EOR Service in Ecuador

Shraddha Saxena

Hire, Onboard and Pay Employees in Ecuador Quickly and Efficiently

Hiring in Ecuador at a glance

CURRENCY
United States Dollar (USD)
working hours
40 hours per week
public/bank holidays
13 days
capital
Quito
language
Spanish
date format
DD/MM/YYYY
remote workers
1.2M
tax year
1 January - 31 December
minimum hourly salary
No minimum wage
CURRENCY
United States Dollar (USD)
public/bank holidays
13 days
capital
Quito
language
Spanish
date format
DD/MM/YYYY
tax year
1 January - 31 December
payroll frequency
Monthly
GDP
$115.05B (2022)
working hours
40 hours per week

Employer of Record in Ecuador

To expand your business and hire local talent in Ecuador, you may want to consider engaging with an Employer of Record (EOR) service. An EOR can help you navigate and ensure compliance with local labor laws, allowing you to focus on your core business activities.


Why use Ecuador EOR?

Businesses partner with an Ecuador EOR mainly for two reasons:

1) To hire local talent without setting up an entity: Setting up your business in Ecuador will cost you up to $1500. Costs like notary fees and consultation fees will further exacerbate costs. 


2) To comply with changing labor laws: Labor laws in Ecuador have some distinct elements which can be quite daunting for foreign employers to keep up with. For instance, employees in Ecuador are entitled to a thirteenth salary, paid in December, and a fourteenth salary, paid in the middle of the year. These are equivalent to an extra month's salary each, with the fourteenth salary being calculated based on the minimum wage. 


Keeping up with all this needs you to divert attention from core business activities. Particularly, when hiring foreign talent, much attention needs to be spent on hiring the right candidate and adhering to budgetary constraints. With an Ecuador EOR, like Gloroots, you can use our entity to onboard talent and hire for your business. And by offloading compliance, payroll onto us, you can focus on your business’ growth.

EOR Costs in Ecuador

The cost of Ecuador EOR/PEO services in Ecuador may differ based on various factors, such as the number of employees, the extent of services needed, and the intricacy of the project. The pricing structure for Ecuador EOR/PEO services usually involves a monthly fee per employee or a percentage of the employee's salary. Extra charges may apply for additional services or customization.

Key Metrics For Foreign Employers 

Ecuador ranks 84th in INSEAD’s The Global Talent Competitiveness Index(2023). Ecuador’s time-zone advantage can help you set up teams that can work in near-to-similar time zones as the USA, Canada and other significant economies of the west. 

The table below depicts key indicators from the Global Talent Competitiveness Report for employers wishing to hire from Ecuador.

Factors Global Ranking Interpretation
Rule of law 83 Indicates effectiveness of law enforcement
Labour-employer cooperation 80 Indicates positive labor-employee relationships
Reading Maths, and Science n/a Indicates average scores in OECD's survey of 15-year old students
University Ranking 66 Indicates average QS rankings
Labour productivity per employee 86 Indicates total output by the total labor input used to produce that output
Ease of finding skilled employees 69 Indicates findability of skilled talent
Workforce with tertiary education 87 Indicates % of workforce with PG degrees
Digital Skills 40 Indicates prevalence of advanced digital skills in the population

Source: The Global Talent Competitiveness Index 2022

Through the Gloroots’ Recrew platform, you can discover amazing talent in Ecuador.

Why work in Ecuador ?

What’s a Rich Text element?

The rich text element allows you to create and format headings, paragraphs, blockquotes, images, and video all in one place instead of having to add and format them individually. Just double-click and easily create content.

Static and dynamic content editing

A rich text element can be used with static or dynamic content. For static content, just drop it into any page and begin editing. For dynamic content, add a rich text field to any collection and then connect a rich text element to that field in the settings panel. Voila!

How to customize formatting for each rich text

Headings, paragraphs, blockquotes, figures, images, and figure captions can all be styled after a class is added to the rich text element using the "When inside of" nested selector system.

