The coqui, a tiny tree frog native to Puerto Rico, is an iconic symbol of the island.
Payroll and Benefits Guide - Puerto Rico
Fun Facts
Puerto Rico is known as the “Island of Enchantment” or “Isla del Encanto” in Spanish.
Puerto Rico has produced many notable artists, including Ricky Martin, Daddy Yankee, and Rita Moreno.
The official languages of Puerto Rico are Spanish and English.
The island is famous for its coffee production.
The longest river in Puerto Rico is the Río Grande de Loíza.
Contributions
Employee Payroll Tax
| Contribution Type | Rate |
| FICA Social Security | 6.20% |
| FICA Medicare | 1.45% |
| FICA Medicare | 0.90% |
| FUTA (Federal Unemployment Tax) | 6.00% |
Employer Payroll Tax
| Contribution Type | Rate |
| FICA Social Security | 6.2% |
| FICA Medicare | 1.45% |
| FICA Medicare | 0.90% |
| FUTA (Federal Unemployment Tax) | 0.60% – 6.00% |
| SUTA (State Unemployment Tax) | 1.40% – 5.40% |
| SUTA New Employer Tax | 2.90% |
Payroll
Payroll Cycle
The payroll cycles are bi-weekly, monthly or semi-monthly
13th Salary
13th-month payments are mandatory. Employers with a workforce in excess of 21 employees must by law pay a 13th-month salary in December equating to 2% of the employees’ wages or not more than 600 USD.
Work Hours and Week
The standard working week in Puerto Rico consists of 40 hours a week, 8 hours per day.
Overtime
The standard working week in Puerto Rico consists of 40 hours a week, 8 hours per day.ny amount over 2 hours per day is paid at a rate of 200% salary. Exemptions in place for certain workers/industries.
Leave
Paid Time Off
The annual leave entitlement in Puerto Rico is dependent on the seniority of the employee.
Public Holidays
The annual leave entitlement in Puerto Rico is dependent on the seniority of the employee
Sick Days
Following 12 months of consecutive service at a company, an employee is entitled to six days of paid leave for severe diseases.
Maternity Leave
An employee in Puerto Rico is entitled to a maternity leave of eight weeks, four weeks of which is generally taken before the birth and four weeks after.
An employee can start maternity leave as late as one week before their predicted due date and can return just two weeks after the child’s birth provided the employee can present a medical certificate.
Maternity leave can be extended to 20 weeks following a pregnancy-related complication, however, the additional 12 weeks will be unpaid.
Paternity Leave
Private sector employees can choose to take six months of job-protected unpaid leave.
Parental Leave
Employers with a workforce of 50 employees or more can provide their employees with 12 weeks of unpaid leave for the birth of a new-born child, the placement of an adoptive/foster child, to care for an immediate family member, or to take medical leave when an employee is unable to work under the U.S. Federal Family and Medical Leave Act (FMLA).
Termination
Termination Process
The termination process varies according to the employment agreement or collective agreement in place and is based on the type of contract and reason for termination. Employers must have just cause to dismiss an employee based on the employee’s conduct or behavior.
Notice Period
In Puerto Rico, notice periods are not mandatory.
Severance Pay
Severance pay is only required if there is termination without just cause at an amount of 12 weeks’ salary + 2 weeks of salary for each full year of service, capped at 36 weeks of pay.
Probation Period
Probation Period
The probation period is only allowed for indefinite contracts and the period is dependent on the employee’s job role.
Immigration
Foreigners who wish to work in Puerto Rico must comply with Puerto Rico immigration requirements. According to U.S. visa law, citizens of approximately 40 countries worldwide must have an approved ESTA to visit the country for short stays.
The ESTA was introduced in 2009 for all nationalities included in the U.S. visa waiver program. It’s a travel authorization system that allows those who register multiple entries to Puerto Rico, mainland USA, and all incorporated territories of the United States, including the District of Columbia and the U.S. Virgin Islands during its validity.
For Work Permits
Employment authorization document (EAD)
from the U.S. Citizenship and Immigration Services (USCIS).
VAT
The standard rate of VAT in Puerto Rico is 11.50%.