Employer of record in Guatemala: costs, rules and how to hire
Hire someone in Guatemala 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 Guatemala 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 Guatemala 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 Guatemala: the short version
Say you are hiring a software developer in Guatemala City at Q15,000 a month. The employer cost has three fixed parts on top of salary: 10.67% to the IGSS, an aguinaldo worth a month of salary each year, and Bono 14, worth another month. Spread across the year, that comes to Q19,100.50 a month, or Q229,206 a year, before the provider fee.
The question to settle before any rate is who employs your hire. The Labour Code makes a company that receives the services of workers hired by another company responsible to those workers. With an employer of record, that means your company is not a bystander, so ask the provider which Guatemalan company employs the person and what it does to keep every statutory payment current.
Your first hire in Guatemala in five decisions
Five things settle a Guatemalan hire, and each figure below is worked through further down.
- Entity or EOR. No fixed headcount decides it. Compare the annual fee with running IGSS filings, the two extra salaries and payroll yourself, and remember that the Code holds the client company responsible for supplied workers either way.
- Employee or contractor. A contractor label does not change what the work is. Where the person works inside your team under your direction, employ them.
- Budget line. On Q15,000 a month: Q1,600.50 IGSS, Q1,250 for the aguinaldo and Q1,250 for Bono 14, giving Q19,100.50 a month.
- Exit cost. An unjustified dismissal after the trial period costs a month of salary per year of service.
- Realistic start. After the employing company, the written contract and the IGSS registration are settled, not from an advertised onboarding window.
How to hire employees in Guatemala
An employer of record employs your hire through a Guatemalan company, signs the contract, runs payroll and holds the IGSS registration, while you direct the work. Article 81 of the Labour Code adds a point worth knowing: where companies hire workers to provide their services to another company, the company receiving the services is responsible to those workers. Treat that as a reason to check the provider, not to avoid it.
I read article 81 only as the compiled Code states it. How far that responsibility reaches for a foreign client of a provider is a question for the provider and for Guatemalan counsel.
From an agreed role to the first payroll
The steps are short, and the employing company is the one to settle first.
- Define the duties, the workplace and whether the role is in the Department of Guatemala, because the minimum wage differs inside and outside it.
- Verify the employing Guatemalan company.
- Agree the written terms: salary, schedule against the 48-hour week, vacation, the trial period and the treatment of the aguinaldo and Bono 14.
- Register the hire with the IGSS through the employer.
- Set the payday and the dates for the aguinaldo halves and Bono 14.
How long the first hire takes, and what sets the date
The contract and the IGSS registration set the date, not a number of weeks. Ask which of these is outstanding, because that is the one holding your start: the employing company, the signed contract, and the IGSS registration before the first payroll.
EOR, entity, or contractor in Guatemala?
Guatemalan employer cost is higher than the IGSS rate suggests, because two extra months of salary sit on top of it every year. Both are compulsory and owed whoever employs the person, so a quote that shows only the IGSS rate is showing about half of the extra cost.
What can a Q15,000 monthly salary cost?
This illustration assumes an unchanged salary for a full year and the IGSS employer rate. The aguinaldo and Bono 14 are spread across twelve months so they can be budgeted.
| Budget item | Monthly | Annual illustration |
|---|---|---|
| Gross salary | Q15,000.00 | Q180,000.00 |
| IGSS, employer 10.67% | Q1,600.50 | Q19,206.00 |
| Aguinaldo, a month of salary | Q1,250.00 | Q15,000.00 |
| Bono 14, a month of salary | Q1,250.00 | Q15,000.00 |
| Subtotal | Q19,100.50 | Q229,206.00 |
| Company benefits, equipment, any other payroll levies and the provider fee | Add the agreed costs | |
Employee deductions are separate money: on the same salary the employee pays Q724.50 to the IGSS, 4.83%, before income tax is withheld.
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 Guatemalan company that employs your hire.
- The IGSS contribution and any other payroll levies on the invoice.
- The aguinaldo and Bono 14, and whether they are billed monthly or when paid.
- The service fee, deposit and invoice tax.
