EOR Service in El Salvador

Hire, Onboard and Pay Employees in El Salvador Quickly and Efficiently

Hiring in El Salvador at a glance

CURRENCY
San Salvador
working hours
44 hours per week
public/bank holidays
13 public holidays
capital
United States Dollar (USD)
language
Spanish
date format
DD/MM/YYYY
remote workers
1.2M
tax year
Jan to Dec
minimum hourly salary
No minimum wage
CURRENCY
San Salvador
working hours
44 hours per week
public/bank holidays
13 public holidays
capital
United States Dollar (USD)
language
Spanish
date format
DD/MM/YYYY
tax year
Jan to Dec
payroll frequency
Monthly
GDP
USD 32.49 billion (2022)

Employer of Record in El Salvador

An El Salvador Employer of Record (EOR) plays a crucial role in simplifying hiring in El Salvador and ensures compliance with labor laws. EORs have a deep understanding of the local market and a wide pool of talent, making it efficient for them to find and hire qualified candidates. By teaming up with an EOR, businesses can concentrate on their main operations while delegating HR responsibilities, payroll management, and legal requirements to a dependable service provider.

Why use El Salvador EOR?

When foreign employers hire from El Savador, they face two challenges: 1) Starting a local entity 2) Staying compliant with local employment laws. Companies partner with an El Salvador EOR or PEO to overcome these hurdles in a cost-effective manner.

For instance, starting a local entity in El Salvador  can cost you several thousand dollars. Several processes including hiring a notarian, registering with local authorities, consulting company incorporation specialists, annual tax, etc can set you back by $300 to $10,000 depending upon the type of company you are setting up. 

Secondly, your hiring should be compliant with El Savador’s local laws. Laws around 13th month pay, health and safety regulations, union rights can surprise even the most experienced employers.

Partnering with an El Salvador EOR like Gloroots can help you easily hire and expand in the country without a local entity. An Employer of Record will ensure you are compliant with EL Savador’s labor laws and put any hiring risks to rest.

EOR Costs in El Salvador

Generally, El Salvador EOR/PEO services are offered at a monthly fee per employee or as a percentage of their salary. Additional charges might apply for personalized solutions or specialized services tailored to specific business needs. When considering the overall cost and benefits of partnering with an El Salvador EOR/PEO, companies should carefully evaluate these factors to make an informed decision.

Key Metrics For Foreign Employers 

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

Factors Global Ranking Interpretation
Rule of law 111 Indicates effectiveness of law enforcement
Labour-employer cooperation 100 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 76 Indicates average QS rankings
Labour productivity per employee n/a Indicates total output by the total labor input used to produce that output
Ease of finding skilled employees 88 Indicates findability of skilled talent
Workforce with tertiary education 101 Indicates % of workforce with PG degrees
Digital Skills n/a 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 El Salvador.

Why work in El Salvador?

What’s a Rich Text element?

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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

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Grow your team in El Salvador

Navigating the complexities of local employment regulations and effectively managing compliance, payroll, tax, and benefits when expanding your team in El Salvador is crucial.

With Gloroots' comprehensive global Employer of Record (EoR) service, you can confidently entrust the intricacies of payroll, tax, benefits, and compliance to our experienced team. This frees you up to focus on your core business functions, empowering your workforce and driving business growth. Our EoR service in El Salvador ensures strict adherence to all local laws and regulations, providing a seamless and efficient solution for successful team expansion in the country. With access to a diverse pool of outstanding talent and our market expertise, Gloroots' Recrew platform makes recruiting in El Salvador a smooth and rewarding process, contributing to your company's success and growth.

Risks of misclassification

Incorrectly categorizing employees in El Salvador, known as employee misclassification, can lead to legal and financial repercussions. This occurs when workers are wrongly classified as independent contractors or freelancers instead of full employees. Such misclassification can trigger claims for unpaid wages, benefits, and other entitlements that employees are legally entitled to.

Collaborating with a PEO/EOR ensures accurate employee classification, meaning that individuals are correctly designated as employees or contractors according to the law. This partnership guarantees compliance with labor regulations, meticulous management of payroll, and the provision of comprehensive benefits. By addressing the issue of misclassification, businesses can minimize potential liabilities and focus their efforts on core operations.

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Avoid hefty penalties with Gloroots.

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Employing in El Salvador

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

Income tax

Employee Income Tax

Employee Income Tax Rate Additional Fixed Amount
Up to $4,064.00 0% $0
$4,064.01 - $9,142.86 10% $212.12
$9,142.87 - $22,857.14 20% $720
Over $22,857.14 30% $3,462.86

Tax and social security contribution

Employer payroll contributions

Contribution Type Rate Additional notes
Social Security 7.50% Up to 1,000 USD; Above 1,000 USD: 51.49 USD
AEP-Pension Fund 7.75% Maximum 6,523.20 USD
INESAFORP 1.00% For companies with >10 employees, based on salary <1,000 USD
Total Employment Cost 15.25% – 16.25% 9.00%

Employee payroll contributions

Contribution Contribution Rate Additional Notes
Social Security 3.00% Up to 1,000 USD; Above 1,000 USD: 30.00 USD
AEP (Pension Fund) 7.25% -
Total Employee Cost 10.25% -

Separation

Termination process

The procedure for ending employment differs based on the terms outlined in the employment or collective agreement. It takes into account factors like contract type, duration of service, and the grounds for termination.

Severance pay

Severance compensation in El Salvador is governed by particular rules and will differ based on the factors behind the termination of employment. For instance, resigning employees or the conclusion of an employment contract's specified duration do not warrant severance payment.

In instances where severance is applicable, it's typically computed as 30 days of salary for each year of service.

Notice periods

In El Salvador, the notice period is determined by the terms of the employee's employment contract or collective agreement, rather than being a legal requirement. Nevertheless, it is customary to ask employees to give at least 7 days' notice after successfully completing their probationary period.

Probation periods

The length of the probationary period in El Salvador is contingent upon the nature of the position and is specified in the employment contract. Generally, probationary periods are limited to a maximum of 30 days.

Start Hiring in El Salvador today

When hiring globally, ensuring compliance comes with its own set of battles. Employers must ensure all hiring and onboarding activities adhere to employment laws, payroll procedures, DE&I compliance, GDPR and similar data protection, etc. If you think it is hard to set up local entities and start hiring, keeping up with a dynamic compliance landscape is far harder. 

Gloroots helps you minimize all these efforts by providing a single window to manage all these tasks. Our in-house experts fully shield you from cross-border employment and payroll compliance risks. We do this by helping you with generating employment contracts, on-time payments, compliant benefits, while you focus only on screening talent. 

Our promise is a stress-free global employment experience for both you and your employee.

Contact our experts today to kickstart your global hiring campaign.

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Experience Seamless Hiring in El Salvador?

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

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