Guatemala PEO & EOR
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DID YOU KNOW
- The original name of Guatemala was Quauhtlemallan, which means ‘place of many trees’ in Nahuatl (a language in Mexico)
- Guatemala is home to 37 volcanoes, 3 of which are still active. Volcán Tajumulco is the country’s highest standing at 4,220 meters, making it the tallest volcano in Central America.
- It is widely believed that the ancient Maya invented the first ever chocolate bar.
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Guatemala PEO Services
Central America’s largest economy
Working in Guatemala
Financial Year Dates
1st January – 31st December
Minimum Wage
Minimum Wage: 3,384.59 GTQ + Bonus 250 GTQ
Standard working hours
The workday in Guatemala is 8 hours per day and 48 hours per week; the employee and the employer can agree on the schedule from Monday to Friday or from Monday to Saturday. Overtime is any hour quantity over the hours per week previously mentioned. The overtime hour value is calculated as monthly salary divided by 235, and the % factor.
Work shifts:
- Daytime Shift: From 06:00 to 18:00 for 8 hours / 48 hours per week.
- Nocturnal Shift: From 18:00 to 6:00 maximum 6 hours daily / 36 hours per week.
- Split Shift: 4 or more hours in Nocturnal Shift, maximum 7 hours daily / 42 hours per week.
Overtime
Overtime is paid at 150% of an employee’s usual hourly rate.
If employees working on the Day Shift works after 6:00 p.m., the hours they work must be paid with the Night Surcharge of an additional 50%.
Holiday Allowance
Annual leave is 15 working days per year after one year of service has been completed. Employees receive a higher pay rate during their time off, paid at 130% of their normal salary.
Sick Leave
There are different kinds of sick leave and the payment changes in every case.
- General sick leave: The employee may be incapacitated for an indefinite period; however, the disability subsidy is only paid for 39 weeks.
- Labor sick leave: The employer must pay the employee 66.7% of their daily earnings, starting one day after the accident until their recovery.
Maternity & Paternity Leave
- Maternity Leave: There are 84 days of maternity leave, distributed as 30 prenatal days and 54 postnatal days. In the last 6 months, the employee had to pay IGSS for at least 3 months.
- Paternity Leave: two days in charge of the employer.
Public Holiday
- New Years Day
- Maundy Thursday
- Good Friday
- Easter Saturday
- Easter Sunday
- Easter Monday
- Labor Day
- Mothers’ Day (working mothers only)
- Army Day
- Independence Day
- Dia de la raza
- Revolutions of 1944
- All Saints’ Day
- Christmas Eve
- Christmas Day
- New Years Eve
Probation period and contract termination
3 months’ probation period
Employees wishing to terminate their contract must provide the following notice:
Length of service | Notice period |
6 weeks or less | 1 week |
6months – 1 year | 10 days |
1 – 5 years | 2 weeks |
5 years or more | 1 month |
If the employer decides to terminate the employment contract without cause, it has to pay the employee compensation by termination.
Fix term: Until the end date in the employment contract.
Indefinite term: One month’s salary for each year worked.
Social Contributions
The Guatemala Institute of Social Security is a national social security program offering retirement benefits, and financial protection for any interrupted income due to maternity, accident or illness.
Employees contribute 4.83% of their monthly salary and employers contribute 12.67% of their monthly payroll to social security.
Income Tax
The employer has to do a withholding tax monthly to the employee’s income overall payment concept; the tax is calculated according to the next table:
TAXABLE INCOME RANGE | TAX | |
Q1.00 | Q25,000.00 | 5% |
Q25,000.01 | Q1,000,000.00 | 7% |
Health Care
The Guatemalan heath care system consists of three separate divisions:
- Public
- Private non-profit
- Private for-profit
The public healthcare sector is said to cover approximately 88% of the country’s population. With very little government spending, Guatemala’s heath care system lacks basic medicine and equipment.
Non-citizens cannot access the national health system and are advised to take out private medical insurance.
Visas
The government in Guatemala offers’ foreign nationals two different types of work permits.
- Expatriates who have spouses or children with Guatemalan citizenship
- Foreign nationals who have received a job offer from a Guatemalan company.
The difference between the two is the way in which the application is applied. The first visa the applicant can apply for on their own. Whereas foreign workers with no family in Guatemala should expect the company to file for the work permit.
“A Guatemala EOR provider can also provide guidance on this process. An EOR can provide a payroll solution in Guatemala so that workers can easily set up in Guatemala and businesses can easily place workers in-country.”
13th salary
13th month (Aguinaldo): One month’s salary per year payable in November.
14th month (Bono 14): One month’s salary per year payable in June.
Cultural Information
- 15th September celebrates Guatemala’s independence from Spain. Across the country there are celebrations with fireworks, parades, football matches, dances and cockfights. At these festivals, Indigenous crafts are sold, including the Embroidered huipils (smocks) worn by Mayan women.
- Guatemala is the leader in blue denim production. Many brand-name blue jeans sold in the U.S are produced in Guatemala.
- Many old American school buses near 10 years old or 150,000 miles find themselves in Guatemala. They are revived by locals with colorful paint, then used as local transport. Opting for this budget-friendly travel alternative gives you an eclectic local experience.