- The cost of ending the employment, including the dismissal 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 Guatemalan company
Plan the move around years of service, because the dismissal indemnity counts them. Settle in writing how the accrued aguinaldo, Bono 14 and vacation balance are paid or carried, and take Guatemalan advice on whether service with the provider counts once the person joins your company.
Read this in full under “What an employer of record adds to the employment cost”.
What should you budget for hiring in Guatemala?
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: 10.67%
- Benefits and EOR fee: quoted per hire
The numbers behind this figure
| Cost | Amount |
|---|---|
| Gross salary | 100 |
| Employer social contributions | 10.67% |
| Benefits and EOR fee | Quoted per hire |
Source: ISSA, 2024
Published EOR base fees among providers covering Guatemala 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
| Side | IGSS rate | On Q15,000 a month |
|---|---|---|
| Employer | 10.67% | Q1,600.50 |
| Employee | 4.83% | Q724.50 |
| Total | 15.5% | Q2,325.00 |
The IGSS note I read is from 2022, so ask the provider to confirm the rates on the payslip for the payroll year, and whether any other payroll levies appear on the invoice.
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 IGSS filings and the employer-side administration. What it does not buy is the cost of employing the person. Gross pay, the aguinaldo, Bono 14 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: Instituto Guatemalteco de Seguridad Social, contribution rates, captured September and October 2026.
Source: Ley de Actualización Tributaria, Decreto 10-2012, captured September and October 2026.
Average salary in Guatemala by occupation
Gross monthly earnings of employees per ISCO-08 occupation group, in GTQ, from the ILO's official labour statistics. These stored survey figures for Guatemala 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 (GTQ) | Approx. USD |
|---|---|---|
| All occupations | 3,846 | $501 |
| Managers · ISCO 1 | 11,203 | $1,459 |
| Professionals · ISCO 2 | 7,572 | $986 |
| Technicians and associate professionals · ISCO 3 | 6,185 | $805 |
| Clerical support workers · ISCO 4 | 5,312 | $692 |
| Service and sales workers · ISCO 5 | 3,742 | $487 |
| Skilled agricultural, forestry and fishery workers · ISCO 6 | 2,529 | $329 |
| Craft and related trades workers · ISCO 7 | 3,206 | $417 |
| Plant and machine operators and assemblers · ISCO 8 | 4,328 | $564 |
| Elementary occupations · ISCO 9 | 2,336 | $304 |
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 Guatemala
- 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 Guatemala 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 Guatemala?
For most hires through an employer of record, expect an indefinite contract. The ordinary employment of a person in an ongoing role is indefinite, and it is the contract the trial period, notice and dismissal rules are written for.
Trial period
In every indefinite contract the first two months are a trial period, unless the parties agree a shorter one. During it either side can end the contract without liability. The Code prohibits faking a trial period to avoid the rights of an indefinite contract.
Notice when an employee resigns
An employee who resigns after the trial period gives written notice: a week before six months of service, ten days from six months to a year, two weeks from one to five years, and a month after five years, unless the contract says otherwise.
Put the employment terms in writing
State the employer, the duties, the workplace, the start date, the salary, the schedule against the 48-hour week, the vacation, the trial period, and the payment dates for the aguinaldo and Bono 14.
Misclassification risk
A contractor agreement for someone who works inside your team, on your schedule and under your direction, describes employment. 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 works under your direction, employ them.
Source: Código de Trabajo with its reforms (Oficina Nacional de Servicio Civil), captured September and October 2026.
What catches employers out in Guatemala
Six points decide whether a Guatemalan payroll is right, and most of them are payments that arrive outside the monthly salary. Ask the provider how each one is handled before the first payslip.
| Point | Why it changes the decision |
|---|---|
| The client company carries responsibility | Article 81 makes the company receiving supplied workers' services responsible to them, so the provider's compliance matters to you. |
| Two extra months of salary | The aguinaldo and Bono 14 each add a month of salary a year, about 17% on top of pay before the IGSS. |
| The aguinaldo is split across two months | Half is paid between 1 and 15 December and half between 1 and 15 January, so it touches two payroll years. |
| Minimum wage depends on place and activity | Rates differ inside and outside the Department of Guatemala, and for agricultural, non-agricultural and export and maquila work. |
| The trial period is two months | Either side can end the contract without liability in the first two months, and only then. |
| Exit cost grows with service | An unjustified dismissal after the trial period costs a month of salary per year, with no cap in the text I read. |
A seventh point is the date of the rules. The Code text I read is a compilation with reform notes, so ask the provider whether later legislation has changed a rule you are relying on.
