Employer of Record Guatemala

Infotree Global Solutions help companies to achieve potential growth globally by providing its global payroll and Employer of record services in the country where it wants to expand. Setting up a business in a foreign country like Guatemala can be challenging but with Infotree global you don’t have to worry about a thing. As your Guatemala Employer of record, we take responsibility for all formal employment duties so that the company can focus on its business development without being concerned about the legal hassles.

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Hiring in Guatemala

The hiring process in Guatemala includes some typical recruitment steps and selection procedures. Different companies employ different methods to find their professionals from a wide range of applicants. However, variations lie in employment compliance laws to follow in the entire process. While expanding in Guatemala, all processes like handling compensation, payroll, etc should be well aligned with local rules and regulations. Choosing an employer of record is the smarter solution for business growth.

While you recruit in Guatemala, remember that compensation amounts are in Guatemalan quetzal. Make sure you are with a translator to communicate with Maya candidates, who use 20 different Mayan languages. Also, you can have translated documents in the respective language to make them readable to your company.

Furthermore, the hiring process in Guatemala exactly starts with finding the right staff from general job boards including LinkedIn, Computrabajo, Opcion Empleo, Tecoloco, etc. Then, common interviews can be taken through remote videos.

Employers can conduct background checks on potential employees, though the country’s Constitution doesn’t allow employers to restrict individuals from work because of their criminal records. You can demand the applicant to provide written consent for access to personal information. Besides, the Guatemalan labor code doesn’t allow for any discrimination based on language, gender, religion, race, age, ethnicity, economic situation, educational place, political beliefs, disability, or any illness.

When it comes to implementing compliance laws, you can hire workers either on a fixed or indefinite written contract. The contract should include all the hiring terms like compensation, working rules, roles and responsibilities, entitlements, termination details, etc.

Employment Compliance

Guatemala Employment law has few legal obligations which every employer needs to abide by. They should provide formal written employment letters for all employees. An Employer of Record Guatemala assists you to learn about the contract. Every contract must include all required details like remuneration, job title, termination policy, and others. Contracts should be in the Spanish language.

Employment Contracts – In Guatemala, employers are required to provide three copies of written contracts. Employer and employee keep a copy of the contract, and the third copy must be submitted to the labor authority in Guatemala. It’s mandated to publish contracts in Spanish mentioning all relevant details such as compensation, benefits, and working hours.

Working hours – The workweek in Guatemala is set to be 44 hours for day-shift workers and 36 hours for night-shift workers. If an employee works overtime, employers pay 150% of the normal salary.

Compensation – Guatemala’s minimum wage is the lowest amount the employers are legally bound to pay to employees. Guatemala’s minimum wage varies by sector. As of January 2021, in Guatemala non-agricultural employees make 92.88 Guatemalan quetzals per day. Export-sector factory workers are paid a minimum of 84.88auetzals per day.

Bonus – Workers earning the minimum wage are entitled to a monthly bonus of 250 quetzals. Other salaried employees also receive yearly bonuses twice. Each bonus is equal to a 1-month salary. An annual bonus that is equal to 1 month of regular salary is issued in July and Christmas or New Year’s.

Probationary period – The first two months of employment in Guatemala is considered an indefinite employment period, known as a probationary period. During this time, any party can terminate the contract without any cause.

Termination and severance – Employers must send the notice before terminating an employee. The length of notice depends on how much time the employee has worked in the firm. For example, an employee with a length of 6 months of service is entitled to one week’s notice while the one with one year receives prior 10 days’ notice. At the time of termination, employers must pay the applicable proportion of the annual bonus, the proportional year-end bonus, a proportional amount of vacation owed, and any wages amount liable to pay till the dismissal date.

When it comes to severance payment, employees can claim if the termination is done without any reasonable cause. It is generally equal to about one month of the wage for each service year.

Employee Entitlements

To stay compliant with local regulations regarding employee welfare and rights, employers must have a complete understanding of local employee entitlements. The employer of Record Guatemala can assist you in keeping all the activities legally compliant not only regarding compensation but also regarding vacation, paid leaves, health insurance, and pension benefits. It would create an employment contract including all criteria and entitlements updated with the statutory requirements. Partner with an international employer of record in Guatemala to unwind your stress of below maintenance:

Maternity leaves – As per maternity leaves, the laws allow female employees 84 days of paid leave. These 12 weeks’ leave consists of 30 days before birth and 54 days after it. Male employees are entitled to 2 days of paternal leave. The complete remuneration for maternity leaves is paid by both the Government Social Security and the employer.

Sick leave – Employees are generally entitled to five days of paid sick leave each year.

Vacation – In Guatemala, it is a requirement to pay vacation leave in advance. Employees are entitled to a period of 15 days of paid leave annually. This period applies to employees only after they work for a minimum of 150 days with the employer.