Risks of misclassification

"Challenges of Incorrect Worker Classification" pertains to the incorrect labelling of workers, such as designating them as independent contractors or exempting them from specific regulations when they should legally be employees with rights. In Ecuador, engaging a PEO/EOR effectively mitigates these risks. It guarantees adherence to labor laws, precise worker classification, streamlined payroll management, and employee benefit provisions, enabling employers to focus on their core business activities. Delegating these tasks to seasoned experts ensures a smooth and compliant journey through the Ecuador labor landscape, promoting confidence and operational efficiency.

Contact Us

Avoid hefty penalties with Gloroots.

Use our free employee misclassification risk calculator to estimate your risk level.

Calculate Now

Employing in Ecuador

What’s a Rich Text element?

The rich text element allows you to create and format headings, paragraphs, blockquotes, images, and video all in one place instead of having to add and format them individually. Just double-click and easily create content.

Static and dynamic content editing

A rich text element can be used with static or dynamic content. For static content, just drop it into any page and begin editing. For dynamic content, add a rich text field to any collection and then connect a rich text element to that field in the settings panel. Voila!

How to customize formatting for each rich text

Headings, paragraphs, blockquotes, figures, images, and figure captions can all be styled after a class is added to the rich text element using the "When inside of" nested selector system.

Tax

Tax and Social Security contribution:

Employer Payroll Contribution 

Payroll Tax Rate
Social Security 12.15%
Reserve Fund (after 1 year) 8.33%
Total Employment Cost 12.15%

Employee Payroll Contribution

Payroll Tax Rate
Social Security 9.45%
Total Employee Cost 9.45%

Employee Income tax

Rate Income
0.00% 0-11,722 USD
5.00% 11,722.01 USD – 14,935 USD
10.00% 14,935.01 USD – 18,666 USD
12.00% 18,666.01 USD – 22,418 USD
15.00% 22,418.01 USD – 32,783 USD
20.00% 32,783.01 USD – 43,147 USD
25.00% 43,147.01 USD – 53,512 USD
30.00% 53,512.01 USD – 63,876 USD
35.00% 63,876.01 USD – 103,644 USD
37.00% 103,644 USD and Above

Separation

Termination 

The termination procedure depends on the employment contract, collective agreements, contract type, and the reason for ending the employment.

Severance Pay

Severance pay in Ecuador is calculated at one month's salary for each year of service, with proportional compensation for part-years worked. The minimum payout is equivalent to three monthly salaries, and the maximum can go up to 25 monthly salaries. Employers also have the option to provide a termination bonus, amounting to 25.00% of monthly wages for each year of service completed.

Notice Period

In Ecuador, the notice period is determined by the employee's employment contract or collective agreement, and it is not mandated by law.

Probation period

In Ecuador, the length of the probationary period varies based on the role and is defined in the employment contract. Typically, probation periods extend up to three months.

Start Hiring in Ecuador today

When expanding your global workforce, maintaining compliance can be a complex challenge. Employers must ensure that all aspects of hiring and onboarding align with employment laws, payroll procedures, diversity, equity, and inclusion (DE&I) requirements, as well as data protection regulations like GDPR. If establishing local entities and commencing hiring is already a daunting task, staying in sync with a constantly evolving compliance landscape can be even more demanding.

At Gloroots, we simplify this process by offering a unified platform to manage all these responsibilities. Our in-house experts provide comprehensive protection against the complexities of cross-border employment and payroll compliance. We assist in creating employment contracts, ensuring timely payments, and delivering compliant benefits, allowing you to focus solely on talent acquisition.

Our commitment is to deliver a stress-free global employment experience for both you and your employees.

Get in touch with our experts today to kickstart your global hiring campaign.

Grow your team in Ecuador

Growing your team in Ecuador requires making strategic hires at the right time and placing them in appropriate positions. Expanding in the Ecuador comes with its own set of challenges, including compliance, payroll, tax, and benefits management. At Gloroots, our global Employer of Record (EoR) service can alleviate these complexities, ensuring compliance and enabling you to concentrate on what truly matters: your employees and business expansion. Partner with us to simplify the process and succeed in Ecuador's dynamic market.

Are you Ready to
Experience Seamless Hiring in Ecuador ?

Let us take care of all your employment needs. We guarantee easy onboarding & compliant workforce management in Ecuador .

Speak to our Expert