Source: Ministerio de Trabajo y Previsión Social, salario mínimo 2026, captured September and October 2026.
What taxes and social contributions apply in Guatemala?
One institution collects the social security contributions. The IGSS states the employer contribution as 10.67% of salary and the employee's as 4.83%, 15.5% in total.
Income tax on salaries
Employment income is taxed at 5% of taxable income up to Q300,000 a year, and Q15,000 plus 7% of the excess above that. The law lets employees deduct up to Q60,000 a year, of which Q48,000 is for personal expenses without receipts and Q12,000 is a credit for VAT paid on personal purchases. The employer withholds the tax through payroll, so ask the provider for the withholding calculation behind the payslip.
Pensions
Pensions sit inside the IGSS system, so the employer's part is the monthly IGSS contribution. Any private pension is a company benefit to agree separately.
What pay and leave should your offer in Guatemala 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: 15 days
- Public holidays: 11 days
- The rest of the year: 339 days
The numbers behind this figure
| Entitlement | Days a year |
|---|---|
| Paid annual leave (statutory minimum) | 15 days |
| Public holidays (national) | 11 days |
| Total statutory paid days off | 26 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 Guatemala?
Guatemala sets its minimum wages each year by government agreement, by economic activity and by area. For 2026 the non-agricultural minimum in the Department of Guatemala is Q4,002.28 a month, plus a Q250 incentive bonus, Q4,252.28 in total. Outside the department it is Q3,816.90 plus the bonus. For a professional role it rarely binds, but it decides the floor for the IGSS minimum contribution.
Hours and overtime
The working week is long by regional standards, and overtime has a single surcharge.
| Topic | Rule in the Labour Code |
|---|---|
| Daytime hours | At most eight hours a day and 48 a week. |
| Night hours | At most six hours a day and 36 a week. |
| Overtime | At least 50% above the minimum wage or the higher agreed salary. |
The aguinaldo and Bono 14
Both are worth a month of ordinary salary for a full year and a proportional part for less. The aguinaldo year runs from 1 December to 30 November, and it is paid in two halves, between 1 and 15 December and between 1 and 15 January. Bono 14 is calculated on the average salary of the year from 1 July to 30 June. Agree the dates in the contract, because they change which payroll month carries the cost.
Source: Ministerio de Trabajo y Previsión Social, aguinaldo, captured September and October 2026.
Source: Ministerio de Trabajo y Previsión Social, Bono 14, captured September and October 2026.
Read this in full under “What catches employers out in Guatemala”.
What benefits and leave are employees entitled to in Guatemala?
Statutory leave in Guatemala is simple to read. Vacation is 15 working days a year after each year of service, maternity leave is 84 days at full pay, and a father gets two paid days for the birth of a child.
Leave entitlements
| Leave | Statutory rule |
|---|---|
| Vacation | At least 15 working days of paid vacation after each year of continuous work for the same employer. |
| Maternity leave | Paid rest at 100% of salary for 30 days before the birth and 54 after, 84 days in all; days not taken before the birth move to after it. |
| Birth of a child | Two days of paid leave for the father. |
Holidays
The Labour Code lists the paid holidays: 1 January, Holy Thursday, Friday and Saturday, 1 May, 30 June, 15 September, 20 October, 1 November, the afternoons of 24 and 31 December, 25 December and the local festivity of the workplace. Confirm the local festivity for each workplace with the provider.
What happens if you need to end employment in Guatemala?
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 | 27 weeks |
| Total statutory exit cost | 27 weeks |
Guatemala sits at number 19 of 190 countries for statutory exit cost in our Termination Cost Index.
