An employer of record in Guatemala employs your hire through a Guatemalan entity under the Labour Code, runs payroll in quetzales, remits IGSS social security contributions, and administers a pay calendar built around 14 salary payments a year: twelve monthly salaries plus the Bono 14 in July and the Aguinaldo in December. The buyer directs the work; the EOR carries the legal employer obligations, including a severance regime that accrues roughly a month of salary per year of service. The figures below come from published payroll and employment-law guides for Guatemala and describe the statutory frame; contracts and current law control, and nothing here is legal advice.
What an EOR does in Guatemala
A compliant Guatemalan EOR issues an employment contract under the Labour Code, registers the employment with IGSS, and operates the monthly cycle: paying salary, withholding the employee's IGSS contribution of 4.83% of salary, and paying the employer contributions that total 12.67%, made up of 10.67% to IGSS plus 1% each to IRTRA and INTECAP. It also administers the two statutory bonuses, each equal to a month's ordinary salary: the Bono 14 paid in the first half of July and the Aguinaldo paid in December. For a buyer without a Guatemalan entity, the EOR replaces local incorporation and payroll registration, and its fee should be weighed against exactly that overhead for the headcount you plan.
The 14-salary year and other entitlements
Budgeting Guatemalan employment as twelve salaries understates cost by two months of pay: the Bono 14 and the Aguinaldo are mandatory, not discretionary, so annual base cost is effectively 14 salaries before contributions. Paid vacation is at least 15 working days after a year of continuous service. Maternity leave runs 84 consecutive days, and the working-time rules cap the ordinary daytime week while night and mixed shifts carry lower weekly maxima. An EOR quote should show the bonuses accrued monthly rather than appearing as surprise invoices in July and December, and a provider that quotes salary plus fee without the two bonuses visible is presenting a number about 17% below the real annual base cost.
Severance is the liability to understand before hiring
Termination without just cause in Guatemala carries an indemnity of one month of salary for each year of service, plus unused vacation and the prorated portions of both bonuses. Notice requirements scale with tenure, from about a week for the shortest service up to a month after five years. This accruing severance liability is a defining feature of Central American employment law, and it belongs in the hiring decision: a role you may need to unwind in two years carries roughly two months of salary in exit cost before notice and prorated bonuses. Ask any EOR how it handles this liability, whether it accrues it on the invoice monthly or bills it at termination, because both models exist and the difference lands on your cash flow at the worst moment.
What to check in a Guatemalan EOR provider
Confirm the provider employs through a Guatemalan entity registered with IGSS and can show the registration, since contribution remittance is the core compliance duty. Ask for the cost build-up in writing: gross salary, the employer's 12.67% in contributions, the two bonuses accrued monthly, and the fee as separate lines. Ask how the provider calculates and funds severance exposure, and how it documents just cause if a dismissal is ever contested. Check that the employment contract states the correct working-time regime for the role, since day, night and mixed shifts carry different weekly hour caps. Finally, verify the current sector minimum wage for the role's classification, because Guatemala sets different rates by activity and revises them periodically.
Questions people ask about employer of record guatemala
What are the Bono 14 and the Aguinaldo?
Two mandatory annual bonuses, each equal to one month of ordinary salary: the Bono 14 is paid in the first half of July and the Aguinaldo in December. Together with twelve monthly salaries they make Guatemala a 14-salary jurisdiction, and both accrue pro rata for partial years.
What does an employer pay to IGSS in Guatemala?
Employer contributions total 12.67% of salary: 10.67% to the IGSS social security institute plus 1% each to IRTRA and INTECAP. The employee contributes 4.83%, withheld from pay. The bonuses are exempt from these contributions under current rules.
What severance applies if employment ends?
Dismissal without just cause carries an indemnity of one month of salary per year of service, plus unused vacation and prorated bonuses. This accrues with tenure, so exit cost grows every year and belongs in the hiring budget from day one.
How much vacation do Guatemalan employees get?
At least 15 working days of paid vacation after one year of continuous service, alongside 84 days of maternity leave and shorter paid leaves for specific family events set by the Labour Code.