Health Benefits – In Guatemala, Health Insurance for individuals is taken care of in public/ private healthcare systems. If employers wish to offer this quota as a benefits package to their employees, they can prefer private medical insurance.

At Infotree Global Solutions, we as Guatemala Employer of Record assist you in defining the right entitlements for your employees.

Payroll Tax in Guatemala

Administrating payroll activities requires much effort, time, and costs. Its accuracy and timely actions are vital for an updated system and smooth working during global expansion. Only the best employer of record in Guatemala can handle all the processes effectively for accurate administration. You need to stay updated with all the taxes to contribute to different sectors. Salaries are paid on a monthly, bi-monthly, weekly, daily, or hourly basis, depending on the type of work and what is agreed upon in the employment contract.

Employers contribute 12.67% of the payroll (1% towards Workers Recreational Institute (IRTRA), 1% towards Professional Training Institute (INTECAP), and 10.67% towards Social Security) and employees contribute 4.83% to Social Security. Employers contribute. Income tax varies according to the level of earnings, but it ranges between 5 and 7%. 12% VAT on the income has to be paid at the end of every month. The penalty for late payment of VAT is 50%. Companies are liable to pay 25% of the net income as Corporate Tax to the Guatemalan government every year. The prevailing sales tax rate is 12% every year.

Challenges When Expanding into Guatemala

Setting up management in Guatemala can be difficult if you are not properly equipped with the country and its regulations. You need in-country expertise to take every step toward recruiting your top professionals. As the solution, if you establish your local entity there, you will require to undergo multiple complexities of financial goals and time management.

Therefore, the best decision is to outsource to the Guatemala Employer of Record who has a complete understanding of local laws, strategies, and processes. Thus, you need not divert your attention from core business goals to expansion plans that can be handled by other experts. No need to take the risk of setting up a branch. No effort on payroll, employment contracts, and benefits administration. Contact the Employer of Record for a seamless solution to your business expansion.

Benefits of Guatemala Employer of Record

To simplify your expansion process let Infotree Global assist you to deal with all the complexities. Be it hiring employees, distributing payroll, or taking care of expenses, we are there to assist you at every step. Partner with us and start your global business without worries.

Market Access – Relying on the professional expertise of an Employer of Record is the best way to enter an unknown market quickly. By using EOR services, an international organization can avail the expertise of a Guatemalan employee to work for its company. Besides quick access to the Guatemala market, the employer of record also enables the client to ease off worries related to payroll and HR.

In-Country Laws – It is hard to ignore the importance of regulations and compliance in a foreign country. If you are operating a business in Guatemala, you need to be well aware of the payroll and taxation rules. With Guatemala Employer of Record services, a company can hire a foreign individual or local employees and deal with the complexities of the country’s rules. Be it income tax, social security contribution, expanse management, withholding charges, or business tax, an EOR or PEO company takes care of it all with total compliance.

Diverse Solutions – No matter whether you already have a company in an international location or you are going to establish one, an employer of record can help you significantly. The employer of record Company can hire staff on your behalf without setting up a subsidiary in Guatemala. If your firm is already operating, using EOR for managing payroll tasks can be a great idea as it can present an effective solution to tax and accounting responsibilities in the country.

Why Infotree Global Solutions?

Setting up a branch office or just a subsidiary in Guatemala to assist with a micro-level team is a time-consuming and complicated process. There are stronger worker protections for labor law in Guatemala that need greater attention and expert details to understand the best practices.

As an Employer of Record Guatemala, we take all the responsibility to make it a smooth and easy journey for you to expand into Guatemala as we help you to hire your employees. We also offer customized end-to-end solutions to handle your HR matters to ensure that your practices comply with the regulations without suffering from the burden of establishing a foreign subsidiary or branch office hassle-free.

In addition to this, you get immense value and benefits including, but not limited to –

• Power-packed strategies and consultation to expand your business to Guatemala. We will help you with proven and powerful strategies to expand your business in Guatemala with proper Visa and regulation compliance from starting to the end.
• Easy onboarding and administrative activities for employment locally. We will also take care of payroll management systems and payments for all of your employees.
• We provide you with the supply of local benefits administration for recruitment expenses including employment arrangements.
• Hassle-free compliance with local laws and regulations so you don’t have to worry about any placement laws in Guatemala for your recruitment needs.
• You also won’t have to stress about any additional payroll taxes. It can immensely save countless hours that go into processing and submitting taxes for each specific case and business operation.

If you are seeking a professional employer of record service in Guatemala, do not waste your time searching for any other service provider and call us straight. We are committed to providing the best result to our customers and will make your company’s task our priority. Contact us for a demo.