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August 28, 2023
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3 mins
Situated in Central America, El Salvador's economy thrives on energy, manufacturing, telecommunications, services, and agriculture. Despite facing challenges due to the Covid-19 pandemic in 2020, the country has experienced significant economic growth in the last five years, with a positive rebound observed in 2021.
In El Salvador, employment contracts must be in the local language and can either be written or oral, though having a written agreement is advised. The compensation currency must be in USD.
In El Salvador, the probationary period for employees cannot exceed 30 days.
Annual Leave -15 days
Sick Leave -20 days
Maternity Leave -16 weeks
In El Salvador, employees have the option to be paid weekly, bi-weekly, or monthly.
In El Salvador, minimum wages vary based on the industry, ranging from 243.46 USD to 365 USD.
In El Salvador, employees typically work 44 hours per week, with any additional hours considered overtime and paid at 200% of the regular pay rate.
In El Salvador, the 13th month's pay is obligatory and is disbursed during Christmas. The amount varies based on the number of years an employee has been with the organization.
El Salvador imposes a 13% VAT (Value Added Tax).
In El Salvador, both employees and employers have the right to terminate employment. Employers can only do so with valid reasons, and if they terminate without substantial grounds, they are required to provide severance pay to the employee.
In El Salvador, employees on probation must provide a minimum of 7 days' notice upon termination of the employment contract. For permanent employees, the notice period is 7–15 days upon termination of the contract.
In El Salvador, severance pay is typically calculated as 30 days' salary for each year of service.
Foreign nationals intending to work in El Salvador must possess a mandatory visa. The process involves obtaining both a work permit and a temporary residence permit, with the permits typically valid for 1 to 2 years, and the possibility of extension for up to five years. In contrast, individuals from other Central American countries have the option to directly apply for permanent residence in El Salvador.
Individuals from Spain, Latin America, or other Spanish-speaking countries may apply for permanent residency after one year. Other foreign nationals can apply for permanent residency after three consecutive renewals of their temporary permit.
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If you're considering hiring employees or contractors in El Salvador or seeking compliant payroll solutions, contact us or book a demo at http://niural.com. For further insights, follow us on Twitter @niuralhq. Make informed decisions and ensure a successful hiring process in El Salvador!
