Guide · El Salvador
El Salvador EOR Cost: What a Hire Costs Each Month
Guide · Updated 26 October 2026
An employee hired through an employer of record in El Salvador costs you three things each month: the gross salary, the employer’s statutory contributions and accruals, and the EOR service fee. Contributions plus the aguinaldo and the vacation premium add roughly 17% to 23% to salary, depending on the salary level. From 2027, Quincena 25 adds about 4% more for employees earning up to US$1,500 a month.
Last reviewed in October 2026 against the Labour Code, the ISSS and pension rules, the 2025 income tax withholding tables and the 2026 Quincena 25 and aguinaldo reforms. General information, not legal or tax advice.
The three parts of an El Salvador EOR bill
Salary. The gross monthly salary you agree with the employee, in US dollars, which is El Salvador’s currency. Payroll runs on a fixed monthly salary; if you have an hourly rate in mind, it is converted to a monthly amount before the offer.
Statutory employer costs. Social security and pension contributions, the training levy, and accruals for the payments the Labour Code adds each year. These are passed through at cost.
The EOR service fee. The provider’s charge for employing and paying the person, shown as its own line, plus any one-time item and a refundable deposit.
Employer contributions in 2026
Three contributions are paid every month on top of salary. The health contribution has a ceiling; the pension contribution does not.
| Contribution | Employer rate | Employee rate | Notes |
|---|---|---|---|
| ISSS (health, maternity and sickness) | 7.5% | 3% | On salary up to US$1,000 a month: at most US$75 for the employer and US$30 for the employee |
| AFP (pension) | 8.75% | 7.25% | On the full salary, no ceiling |
| INSAFORP (vocational training) | 1% | — | Paid by employers with 10 or more workers |
| Income tax | — | Per table | Withheld from pay monthly; no tax on the first US$550 of monthly income after ISSS and AFP |
Sources: Social Security Law and ISSS regulations; Integral Pension System Law (2022); INSAFORP Law; Ministry of Finance income tax withholding tables (2025).
Three details that change the number
The ISSS ceiling. Above US$1,000 a month the ISSS cost stays at US$75, so the percentage on top of salary falls as salary rises.
Length of service. The aguinaldo rises from 15 to 19 days’ salary after three years and to 21 days after ten.
The US$1,500 line. Quincena 25 applies only to employees earning up to US$1,500 a month, so a small raise across that line changes the January cost.
The aguinaldo, the vacation premium and Quincena 25
Aguinaldo. Every employee receives a year-end bonus of 15 days’ salary with one to three years of service, 19 days with three to ten years and 21 days with ten years or more, pro rata in the first year. Since a 2026 reform it can be paid from 1 October, and it must be paid by 20 December.
Vacation premium. After each year of service the employee takes 15 days of paid vacation, with a premium of 30% on top of the normal pay for those days.
Quincena 25. Under Legislative Decree No. 499 of 2026, employees earning up to US$1,500 a month receive half a month’s salary between 15 and 25 January. Private employers could pay it voluntarily in 2026, with a tax credit; it is mandatory from January 2027. It is not subject to income tax, ISSS or AFP deductions.
In a monthly budget, these three payments are spread across the year as accruals, so the cost of December and January does not come as a surprise.
Other costs to plan for
- Remote work. Under the Teleworking Law the employer provides or pays for the equipment, software and internet a teleworker needs.
- Overtime and night work. Overtime is paid at double the hourly rate; night hours carry a 25% premium.
- Benefits you choose to add. Private health insurance, life insurance or a meal allowance are common in competitive roles, but not required by law.
- Salary reviews. Minimum wages are set by decree; the current rates have applied since 1 June 2025.
How to read an EOR quote for El Salvador
Ask to see every statutory item as a separate line, at cost, and the service fee as its own line. A good quote also shows how the aguinaldo, the vacation premium and Quincena 25 are funded, whether the deposit is refundable and when, and the dates on which you will be invoiced each month.
