Payroll and Benefits Guide El Salvador
Last updated: Mar 03, 2026
Contribution
| Employer Payroll Contributions | |
|
7.50%
|
Social Security (ISSS), up to a maximum monthly cap of 1,000 USD. For employees who have salaries above 1,000 USD, the Employer’s Social Security contribution is 51.49 USD.
|
|
7.75%
|
Pension (AFP), up to a maximum of 6,523.20 USD
|
|
1.00%
|
INESAFORP, applicable to companies with more than ten employees, based on an employee monthly salary of less than 1,000 USD per month.
|
|
15.25% – 16.25%
|
Total Employment Cost
|
|
Employee Payroll Contributions
|
|
|
3.00%
|
Social Security (ISSS), up to a maximum monthly cap of 1,000 USD. For employees with salaries above 1,000 USD, the employee’s social security contribution will be 30 USD.
|
|
7.25%
|
Pension (AFP)
|
|
10.25%
|
Total Employee Cost
|
|
Employee Income Tax
|
Annual |
|
0%
|
Up to 6,600 USD
|
|
10% + $212.12
|
6,600 – 9,142.86 USD
|
|
20% + $720
|
9,142.86 – 22,857.14 USD
|
|
30% + $3,462.86
|
Over 22,857.12 USD
|
Employer taxes
Employee taxes
Minimum Wage
General
There is no single national minimum wage in El Salvador. The sector determines the minimum wage that the employee belongs to. National Minimum wages range from 243.46 USD for agriculture employees to 365.00 USD for industry and commerce service employees.
MINIMUM WAGE (PER MONTH)
Payroll
Payroll Cycle
The payroll cycle in El Salvador can be weekly, bi-weekly, or monthly, and payments must be made on the same day of the month and no later than one working day following the end of the pay cycle.
13th Salary
In El Salvador, there is a 13th-month salary payment to employees in December as a Christmas bonus.
The payment is made around the 20th December and the amount depends on the years of service. The employer pays 15 days of salary to employees with one to three years of service, 19 days of salary for three to ten years of service, and 21 days for more than ten years of service.
Working Hours
General
The standard working week in El Salvador consists of 44 hours a week, typically 8 hours per day typically over 5.5 or 6 days.
Overtime
-
Maximum Ordinary Hours (Constitutional/Labour Code): The legal standard work limit for the Day Shift (Jornada Diurna, 6:00 AM to 7:00 PM) is 8 hours per day and 44 hours per week.3 Any work beyond this is considered overtime (horas extraordinarias).
- Night Shift: The legal maximum for the Night Shift (7:00 PM to 6:00 AM) is 7 hours per day and 39 hours per week.
- Hazardous Work: For dangerous or unhealthy work, the daily limits are reduced to 7 hours (day shift) or 6 hours (night shift).4
- Daily Overtime Limit: Total working time, including overtime, is generally restricted by the requirement for a mandatory rest period between shifts, though the law refers to the total limit of 8 overtime hours that may be worked (Article 167).
- Consent: Employees have the right to refuse to work overtime unless their contract stipulates otherwise or in cases of national emergency or exceptional circumstances. Overtime must be compensated even if it was not explicitly authorized, provided the employer was or should have been aware of the work.
- Exemptions: Employees in certain managerial or high-level positions may be exempt, but unlike in other countries, this exemption is not universal and depends heavily on the specific nature and terms of their employment contract.
Mandatory Overtime Pay Rates (Labour Code Article 169)
El Salvador mandates a high minimum premium rate for standard overtime, with severe surcharges for night, rest day, and holiday work.9
| Day/Condition | Minimum Compensation Rate (Statutory) | Total Pay Rate | Notes |
| Daytime Overtime (6:00 AM to 7:00 PM) | +100% surcharge over the regular hourly rate. | 200% | All standard overtime is paid at double the basic hourly wage (Article 169). |
| Nighttime Overtime (7:00 PM to 6:00 AM) | +100% surcharge plus a 25% night premium on the basic hourly rate. | 225% | Overtime at night is paid at 200% plus the non-overtime night premium. |
| Weekly Rest Day Overtime | +300% surcharge over the regular hourly rate. | 400% | This high premium is for overtime worked on a weekly rest day (daytime hours). |
| Public Holiday Overtime | +300% surcharge over the regular hourly rate. | 400% | This high premium is for overtime worked on a statutory public holiday (daytime hours). |
Note on Sunday/Holiday Work:
- Compensatory Rest: Work on a designated rest day also generally entitles the employee to a compensatory rest day within the same or the following week.
- Extreme Premiums: If overtime is performed at night on a rest day or public holiday, the surcharge can reach up to 400% or 500% of the ordinary salary, depending on whether it is a rest day or a public holiday and the inclusion of night work and other surcharges (making the effective pay 5 times the ordinary rate).
Time & Attendance
In El Salvador, it is mandatory for employers to record working time for each employee.
Leave
Annual Leave (vacation)
Once an employee has been employed for at least one year (or worked more than 200 days in the year), they are entitled to 15 working days of paid annual leave.
Paid time off is paid at a rate of 130% of the employee’s regular salary rate of pay and paid to the employee before their leave.
The annual leave is calculated from 12 December to 12 December.
PTO carryover
Unused vacation days cannot be carried over into the following year and cannot be paid in cash instead of being taken, other than when employment ends and they must be paid out.
