of them after the birth, with a benefit of 75% of basic salary; the cash benefit needs six months of service with the employer before the expected birth date. |
| Paternity leave | Three days for a birth or adoption, in one block or spread over the first 15 days. |
| Weekly rest | One paid day a week, normally Sunday. |
Our paid time off index counts the 15 vacation days as 11 working days, because the Code's days are calendar days; both numbers describe the same entitlement.
Holidays
The Code lists paid holidays on 1 January, Thursday, Friday and Saturday of Holy Week, 1 May, 6 August, 15 September, 2 November and 25 December, with 3 and 5 August added in San Salvador and each town's main festival elsewhere. Additional days can be set by separate decree, so confirm the calendar for the payroll year with the provider.
What happens if you need to end employment in El Salvador?
Discuss the proposed change with the EOR before giving notice or promising an exit payment. Ask it to confirm the procedure, timing and costs for the employee’s circumstances.
The numbers behind this figure
| Obligation | Weeks of salary |
|---|---|
| Statutory notice | 0 weeks |
| Statutory severance | 22.9 weeks |
| Total statutory exit cost | 22.9 weeks |
El Salvador sits at number 28 of 190 countries for statutory exit cost in our Termination Cost Index.
What are the termination and compliance rules in El Salvador?
Ending employment without just cause has a fixed price in El Salvador, and the law assumes that is what a dismissal is. The Code presumes every dismissal to be without just cause, and an employee on an indefinite contract dismissed that way is owed 30 days of basic salary for each year of service, pro rata for part years, never less than 15 days. Plan every exit around that number.
The dismissal indemnity
The cap matters more than the formula for senior hires. The salary used in the calculation cannot exceed four times the daily legal minimum wage, which at the commerce and services rate of $13.44 a day is $53.76 a day, or about $1,635 a month. Anyone paid more than that has their indemnity calculated as if they earned it.
| Service | Indemnity on a $1,000 monthly salary | Indemnity at the cap |
|---|---|---|
| Six months | 15 days, about $493 | 15 days, $806 |
| Three years | 90 days, about $2,959 | 90 days, $4,838 |
| Five years | 150 days, about $4,932 | 150 days, $8,064 |
The figures are our arithmetic on the article 58 rule, with a day of pay taken as a 365th of annual salary. On top, the employee is owed the proportional vacation and aguinaldo for the time worked.
Just cause
The Code lists the causes that let an employer end the contract without liability, such as deception about qualifications in the first 30 days or repeated negligence. Because the law presumes a dismissal to be without just cause, the employer has to prove one, so have the employing company assess the ground before anything is said to the employee.
Notice
I did not find a general notice period for an employer's dismissal in the Code text I read; the cost the Code sets is the indemnity. Ask the provider what notice and paperwork its own process uses, and get the full exit cost in writing before a decision.
Contractors and intermediaries
The Code makes a contractor that employs staff their employer, jointly liable with any subcontractor, and binds an employer to an intermediary it authorised. Ask the provider to explain, in writing, which company employs your hire and on what contract.
Read this in full under “Misclassification risk, and the rules the label sits under”.
These are stored source rules, not a case-specific termination calculation. Confirm the applicable procedure and current requirements before acting.
Choose an EOR for your hire in El Salvador
Compare the employing entity, itemised costs, local support, payroll deadlines and what happens if you change or end the arrangement.
Questions about hiring in El Salvador
What does an employer of record do in El Salvador?
An employer of record employs your hire through a Salvadoran company, signs the written contract, runs payroll and holds the pension and ISSS registrations, while you direct the work. The Labour Code treats a contractor that employs staff as their employer, so ask which company employs the person and on what contract.
Can I hire in El Salvador without setting up my own company?
Yes, through a provider whose Salvadoran company employs the person. Confirm the employing company and the contract, and keep your own tax position separate from the employee's payroll.
Is an EOR the same as a PEO?
No. With an employer of record the provider's Salvadoran company is the legal employer; with a PEO or payroll service your business remains the employer and needs its own registrations. Compare EOR and PEO service models.
What is the minimum wage in El Salvador?
