Hiring in Guatemala

The terms set out role, salary in GTQ, working time, leave, notice and confidentiality. The EOR is the counterparty to the employee, which is what removes the need for your own entity.

Contracts are written in Spanish. Bilingual versions are common, with the Spanish text governing, and a copy must be filed with the Ministry of Labour within 15 days of signing.

Fixed-term contracts are permitted only where the work is temporary by nature. Otherwise the law treats them as indefinite, so most EORs default to indefinite terms.

Set probation from day one. It cannot be extended beyond 2 months, although the parties can agree a shorter period. Earned pay and proportional bonuses are still due if it ends early.

Some EORs shorten probation as policy because they, not you, carry the dismissal risk. Ask before you agree a start date.

Overtime is paid at 1.5 times the ordinary hourly rate, and ordinary plus overtime hours are capped at 12 a day. Night and mixed shifts carry shorter limits.

Management and trust roles sit outside the standard hours limits, so overtime becomes a contractual matter for them rather than a statutory one. Put the position in writing either way.

The public holiday count includes two December half days and a local holiday that varies by municipality. Annual leave cannot be paid out while employment continues, only on exit, so plan for it to be taken.

Sick pay falls mainly to the IGSS from the fourth day of illness. Maternity leave runs 84 days and is paid by the IGSS where the employee has enough contributions, otherwise by the employer, so confirm which side the EOR carries.

Employees who resign give one week to one month of notice by tenure. Severance is calculated on average pay including the aguinaldo and Bono 14, so it runs higher than base salary suggests. Pregnant and breastfeeding employees can only be dismissed with court approval.

The EOR runs the process as the legal employer and will want the paperwork in order, including final pay, unused leave and proportional bonuses. If a dismissal for cause is challenged and the cause is not proven, damages of up to 12 months' pay can be added, so keep a documented reason.

Private medical cover and group life are common 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 12.67% on top of gross salary: 10.67% to the IGSS and 1% each to IRTRA and INTECAP. That is before the EOR fee.

Budgeting for 12 salaries is the trap. The aguinaldo, paid half in December and half in January, and Bono 14, paid in July, each add a month's pay. Every employee also receives a Q250 monthly incentive bonus outside the IGSS and tax base.

Ask whether the EOR sponsors directly or refers to a partner. A partner-model EOR often cannot sponsor at all, and the rule that 90% of staff and 85% of payroll go to Guatemalans applies to the sponsor, not to you.

Set start dates after approval, not before.

Get the data processing terms in the service agreement, not just the privacy notice. With no statutory transfer rules, set the standard you need in writing, and watch for the data protection bill that has sat in Congress since 2022.

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

Incorporation here is paperwork-heavy: a notarised deed, the Mercantile Registry, then registration with the SAT, IGSS, IRTRA and INTECAP. The running cost adds to that, as a legal representative, a local accountant, monthly tax filings and authorised accounting books 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.