Public Holidays
There are 11 public holidays in El Salvador.
Public holidays that fall on a weekend are usually lost.
| Date | Day | Holiday | Notes |
|---|---|---|---|
| 1 January 2026 | Thursday | New Year’s Day | Standard holiday |
| 2 April 2026 | Thursday | Maundy Thursday | Standard holiday |
| 3 April 2026 | Friday | Good Friday | Standard holiday |
| 4 April 2026 | Saturday | Holy Saturday | Standard holiday |
| 1 May 2026 | Friday | Labour Day | Standard holiday |
| 6 August 2026 | Thursday | Feast of San Salvador | Standard holiday |
| 15 September 2026 | Tuesday | Independence Day | Standard holiday |
| 2 November 2026 | Monday | All Souls’ Day | Standard holiday |
| 25 December 2026 | Friday | Christmas Day | Standard holiday |
Sick Days
Employees in El Salvador are eligible for up to 26 weeks of paid sick leave. The employer covers the first three days and Social Security covers the remaining amount.
The amount of sick leave payment is determined by years of service:
- 1-5 months of employment entitles the employee to 75% of the basic salary for 20 days
- Five months to 1 year of employment service entitles the employee to 75% of the basic pay for 40 days
- One year or more of employment entitles the employee to 75% of the basic pay for 60 days
Employees with disabilities might be entitled to coverage by Social Security for up to 1 year.
Maternity Leave
In El Salvador, female employees are entitled to receive up to 16 weeks of paid maternity leave, calculated at the rate of 75% of their regular wages paid out by Social Security. Employees must take at least six weeks of leave before the expected due date and up to 10 weeks after the child is born. The employee can request to extend the maternity leave if there are any pregnancy-related illnesses/complications.
For the health and safety of the employee, she cannot be assigned any physical work after the fourth month of pregnancy.
The employee must provide a medical certificate confirming the pregnancy status and expected due date.
Private sector companies with 100 or more employees must provide daycare services for the children of their employees.
Paternity Leave
In El Salvador, male employees are entitled to 3 working days of paternity leave which the employee must take within the first 15 days of the child’s birth. The leave is paid at 100% of the employee’s regular salary.
Parental Leave
In El Salvador, there is no additional provision for Parental Leave.
Other Leave
Bereavement Leave – employees who have suffered the loss of an immediate family member are entitled to 2 days of paid mourning leave.
PAID MATERNITY LEAVE (DAYS)
Termination
Termination Process
The termination process varies according to how it is stipulated within the employment agreement/collective agreement and is based on the type of contract, length of service, and reason for termination.
| Salary payment interval / date | Final payment on termination | Bank account payment requirement |
|---|---|---|
| Monthly pay is standard for salaried employees; pay cycles vary depending on contract/sector. | On termination without just cause, employer must pay severance (indemnización) equivalent to 30 days’ salary for each year of service (minimum 15 days) under the Labour Code. | Not available |
Notice Period
In El Salvador, there is no formal notice period within the first 2 years of service, unless stipulated in the employee’s employment contract/Collective Agreement. However, it is common practice to provide a minimum of 7 days’ notice once a worker has completed their probation.
Severance Pay
Severance pay in El Salvador is subject to specific regulations and will vary depending on the reasons that led to the termination of the employment. For instance, severance is not provided in case of resignation by the employee or when the employment contract’s duration term has elapsed.
If severance is required, it is generally calculated as 30 days salary for each year of service, capped at four times the legal minimum daily wage.
Probation Period
Generally, the probation period can be up to a maximum of 30 days.
Immigration
All foreign nationals seeking to work in El Salvador must obtain a work permit and a temporary residence permit in the country. The work permit and temporary residence permit are valid for an initial period of one or two years and can be extended for up to five years.
Nationals of Central American countries can apply directly for permanent residence. Nationals of Spain or Latin American Spanish-speaking countries can apply for permanent residency after one year of holding a temporary residence permit. All other foreign nationals can apply for permanent residence after three consecutive renewals of their temporary residence permit.
VAT
General
The standard rate of VAT in El Salvador is 13%.
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Payroll and Benefits Guide
in El Salvador
What’s covered in this guide:
- Employer/employee contributions
- Minimum wage
- Working hours
- Visa requirements
And more...
Public Holidays Calendar
| Date | Day | Holiday | Notes |
|---|---|---|---|
| 1 January 2026 | Thursday | New Year’s Day | Standard holiday |
| 2 April 2026 | Thursday | Maundy Thursday | Standard holiday |
| 3 April 2026 | Friday | Good Friday | Standard holiday |
| 4 April 2026 | Saturday | Holy Saturday | Standard holiday |
| 1 May 2026 | Friday | Labour Day | Standard holiday |
| 6 August 2026 | Thursday | Feast of San Salvador | Standard holiday |
| 15 September 2026 | Tuesday | Independence Day | Standard holiday |
| 2 November 2026 | Monday | All Souls’ Day | Standard holiday |
| 25 December 2026 | Friday | Christmas Day | Standard holiday |
Ive worked for the same company for 4 years and was recently terminated. What will be my severance pay?
Severance pay is generally calculated as 30 days’ salary per year of employment. If you are eligible, you can receive up to 120 days of pay.
Do individual consultants pay the same about our taxes ? Or only vat
We can’t provide tax specifics for consultants, we recommend contacting a local tax expert to advise on this specific set up.