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Foreign companies generally cannot hire Cuban workers directly - Law 118 of 2014 requires you to contract staff through a state employing agency such as ACOREC.</p><p>That agency, not you, is the legal employer, and it pays workers in Cuban pesos while billing you a much higher fee.</p><p>This guide explains honestly what that system means for cost, control, and compliance before you commit to hiring in Cuba.
You generally cannot hire employees in Cuba the way you would elsewhere: the Foreign Investment Law (Law 118 of 2014) requires foreign entities to source Cuban staff through a state employing agency, which signs the employment contract and supplies the worker to you.
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Is Cuba Right For Your Hiring Plans?
Cuba has a population of around 10 million and one of the most educated workforces in Latin America, with near-universal literacy and deep strength in medicine, biotechnology, and engineering. Wages under the state salary system are very low by international standards - the minimum wage is 3,210 CUP per month from July 2026 - but that is not what a foreign employer actually pays.
The trade-offs are significant: hiring runs through state employment agencies rather than the open market, the agency fee you pay far exceeds the worker's peso wage, and US sanctions complicate banking and payments for many companies. Cuba rewards employers who understand the system before committing, not those who assume standard global hiring models apply.
What Are My Options For Hiring In Cuba?
Option 1: Use an Employer of Record (EOR)
Cuba is one of the few countries where a conventional Employer of Record model does not operate: Law 118 of 2014 makes the state employing agency the mandatory legal employer of Cuban staff working for foreign entities, so no private EOR can lawfully take that role on the island. In practice, agencies like ACOREC S.A. perform the employer-of-record function - they sign the employment contract, run payroll in Cuban pesos, and remit social security - while you direct the day-to-day work under a workforce supply contract. US sanctions add a further layer: companies with US ownership or banking ties need specialist legal advice before engaging anyone in Cuba.
Option 2: Set up a local entity
You cannot simply register a subsidiary in Cuba. Foreign investment takes one of the forms in Law 118 of 2014 - a joint venture with a Cuban partner, an international economic association agreement, or a wholly foreign-owned company - each requiring government authorization from the Ministry of Foreign Trade and Investment (MINCEX) or the Council of Ministers. Alternatively, a representation office registered with the Chamber of Commerce lets you maintain a commercial presence without trading locally. Approval is discretionary and slow, and even once established, your Cuban staff must still come through a state employing agency. Budget six months to a year or more.
Option 3: Hire independent contractors
Cuba's private sector has opened up since 2021: self-employed workers (trabajadores por cuenta propia) and private MIPYMEs are legal, registered with the tax authority ONAT, and responsible for their own taxes under Law 113 of 2012. Engaging a Cuban freelancer directly is therefore possible in principle, but paying them is the hard part - US sanctions block most mainstream payment platforms, and Cuban banking access is limited. If you plan on hiring contractors, confirm the payment route and sanctions exposure with counsel before work begins. A contractor management solution helps you stay compliant when engaging independent workers.
Understanding Labour Laws & Employment Contracts In Cuba
Employment Contracts
The Labor Code (Law 116 of 2013) requires employment contracts to be formalized in writing, in Spanish, with salaries paid in Cuban pesos at least monthly. Permitted types are indefinite-term and fixed-term (determinado) contracts. For foreign entities the critical point is that the employment contract sits between the worker and the state employing agency - you sign only a workforce supply contract with the agency. The compliance risk employers miss: assuming you can set contract terms directly with the worker, when the agency legally controls hiring, discipline, and dismissal.
Working Hours & Overtime
The standard workday is 8 hours over five days, extendable to 9 hours on some days provided the week does not exceed 44 hours (Article 87, Labor Code). Overtime requires prior agreement with the union and is capped - no more than 4 extra hours over two consecutive days and 160 extra hours per year. The risk employers miss: overtime must be paid at a 25% premium under Article 122, and the union sign-off step cannot be skipped.
Probation Periods
Probation in Cuba is short: up to 30 days as standard, extendable by a further 30 days for roles requiring mid-level or higher qualifications. Only in cases exceptionally authorized by the Ministry of Labor and Social Security can it reach 180 days. Either party can end the relationship during probation without the notice obligations that apply afterward, but for agency-supplied workers the return process runs through the employing agency, not you.
Onboarding Timeline
Onboarding in Cuba depends on the state employing agency: after you sign a workforce supply contract, the agency selects or approves candidates from its pool, signs the employment contract, and registers the worker for social security. This process commonly takes several weeks, and work permits for foreign nationals - issued by the Ministry of Labor and Social Security - add more time. For comparison, Playroll's standard onboarding timeline in supported countries is 1-5 working days; Cuba's agency-driven process is the outlier, so build in buffer time.
Current Payroll & Employer Tax Contributions In Cuba
Employers in Cuba pay two payroll taxes under Law 113 of 2012: the Social Security Contribution, which funds pensions, sickness, maternity, and work injury benefits, and the Labor Force Utilization Tax. Part of the social security contribution stays with the employer to pay short-term benefits like sick pay directly to workers. Both are calculated on total remuneration and remitted monthly to the National Tax Administration Office (ONAT).
For a foreign entity, the employing agency typically handles remittance for supplied workers, but you remain exposed if the agency relationship is structured wrong. Rates and rules shift with Cuba's ongoing fiscal reforms - Decree-Law 93 of 2024 already amended Law 113 - and ONAT penalties apply to late or incorrect payment. Anyone with US ownership must also clear OFAC sanctions rules before moving money.
