Talent Wiki – El Salvador

Your quick guide on talent and labor compliance norms in El Salvador

Capital

San Salvador

Currency

United States Dollar (USD)

Languages

Spanish

Payroll Frequency

Weekly, Bi-Weekly, or Monthly

GDP per Capita

$5,490.00

Employer Tax

15.25%-16.25%

Talent Overview

El Salvador is located in Central America. The economy of this country mainly relies on energy, manufacturing, telecommunications, services, and agriculture. The economic growth of El Salvador over the last five years has been booming. It was affected in 2020 by the Covid-19 pandemic but has rebounded in 2021 positively.

Major economic hubs:

San Salvador, Soyapango, Santa Ana

Skills in demand:

Technicians, Engineering, Management, Accounting, Logistics

Local Universities

The top local universities in El Salvador are as follows:

Universidad de El Salvador

Ranking

Local: 1

World: 2,156

Universidad Centroamericana José Simeón Cañas

Ranking

Local: 2

World: 1972

Universidad Tecnológica de El Salvador

Ranking

Local: 3

World: 4560

Universidad Don Bosco

Ranking

Local: 4

World: 5222

Universidad Francisco Gavidia

Ranking

Local: 5

World: 5593

Salary Data

Some of the popular jobs and their annual salaries are listed below:

Job Title Average Monthly Salary (in USD)
Accountant 1,170
Graphic Designer 1,010
Business Analyst 2,000
Software Engineer 1,590
Sales Manager 2,760

Talent Sourcing Tips

Top Local Job Boards

Teloco, BuscoJobs

Number of LinkedIn users

793,000

Top Recruitment Agencies

Integral Workers, Outsourcing El Salvador

Employing in El Salvador

Below are the key points an employer must keep in mind while seeking employees in El Salvador.

Employee Contract

Employment contracts in El Salvador must be drafted in the local language. Contracts can be written or oral; however, having a written agreement is recommended. The currency of the compensation must be USD.

Probation Period

The probationary period for employees in El Salvador can be a maximum of 30 days.

Public and Provincial Holidays

Date Name Type
1 Jan New Year’s Day National holiday
28 Mar Maundy Thursday National holiday, Christian
29 Mar Good Friday National holiday, Christian
30 Mar Holy Saturday National holiday, Christian
1 May Labor Day / May Day National holiday
3 May Cross Day Observance
10 May Mothers’ Day National holiday
17 Jun Fathers’ Day National holiday
22 Jun Teachers’ Day Optional holiday
3 Aug San Salvador Day 1 (S. Salvador only) Local holiday
5 Aug San Salvador Day 2 (S. Salvador only) Local holiday
6 Aug Celebrations of San Salvador National holiday
15 Sep Independence Day National holiday
2 Nov All Saints Day National holiday
25 Dec Christmas Day National holiday, Christian

Employee Leaves

Type of Leave Duration Mandatory
Annual Leave 15 days Yes
Sick Leave 20 days Yes
Maternity Leave 16 weeks Yes

Payroll

Payroll Cycle

Employees in El Salvador can be paid weekly, bi-weekly, or monthly.

Minimum Wage

Minimum wages in El Salvador range from 243.46 USD to 365 USD based on the industry.

Overtime Pay

Employees in El Salvador usually work 44 hours a week. Work beyond this is considered overtime and is paid at 200% of the regular pay.

Bonus

13th Month Pay

The 13th month’s pay in El Salvador is mandatory and is paid at Christmas. The amount for this depends on the number of years an employee has worked at an organization.

Employee Benefits

  • Maternity Leave
  • Social Security
  • 13th Month pay
  • Pension Fund
  • Paternity Leave

Taxes

Employer Payroll Tax

Monthly Income (USD) Type of Tax Rate
1 – 1,000 Social Security 7.5%
Above 1,000 Flat amount – $51.49
1 – 6,523.20 APF (Pension Fund) 7.75%
1 – 1,000 INESAFORP (for companies with more than 10 employees, based on employees with monthly salary less than 1,000 USD) 1%

Employee Payroll Tax

Monthly Income (USD) Type of Tax Rate
1 – 1,000 Social Security 3%
Above 1,000 Flat amount – $30
1 – 6,523.20 APF (Pension Fund) 7.25%

Employee Income Tax

Income (USD) Rate
1 – 4,064 0%
4,064 – 9,142.86 $212.12 + 10% on excess over $4,604
9,142.86 – 22,857.14 $720 + 20% on excess over $9,142.86
Above 22,857.12 $3,462.86 + 30% on excess over $22,857.14

VAT

VAT in El Salvador is charged at 13%.

Offboarding & Termination

Employment in El Salvador can be terminated both by the employee and the employer. The employer can terminate the employment only on substantial grounds. If the employer terminates the employment without substantial grounds, they must pay severance to the employee.

In El Salvador, employees on probation must serve a notice period of a minimum of 7 days upon termination of the employment contract. Permanent employees must serve a notice of 7 – 15 days upon termination of the contract.

Severance pay in El Salvador is usually calculated as 30 days’ salary for every year of service.

Visa and Immigration

A visa is mandatorily required for foreign nationals seeking jobs in El Salvador. An individual must obtain a work permit and a temporary residence permit. These permits are valid for 1 – 2 years and may be extended to up to five years. Individuals from other Central American countries may directly apply for permanent residence. 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.

Streamline payroll and compliance for your international workforce

Payroll

Minimum Wage

Overtime Pay

Visa & Immigration