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:
Local: 1
World: 2,156
Local: 2
World: 1972
Local: 3
World: 4560
Local: 4
World: 5222
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
793,000
Below are the key points an employer must keep in mind while seeking employees in El Salvador.
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.
The probationary period for employees in El Salvador can be a maximum of 30 days.
| 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 |
| 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
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.
Taxes
| 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% |
| 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% |
| 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 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.
