Employer of Record in Honduras

Businesses can only operate smoothly in Honduras if they comply with local labor laws including drafting compliant employment contract agreements and meeting taxation and payroll obligations. Learn more about the employment laws and regulations in Honduras below, to avoid any compliance issues.

Employment Contract Requirements

In Honduras, contracts must be in Spanish, but can also be bilingual. They should be written and signed by both the employer and employee, outlining specific details such as:

• Company and employee names
• Start date
• Duration of employment
• Job description
• Termination conditions

Onboarding Process

We can help you get a new employee started in Honduras quickly, with a minimum onboarding time of just 1-2 working days. The timeline starts once the employee submits all required information onto the Playroll platform and completes any necessary local authority registrations. For non-nationals, the Right to Work assessment (if applicable) may add up to three extra days. Additional time may be needed for follow-ups on this assessment. Please note, payroll cut-off dates can impact the actual start date. Playroll's payroll cut-off date is the 10th of each month unless otherwise specified.

Working Hours in Honduras

The standard workday is 8 hours from Monday to Friday, and 4 hours on Saturday, totaling 44 hours per week.

Overtime in Honduras

Overtime pay is obligatory and distinct from the regular salary. Any work conducted beyond standard hours or exceeding agreed-upon limits qualifies as overtime, with compensation comprising a 25% surcharge on daytime wages, a 50% surcharge on nighttime wages, a 75% surcharge on night shift wages, and 100% of the hourly rate for overtime on weekends and public holidays.

Probation Period in Honduras

The probationary period, limited to 60 days, assesses the employee's abilities for the employer and the job's suitability for the employee. It's a paid period, and if neither party indicates a desire to terminate the contract, it extends indefinitely.

Fiscal Year in Honduras

1 January - 31 December is the 12-month accounting period that businesses in Honduras use for financial and tax reporting purposes.

Payroll Cycle in Honduras

The payroll cycle in Honduras is usually monthly, with employees being paid as specified in the contract.

Minimum Wage in Honduras

The minimum wage for employees in Honduras is typically 48.7 HNL per hour, amounting to ~¯7,802.20 HNL per month for a typical 40 hour work week.

Bonus Payments in Honduras

Full-time employees are entitled to receive a 13th-month salary payment as a Christmas bonus in December and a 14th-month salary payment in July, with each payment amounting to one month's salary.

Employer Tax Contributions

Employer payroll contributions are generally estimated at an additional 9.87% on top of the employee salary in Honduras.

Employee Payroll Tax Contributions

In Honduras , the typical estimation for employee payroll contributions cost is around 8.1%.

Individual Income Tax Contributions

The individual income tax in Honduras varies from 0% to 25%, calculated based on progressive rates. Household status and the number of children can influence overall tax rates.

Pension in Honduras

Pension arrangements in Honduras involve compulsory monthly contributions from both employers and employees. Men typically retire at the age of 65, while women retire at 60.

In Honduras, employers seeking to hire foreign workers must navigate several types of work permits and visas, including the Temporary Work Visa, Permanent Work Visa, Specialized Worker Visa, and Investor Visa. The application process involves submitting necessary documentation such as employment contracts, proof of qualifications, and a health certificate, as well as meeting specific labor law requirements. Employers must also demonstrate that no suitable local candidates are available for specialized roles. Understanding the visa types and the associated fees, as well as ensuring compliance with local regulations, is essential for successfully sponsoring foreign employees.

Mandatory Leave Entitlement in Honduras

The annual leave entitlement in Honduras is 10 days for a full time worker. These can include public holidays on top of that or within those days, which would otherwise be unpaid.

Public Holidays In Honduras

Honduras observes 11 national holidays throughout the year. Notable public holidays include:

Paid Time Off in Honduras

Honduras employees are entitled to 10 days of paid annual leave. The annual leave entitlement varies according to employee tenure:

• Under one years' service: 10 days paid leave
• Between 1-2 years' service: 12 days
• Between 2-3 years' service: 15 days
• Over 4 years' service: 20 days

Maternity Leave In Honduras

Employees receive 10 weeks of paid maternity leave, with 4 weeks taken before the birth and 6 weeks after. During this period, the employee receives their full salary: 66% from social security and 34% from the employer.

Paternity Leave In Honduras

Honduras does not have a statutory provision for paternity leave. However, legislative amendments to the Labor Code have been proposed to introduce paternity leave and extend maternity leave.

Sick Leave In Honduras

An employee is entitled to 26 weeks of paid sick leave, which can be prolonged to 52 weeks after a three-day observation period. The sick leave compensation amounts to 66% of the employee's average earnings from the preceding three months.

Parental Leave In Honduras

Honduras does not have a statutory provision for paternity leave.

Termination Process in Honduras

In Honduras, ending employment mandates notice and a written explanation, including a warning for misconduct. Unfair termination can lead to legal action, with the employer having to prove fairness. Failure to provide evidence can result in compensation. Fixed-term contracts can be terminated for specific reasons, which include:

• Business
• Personal
• Workers misconduct

Notice Period in Honduras

The minimum notice period is one day and may extend based on the length of employment, as described below:

• Less than 3 months' service: 24-hour notice
• 3-6 months' service: one week
• 6-12 months' service: two weeks
• 1-2 years' service: one month
• Over 2 years' service: two months

Severance in Honduras

When employees are terminated without just cause, Honduras mandates severance pay based on their length of service, as outlined below:

• Service between 3 to 6 months: 10 days pay
• Service between 7 to 12 months: 20 days pay
• Service more than 12 months: 1 month per year