Payroll and Benefits Guide - El Salvador

El Salvador


United States Dollar (USD)


San Salvador

Employer Taxes

15.25% – 16.25%

Date Format


Fiscal Year

1 Jan – 31 Dec

Fun Facts

El Salvador is the smallest country in Central America and is roughly the size of the state of Massachusetts in the United States.

El Salvador is known as the “Land of Volcanoes” because it has more than 20 volcanoes, some of which are still active.

El Salvador has a beautiful coastline along the Pacific Ocean, with stunning beaches that are popular for surfing and other water activities.

Home to the Amazon Rainforest.

Brazil has the world’s longest beach, Praia do Cassino.

Brazil has won the FIFA World Cup for five times already.



Employee Payroll Tax

Social Security3.00%
AEP (Pension Fund)7.25%

Employer Payroll Tax

Social Security7.50%
AEP -Pension Fund7.75%


Payroll Cycle

The payroll cycle in El Salvador must be made on the same day of the month and no later than one working day after the conclusion of the pay cycle, regardless of whether the payroll cycle is weekly, biweekly, or monthly.

13th Salary

Employees are frequently given their 13th month’s wage as a Christmas bonus in El Salvador. The payout is due around December 20th, and the amount is determined by the number of years of service. Employees with one to three years of service receive 15 days of compensation, those with three to ten years receive 19 days, and those with more than ten years receive 21 days.

Work Hours and Week

The typical work week in El Salvador is 44 hours long, spread out across five and a half days at an average rate of 8 hours per day.


The employment contract and collective agreements govern all labor performed in excess of the regular weekly working hours, which is compensated as overtime. Except for minors, there are no upper limits on the amount of hours permitted.

All extra hours beyond 44 per week are typically compensated at a rate equal to 200.00% of the employee’s regular income.



Paid Time Off

An employee is entitled to 15 days of paid annual leave after working for the company for at least a year (or 200 days in a calendar year). The calculation for the annual leave runs from December 12 to December 12.

Prior to the employee’s departure, paid time off is granted at a rate equal to 130.00% of the employee’s usual income.

Unused vacation days are forfeited and cannot be made up financially.

Public Holidays

El Salvador has 13 public holidays.

Sick Days

In El Salvador, an employee’s right to sick leave is based on the number of years of service:

  • The employee is entitled to 75.00% of the base salary for 20 days after one to five months of service.
  • An employee who has worked for five months to a year is entitled to 75.00% of their basic pay for 40 days.
  • The employee is entitled to 75.00% of the base salary for 60 days after one year of employment or more.

Maternity Leave

Employees who are female are entitled to up to 16 weeks of paid maternity leave in El Salvador, computed at a rate of 75.00% of their usual pay. A medical document stating the employee’s pregnant status and anticipated delivery date is required.

Employees are required to take at least six weeks off prior to the projected due date and up to ten weeks off following the birth of the child. If there are any illnesses or issues related to the pregnancy, the employee may ask for an extension of the maternity leave.

After the fourth month of pregnancy, woman cannot be assigned any physically demanding task for her health and safety.

Paternity Leave

In El Salvador, employees are required to use their three days of paternity leave within the first 15 days following the child’s birth. The amount of the leave is equal to 100% of the employee’s usual wage.

Parental Leave

Employees in El Salvador are entitled to one day of paid bereavement leave if they have lost a member of their immediate family.


Termination Process

The manner of termination varies depending on the terms of the employment contract or collective bargaining agreement and is determined by the type of contract, the duration of service, and the reason for termination.

Notice Period

The notice time is outlined in the employee’s employment contract or collect agreement; it is not required by law in El Salvador. However, it is customary to ask for a minimum of 7 days’ notice from an employee once their probation has over.

Severance Pay

Severance compensation in El Salvador is governed by particular rules and varies depending on the circumstances surrounding the employment termination. For instance, severance is not offered when an employee resigns or after the duration of the work contract has passed.

Severance pay is often computed as 30 days of compensation for each year of employment, if it is necessary.

Probation Period

Probation Period

The length of the probationary term in El Salvador varies depending on the position and is spelled out in the employment contract. Probationary periods are typically limited to 30 days.


A work permit and a temporary residence permit must be obtained by any foreign nationals who wish to work in El Salvador. The original validity of the Work Permit and Temporary Residence Permit is one or two years, and they are both renewable for up to an additional five years.

Citizens of Central American nations may submit a direct application for permanent residency. After one year of possessing a Temporary Resident Permit, citizens of Spain or other Spanish-speaking nations in Latin America are eligible to apply. After three consecutive TRP renewals, all other foreign nationals are eligible to apply for permanent residency.


In El Salvador, the normal VAT rate is 13%.