What are the termination and compliance rules in Guatemala?
Ending employment without just cause has a set price in Guatemala. After the trial period, an unjustified dismissal costs an indemnity of one month of salary per year of continuous service, and a proportional part for less than a year. The Code calculates it on the average salary of the last six months of the contract.
What an exit costs
The figures below are our arithmetic on article 82 for an unchanged Q15,000 monthly salary, in whole years of service. Ask the provider what it puts in the salary base, because that decides the final number.
| Service | Dismissal indemnity |
|---|---|
| Two years | Q30,000 |
| Five years | Q75,000 |
| Ten years | Q150,000 |
During the trial period
Within the first two months of an indefinite contract, either side can end it without liability.
Responsibility for supplied workers
Article 81 makes the company receiving the services of supplied workers responsible to them. Ask the provider to confirm in writing which company employs your hire and how it keeps the IGSS, the aguinaldo and Bono 14 paid on time.
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 Guatemala
Compare the employing entity, itemised costs, local support, payroll deadlines and what happens if you change or end the arrangement.
Questions about hiring in Guatemala
What does an employer of record do in Guatemala?
An employer of record employs your hire through a Guatemalan company, signs the contract, runs payroll and holds the IGSS registration, while you direct the work. Because the Labour Code makes a company receiving supplied workers' services responsible to them, ask which company employs the person.
Can I hire in Guatemala without setting up my own company?
Yes, through a provider whose Guatemalan company employs the person. Confirm the employing company and how it keeps statutory payments current before you compare prices.
Is an EOR the same as a PEO?
No. With an employer of record the provider's Guatemalan 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 Guatemala?
For 2026 the non-agricultural minimum in the Department of Guatemala is Q4,002.28 a month plus a Q250 incentive bonus, and Q3,816.90 plus the bonus elsewhere. Agricultural and export and maquila work have their own rates.
How much does an employee in Guatemala cost on top of salary?
On Q15,000 a month: IGSS Q1,600.50, plus the aguinaldo and Bono 14 at Q1,250 each when spread across the year, giving Q19,100.50 a month before company benefits and the provider fee.
What are the aguinaldo and Bono 14?
Two compulsory extra payments, each worth a month of ordinary salary for a full year of service. The aguinaldo is paid in halves between 1 and 15 December and between 1 and 15 January; Bono 14 is calculated on the year from 1 July to 30 June.
What are the IGSS contribution rates?
The IGSS states 10.67% for the employer and 4.83% for the employee, 15.5% in total.
How is salary taxed?
At 5% of taxable income up to Q300,000 a year, and Q15,000 plus 7% of the excess above that, withheld by the employer through payroll.
How much paid vacation does an employee get?
At least 15 working days of paid vacation after each year of continuous work for the same employer.
How long is maternity and paternity leave?
Maternity leave is 84 days at 100% of salary, 30 before the birth and 54 after. A father gets two days of paid leave for the birth of a child.
What are the working hours and overtime rules?
At most eight hours a day and 48 a week in daytime work, and six hours a day and 36 a week at night. Overtime is paid at least 50% above the minimum or the agreed salary.
What does it cost to dismiss an employee?
After the trial period, an unjustified dismissal costs one month of salary per year of continuous service, and a proportional part for less than a year, calculated on the average salary of the last six months.
Is there a probation period?
Yes. The first two months of an indefinite contract are a trial period unless the parties agree a shorter one, and either side can end the contract during it without liability.