Employer Contributions
| Contribution Type | Contribution % |
|---|---|
| Social Security Contribution (12.5% to State budget) | 12.5% |
| Social security retained for short-term benefits | 1.5% |
| Labor Force Utilization Tax | 5% |
| Total employer contributions | 19% |
13th Salary
There is no mandatory 13th month salary in Cuba - the Labor Code (Law 116 of 2013) does not require one. Foreign-invested entities may instead create an economic incentives fund from profits for Cuban workers, a mechanism expressly permitted by Law 118 of 2014, and hard-currency bonuses are a common way to attract talent.
See how Playroll runs payroll in CubaMinimum Wage & Average Salaries In Cuba
National Minimum Wage
As of 1 January 2021, the national minimum wage in Cuba is set at CUP 2,100.00 per month for a 44-hour workweek, which is approximately USD 87.50. This rate was established under the Gaceta Oficial No. 69 Extraordinaria de 10 de diciembre de 2020, reflecting a significant increase driven by the need to address inflation and rising living costs. The Ministerio de Trabajo y Seguridad Social is responsible for setting and enforcing these rates.
Average Salaries in Cuba
In early 2026, the average gross monthly salary in Cuba is estimated at around CUP 9,000–10,500 (roughly USD 375–440), which serves as a practical benchmark as you budget for your team. Actual pay varies significantly by experience, industry, and location, with higher salaries typically found in information technology, tourism and hospitality, and specialized medical or pharmaceutical services.Benchmark fair, market-rate salaries for your Cuba rolesLeave Entitlements & Employee Benefits In Cuba
Annual Leave in Detail
Workers earn one month (30 calendar days) of paid annual leave for every 11 months of effective work under Article 101 of the Labor Code (Law 116 of 2013). Leave accrues from day one at 9.09% of days worked and salary earned, and public holidays and paid maternity leave count as time worked for accrual. Any accrued, unused leave must be paid out when the employment relationship ends (Article 52); entitlement does not increase with seniority.
Common Employee Benefits
Paid annual leave - Statutory entitlement of 30 days.- Public holidays - Statutory entitlement of 9 days.
- Maternity leave - Statutory entitlement of 126 days.
- Employer benefits package - Benefits vary by sector and employer size.
- Employer benefits package - Benefits vary by sector and employer size.
Work Permits & Visas In Cuba
In Cuba, foreign nationals who wish to work legally typically need a combination of an appropriate entry visa (such as a D-1 or D-2 work-related visa) and authorization from the Cuban immigration and labor authorities, often referred to as a work authorization or permiso de trabajo linked to a specific employer or project. Most foreign workers are engaged through state entities, joint ventures, or approved foreign-investment projects, and the Cuban counterpart usually leads the sponsorship and application process.
Employers must secure approval from the Ministry of Labor and Social Security and the Dirección de Inmigración y Extranjería before a foreign employee can start work, while the individual must provide personal documentation, qualifications, and, in some cases, police and medical certificates. Rules and practice can change, so companies should always confirm current requirements with Cuban authorities or a qualified local advisor before proceeding.
Common Visa Types
| Visa Type | Description |
|---|---|
| Work Visa (Category 01) | Issued to foreign workers employed by Cuban companies for a period of one year, renewable upon approval. |
| Specialized Worker Visa | For foreign professionals or individuals with specific expertise required by the Cuban government or businesses. |
| Temporary Employment Visa | For foreign workers hired on short-term projects or assignments in Cuba, typically valid for up to 6 months. |
Termination & Severance In Cuba
Notice Periods
Cuba's Código de Trabajo (Ley No. 116 de 2013) and its Decreto No. 326 regulations govern, and notice mostly runs the other way. Under Art. 46, a worker resigning from an indefinite contract gives up to 30 working days, 15 on a fixed-term contract, and up to four months in a university-level technical post. You give 15 working days to end a fixed-term contract early (Art. 51). Probation runs 30 to 180 days. Art. 50 blocks termination notice during maternity leave, sick leave, annual leave or military service.
Severance Policies
Cuba has no severance in the Western sense. When a post disappears, the worker is declared disponible and draws a garantía salarial of one month at 100% of basic pay (Decreto 326, Art. 52). Anyone with 10 or more years of service then draws 60% of basic pay for one to five further months, depending on seniority, and the relationship ends there. A worker who turns down a reasonable redeployment gets one month at 60%. On any exit, Art. 52 of the Code guarantees outstanding wages and accrued annual leave.
Do I need to set up a legal entity to hire employees in Cuba?
In most cases you must hire through a state employing agency such as ACOREC S.A. - Law 118 of 2014 makes the agency the legal employer of Cuban staff working for foreign entities, and you sign a workforce supply contract with it. Setting up your own presence (joint venture, wholly foreign-owned company, or representation office) requires government authorization and still routes hiring through an agency. Engaging registered Cuban self-employed contractors directly is possible in principle, but sanctions and banking restrictions make payment the main obstacle. A conventional private Employer of Record cannot lawfully act as the employer inside Cuba.
How long does it take to hire and onboard an employee in Cuba?
Cuba's national minimum wage is 3,210 CUP per month, effective July 1, 2026 - a 53% increase over the previous 2,100 CUP floor set in 2021. The government has committed to reviewing it annually against inflation, and all state salary scale groups adjust upward with it. There are no regional variations, but note that the fee a foreign entity pays the employing agency is negotiated separately and sits far above the worker's peso wage.
How much does it cost to hire an employee in Cuba?
Your real cost is the state employing agency's fee, which is negotiated per role, typically payable in hard currency, and substantially higher than the worker's Cuban peso salary. On top of the wage bill sit employer contributions of 19% - a 14% social security contribution plus a 5% labor force utilization tax under Law 113 of 2012. Add 30 days of paid annual leave, any hard-currency incentives you offer, and legal costs for sanctions and structuring advice; entity setup under Law 118 of 2014 adds six months to a year of authorization work.
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