It is set by sector. From 1 June 2025 it is $408.80 a month for commerce, services and industry, $402.32 for textile maquila and $272.53 for agriculture, under Executive Decree 11.
What currency is payroll in?
US dollars. El Salvador's minimum wage decree and payroll figures are set in dollars, so a US-based employer has no exchange-rate line on the salary itself.
How much does an employee in El Salvador cost on top of salary?
On $1,000 a month: pension $87.50, ISSS health $75 on the reference rate, aguinaldo accrual of about $41 and vacation premium of about $12, giving about $1,216 a month before the training levy, company benefits and the provider fee.
Is the aguinaldo mandatory?
Yes. At least 15 days of salary for one to three years of service, 19 days for three to ten years and 21 days from ten years, paid between 12 and 20 December, and proportionally for anyone with less than a year on 12 December.
What are the pension contribution rates?
16% of the contribution base: 8.75% employer and 7.25% employee, under article 16 of the Ley Integral del Sistema de Pensiones. The ISSS health contribution is separate.
How much paid vacation does an employee get?
15 days after one year of continuous service, paid at the ordinary salary plus a 30% premium, for an employee who worked at least 200 days in the year. The employer sets the dates and gives 30 days of notice.
How long is maternity leave?
16 weeks, ten of them after the birth, with a benefit of 75% of basic salary. The cash benefit needs six months of service with the employer before the expected birth date; the leave does not. Paternity leave in the Code text is three days.
What are the working hours and overtime rules?
At most eight hours a day and 44 a week on day shifts, seven hours and 39 a week on night shifts. Overtime carries a 100% surcharge and may be agreed only occasionally; night work carries at least 25%.
What does it cost to dismiss an employee?
A dismissal without just cause costs 30 days of basic salary per year of service, never less than 15 days, with the daily salary capped at four times the daily minimum wage. The Code presumes a dismissal to be without just cause, so plan on paying it, plus proportional vacation and aguinaldo.
Is there a probation period?
An optional one. A written contract can make the first 30 days a trial period, during which either side can end it without giving a reason.
Can I hire a Salvadoran worker as a contractor instead?
Only where the work is genuinely independent. The Code defines employment by the work done under another's direction for a salary, whatever the contract is called, and treats permanent work as indefinite employment. Where the person works inside your team under your direction, employ them.
Does an EOR fee include the employment costs?
No. The fee, from $99 to $799 per employee per month or 8 to 20% of salary across the market, buys the employment administration. Gross pay, the aguinaldo, the vacation premium and the employer contributions are pass-through costs, so ask for a quote that separates them.
Check the facts behind this guide
Each reviewed fact links to its source and shows its validation date and effective period. Monthly review does not mean that every rule changes monthly. Statistical benchmarks retain their original data periods.
View sourced facts and review dates
| Fact | Value | Source | Effective / data period | Last validated |
|---|---|---|---|---|
| Minimum wage by sector, from 1 June 2025 | Executive Decree 11 sets monthly minimum wages by sector from 1 June 2025: $408.80 for commerce, services and industry, $402.32 for textile maquila, and $272.53 for agriculture. The monthly figure is paid whatever the number of days in the month. Statutory benefits such as vacation, aguinaldo and severance are calculated on the daily minimum unless the agreed salary is higher. | Ministerio de Trabajo y Previsión Social: Decreto Ejecutivo No. 11, tarifas de salarios mínimos | El Salvador: private-sector employment under the Código de Trabajo, subject to the contract, any collective agreement and more favourable terms | |
| Eight hours a day, 44 a week | The ordinary day shift is at most eight hours a day and 44 hours a week. A night shift is at most seven hours a day and 39 a week, and a shift with more than four night hours counts as a night shift. | Código de Trabajo (Decreto 15), Asamblea Legislativa consolidated text, article 161 | ||
| Overtime is paid at double the hourly rate | Hours beyond the ordinary working day are paid with a 100% surcharge on the basic hourly wage, and night work carries a surcharge of at least 25%. Overtime may be agreed only occasionally, when unforeseen or special circumstances require it. | Código de Trabajo (Decreto 15), Asamblea Legislativa consolidated text, articles 168 to 170 | ||