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, Bono 14 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 |
|---|---|---|---|---|
| Eight hours a day, 48 a week | The ordinary daytime working day is at most eight hours, and the week at most 48 hours. Night work is capped at six hours a day and 36 a week. | Código de Trabajo (Decreto 1441), compiled with its reforms by the Oficina Nacional de Servicio Civil, article 116 | ||
| Overtime paid at 50% extra | Work beyond the ordinary working day is overtime and is paid at least 50% above the minimum wage or the higher salary the parties agreed. | Código de Trabajo (Decreto 1441), compiled with its reforms by the Oficina Nacional de Servicio Civil, article 121 | ||
| Fifteen working days of vacation a year | Every employee is entitled to paid vacation after each year of continuous work for the same employer, of at least 15 working days. | Código de Trabajo (Decreto 1441), compiled with its reforms by the Oficina Nacional de Servicio Civil, article 130 | ||
| Aguinaldo: a month of salary, paid in two halves | The aguinaldo equals 100% of a month of ordinary salary for a full year of continuous work, and is proportional for less. The year runs from 1 December to 30 November. Half is paid between 1 and 15 December, and the other half between 1 and 15 January. | Ministerio de Trabajo y Previsión Social: aguinaldo (Decreto 76-78) | ||
| Bono 14: another month of salary | Bono 14 is a compulsory annual bonus equal to a month of ordinary salary per year of continuous service, or a proportional part. It is calculated on the average salary of the year from 1 July to 30 June, under Decree 42-92. | Ministerio de Trabajo y Previsión Social: Bono 14 (Decreto 42-92) | ||
| Minimum wage: Q4,002.28 a month plus a Q250 bonus | For 2026, the non-agricultural minimum wage in the Department of Guatemala is Q4,002.28 a month, plus the Q250 incentive bonus, Q4,252.28 in total. Outside the department it is Q3,816.90 plus the bonus. Agricultural and export and maquila work have their own rates. | Ministerio de Trabajo y Previsión Social: salario mínimo 2026 | Guatemala: private-sector employment under the Código de Trabajo, subject to the contract, any collective agreement and more favourable terms | |
| IGSS: 10.67% employer, 4.83% employee | The IGSS states that the employer contribution is 10.67% of the employee's salary, which with the employee's 4.83% makes 15.5% in total. | Instituto Guatemalteco de Seguridad Social: note on contribution rates | ||
| Income tax on salaries: 5% and 7% | Employment income is taxed at 5% of taxable income up to Q300,000 a year, and Q15,000 plus 7% of the excess above that. | Ley de Actualización Tributaria (Decreto 10-2012), article 73 | ||
| Unjustified dismissal: a month of salary per year | If an indefinite contract ends after the trial period through unjustified dismissal, the employer pays an indemnity of one month of salary per year of continuous service, and a proportional part for less than a year. | Código de Trabajo (Decreto 1441), compiled with its reforms by the Oficina Nacional de Servicio Civil, article 82 | ||
| Notice from an employee who resigns | An employee who resigns from an indefinite contract after the trial period gives notice of a week before six months of service, ten days from six months to a year, two weeks from one to five years, and a month after five years. | Código de Trabajo (Decreto 1441), compiled with its reforms by the Oficina Nacional de Servicio Civil, article 83 | ||
| A trial period of two months | In every indefinite contract the first two months are a trial period, unless the parties agree a shorter one. Either side can end the contract during it without liability. | Código de Trabajo (Decreto 1441), compiled with its reforms by the Oficina Nacional de Servicio Civil, article 81, as reformed by Decreto 18-2001 | ||
| A company that uses supplied workers is responsible for them | Where one or more companies hire workers to provide their services to another company, the company receiving the services is responsible to those workers under the law. | Código de Trabajo (Decreto 1441), compiled with its reforms by the Oficina Nacional de Servicio Civil, article 81, as reformed by Decreto 18-2001 | ||
| Eighty-four days of maternity leave, two days for fathers | A mother is entitled to paid rest at 100% of salary for 30 days before the birth and 54 after, 84 days in all. The employer grants a father two days of paid leave for the birth of a child. | Código de Trabajo (Decreto 1441), compiled with its reforms by the Oficina Nacional de Servicio Civil, articles 152 and 61 | ||
| Paid holidays set in the Labour Code | The Labour Code lists the paid holidays: 1 January, Holy Thursday, Friday and Saturday, 1 May, 30 June, 15 September, 20 October, 1 November, the afternoons of 24 and 31 December, 25 December and the local festivity. | Código de Trabajo (Decreto 1441), compiled with its reforms by the Oficina Nacional de Servicio Civil, article 127 |