Hiring in El Salvador

The contract sets out role, salary in USD, working time, place of work, leave and any confidentiality obligations. The EOR is the counterparty to the employee, which is what removes the need for your own entity.

Spanish is the standard contract language, and a copy must reach the Ministry of Labour within 8 days of signing.

Fixed-term contracts are only valid where the work itself is temporary, so most EORs default to indefinite terms.

Set probation from day one. The 30-day limit is statutory and cannot be extended, so plan any real assessment inside the first month.

Some EORs skip probation as policy, which means the minimum dismissal indemnity applies from the start. Ask before you agree a start date.

Night shifts are shorter and carry a 25% premium, and work on a public holiday also earns double pay.

Overtime may only be agreed occasionally, when unforeseen or special circumstances call for it, so it cannot be written into a role as a standing expectation. Put the position on senior roles in writing either way.

Quote the statutory 15 days plus the 30% premium when you budget, and add any extra days the role needs to compete. San Salvador adds local holidays in early August.

The employer pays the first three days of sick leave, after which the social security institute (ISSS) pays 75% of salary. Maternity leave is 16 weeks funded mainly through the ISSS and paternity leave is 3 days paid by the employer, so confirm which side the EOR carries.

Dismissal for one of the just causes listed in the Labour Code carries no indemnity. Dismissal without just cause costs 30 days' basic salary per year of service, with the daily rate capped at four times the minimum wage and a floor of 15 days' pay.

The EOR runs the process as the legal employer and will want the paperwork in order, including final pay, unused leave, the proportional Christmas bonus (aguinaldo) and any indemnity. Unfair dismissal claims go to the labour courts, so keep a documented reason.

Employees with two or more years' service who resign also receive a statutory payment of 15 days' salary per year, capped at twice the minimum wage.

Private medical cover and group life are common top-ups for professional roles even though they are not mandatory.

EORs often bundle benefits through a group scheme. Ask what is included in the fee and what is billed on top.

Employer contributions add up to 17.25% on top of gross salary, with the ISSS share capped at USD 75 a month. That is before the EOR fee.

The aguinaldo is the trap. It falls due between 12 and 20 December, so accrue it monthly rather than meeting a lump sum at year end.

Ask whether the EOR sponsors directly or refers to a partner. A partner-model EOR often cannot sponsor at all, and the headcount and payroll ratios apply to the sponsor, not to you.

Nationals of neighbouring Central American countries usually move faster. Set start dates after approval, not before.

Get the data processing terms in the service agreement, not just the privacy notice. Cross-border transfers need a lawful basis, and the regulator's policies require a named data protection officer.

Ask where payroll data is hosted and who in the partner chain can see it.

Incorporation is manageable, but the running cost is the point: at least two shareholders, a legal representative, an external auditor, accounting, tax and municipal registrations and payroll software set an annual floor.

Permanent establishment risk is about what people do, not where payroll sits. Revenue-generating activity can create exposure regardless of the employment route.