NNRoad does not publish a standard price for El Salvador. We review the role, the salary and the work location first, then send a written proposal that shows:
- the full employment cost, line by line, in US dollars
- NNRoad’s service fee and any one-time item, listed separately
- the refundable deposit and when it is returned
- the working calendar for invoices and paydays
Three worked examples
The examples assume one to three years of service (an aguinaldo of 15 days), INSAFORP at 1% and no optional benefits. Quincena 25 is shown at its 2027 level. Figures are monthly averages over a year, before the EOR service fee.
| Role | Gross salary | Employer contributions | Aguinaldo and vacation premium | Quincena 25 (from 2027) | Average monthly cost | Above salary |
|---|---|---|---|---|---|---|
| Customer support specialist, San Salvador | US$800 | US$138.00 | US$43.33 | US$33.33 | US$1,014.67 | 26.8% |
| Software developer, remote | US$2,500 | US$318.75 | US$135.42 | Not applicable | US$2,954.17 | 18.2% |
| Country manager, San Salvador | US$5,000 | US$562.50 | US$270.83 | Not applicable | US$5,833.33 | 16.7% |
Employer contributions are ISSS (7.5%, capped at US$75), AFP (8.75%) and INSAFORP (1%). For the US$800 salary, the 2026 cost without Quincena 25 is US$981.33 a month (22.7% above salary). To test your own figures, use the El Salvador labor cost calculator.
The yearly view: when the money is paid
| When | What is paid |
|---|---|
| Every month | Salary on the paydays in the contract; ISSS, AFP and income tax for the month filed and paid in the following month |
| When vacation is taken | Vacation pay plus the 30% premium |
| 1 October to 20 December | The aguinaldo |
| 15 to 25 January | Quincena 25, for employees earning up to US$1,500 (mandatory from 2027) |
| January | Annual tax withholding statements for each employee |
What it costs to end an employment
There is no statutory notice period for a dismissal. If an indefinite-term employee is dismissed without just cause, the employer pays severance of 30 days’ basic salary for each year of service, pro rata for part years and at least 15 days’ salary. The salary used is capped at four times the minimum wage, which is US$1,635.20 a month at the commerce and services rate.
Employees who resign after at least two years of service receive 15 days’ salary per year, on a salary capped at twice the minimum wage. Whoever ends the employment, pro rata vacation and aguinaldo are always paid in the final settlement.
Example: a developer earning US$2,500 is dismissed without just cause after three years. Severance is calculated on the capped salary of US$1,635.20, so it is about US$4,905.60, plus pro rata vacation and aguinaldo.
EOR or your own Salvadoran company?
A Salvadoran company, usually a sociedad anónima de capital variable (S.A. de C.V.), must be registered with the Commercial Registry and the Ministry of Finance, and as an employer with the Ministry of Labour, the ISSS and an AFP before its first hire. It then needs local accounting, tax filings and payroll every month. That fixed cost makes sense for a larger, long-term team or when you will invoice Salvadoran customers.
For one to a few employees, or while you test the market, an employer of record is usually cheaper and faster, because the employer registrations already exist. You can move employees to your own company later. Compare the ways to operate without an entity.
Questions about El Salvador EOR cost
How much does an employer of record cost in El Salvador?
You pay the employment cost at cost plus the EOR service fee. Employer contributions and accruals add roughly 17% to 23% to salary, more from 2027 for salaries up to US$1,500. NNRoad quotes each hire after reviewing the role, with every line shown.
Is social security capped in El Salvador?
The ISSS health contribution is capped: it applies to salary up to US$1,000 a month, so the employer pays at most US$75 and the employee US$30. The AFP pension contribution has no ceiling.
Is the aguinaldo included in the monthly cost?
In a budget it should be. We show it as a monthly accrual so that the payment between 1 October and 20 December is already funded.
Do I pay Quincena 25 for every employee?
No. From 2027 it applies to employees earning up to US$1,500 a month. It equals half a month’s salary and is paid between 15 and 25 January.
Can I pay an hourly rate in El Salvador?
Our El Salvador payroll runs on a fixed monthly gross salary. If you have an hourly rate in mind, we convert it to a monthly salary based on the agreed schedule before the offer is made.
Want the numbers for your own hire?
Send us the role, the salary and the work location and we will reply with a line-by-line estimate in US dollars.
Related
How NNRoad employs and pays your Salvadoran hire.
Model employer cost and net pay for any salary.
Official sources: Labour Code (Código de Trabajo), Ministry of Labour and Social Welfare (MTPS), Salvadoran Social Security Institute (ISSS), Ministry of Finance income tax withholding tables (2025), 2025 minimum wage decree, Teleworking Law guide (MTPS). Also: Integral Pension System Law (2022); Legislative Decree No. 499 of 2026 (Quincena 25 Law); Legislative Decree No. 669 of 2026 (aguinaldo payment window). Reviewed October 2026; general information, not legal or tax advice.