| Fifteen days of paid vacation, plus 30% | After one year of continuous service an employee is entitled to 15 days of vacation, paid at the ordinary salary for that period plus a 30% premium. The employee must have worked at least 200 days in the year to qualify. The employer sets the vacation dates and gives 30 days of notice. | Código de Trabajo (Decreto 15), Asamblea Legislativa consolidated text, articles 177, 180 and 182 | ||
| Paid holidays named in the Labour Code | The Labour Code lists paid holidays on 1 January, Thursday, Friday and Saturday of Holy Week, 1 May, 6 August, 15 September, 2 November and 25 December, plus 3 and 5 August in San Salvador and the main local festival elsewhere. Additional days can be set by separate decree, so confirm the calendar for the payroll year. | Código de Trabajo (Decreto 15), Asamblea Legislativa consolidated text, article 190 | ||
| Aguinaldo of 15 to 21 days, paid 12 to 20 December | Every employer pays an annual aguinaldo bonus: at least 15 days of salary for one to three years of service, 19 days for three to ten years and 21 days from ten years. Employees with less than a year on 12 December receive a proportional amount. It is paid between 12 and 20 December. | Código de Trabajo (Decreto 15), Asamblea Legislativa consolidated text, articles 196 to 200 | ||
| An optional 30-day trial period | A contract may state that the first 30 days are a trial period, during which either side can end it without giving a reason. No new trial period can be agreed if the same parties sign a new contract for the same work within a year. | Código de Trabajo (Decreto 15), Asamblea Legislativa consolidated text, article 28 | ||
| Written contract, with a copy to the Labour Directorate | The employment contract, and any change or extension, must be in writing in three copies. The employer sends the third copy to the Dirección General de Trabajo within eight days. Work that is permanent by nature is treated as indefinite employment, even if the contract states an end date. | Código de Trabajo (Decreto 15), Asamblea Legislativa consolidated text, articles 18 and 25 | ||
| Dismissal without just cause: 30 days of pay per year | An employee on an indefinite contract dismissed without just cause is owed 30 days of basic salary for each year of service, pro rata for part years, and never less than 15 days. The salary used in the calculation is capped at four times the daily legal minimum wage. The law presumes a dismissal to be without just cause. | Código de Trabajo (Decreto 15), Asamblea Legislativa consolidated text, articles 55 and 58 | ||
| Sixteen weeks of maternity leave | A pregnant employee is entitled to 16 weeks of maternity leave, ten of which must be taken after the birth, with a benefit equal to 75% of basic salary. The cash benefit requires six months of service with the same employer before the expected birth date; the leave itself does not. | Código de Trabajo (Decreto 15), Asamblea Legislativa consolidated text, articles 309 and 311 | ||
| Three days of paternity leave in the Labour Code text | The consolidated Labour Code text grants three days of leave for the birth or adoption of a child, taken in one block from the birth or spread over the first 15 days. Check whether later legislation has extended it for the payroll year. | Código de Trabajo (Decreto 15), Asamblea Legislativa consolidated text, article 29, consolidated text as published by the Asamblea Legislativa | ||
| Pension contribution: 8.75% employer, 7.25% employee | The pension system contribution is 16% of the contribution base: 8.75% paid by the employer and 7.25% by the employee. Health insurance through the ISSS is a separate contribution on top. | Ley Integral del Sistema de Pensiones (Decreto 614), article 16 | ||
| A contractor that employs staff is their employer | The Labour Code treats contractors who carry out work for others with their own staff as employers, and makes contractor and subcontractor jointly liable for those workers. An intermediary that hires on behalf of an employer binds that employer. Ask a provider which Salvadoran entity employs the person and on what contract. | Código de Trabajo (Decreto 15), Asamblea Legislativa consolidated text, articles 4 and 5 | ||
| Old-age pension from 60 for men, 55 for women | The ISSS lists the old-age pension requirements as age 60 for men or 55 for women, with 15 to 25 years of contributions depending on age. | Instituto Salvadoreño del Seguro Social: trámite de pensión por vejez |