Understanding Employment Norms in Guatemala: A Comprehensive Guide
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Hiring in Guatemala? Read on to find out the employment norms (like taxes, payroll and benefits) and EOR (Employer on Record) norms in Guatemala.

Employment Norms in Guatemala

Guatemala is a Central American country with a developing economy and is becoming an increasingly popular destination for foreign companies looking to expand their operations. If you are considering employing staff in Guatemala, it is important to understand the employer of record (EOR) norms, labor laws, and regulations that apply.

General Information:

  • The Guatemalan currency is the Guatemalan Quetzal (GTQ).
  • Guatemala City is the capital of Guatemala.
  • Spanish is the official language of Guatemala and some indigenous languages are also recognized. Legal documents can be drafted in Spanish.
  • As of 2022, the GDP of Guatemala was reported to be 234.78 USD billion.
Guatemala's labor laws mandate minimum wage, maximum work hours, overtime pay, and social security contributions. Let's have a look at all of them.
Guatemala map

Table of Contents

  • Agreements
  • Onboarding Process
  • Visa
  • Minimum Wage
  • Payroll Cycle
  • Annual Bonus
  • Health Benefits
  • Working Hours and Overtime
  • Leaves
  • Social Security
  • Taxes for Employers
  • Taxes for Employees
  • Probation
  • Termination
  • Severance Pay
  • Employees or Contractors
  • Final Words


In Guatemala, labor and employment-related agreements are generally governed by the Labor Code and subject to various regulations and requirements.

Types of Agreements:

  • Individual Employment Agreements: A contract between employer and employee that specifies terms and conditions of employment.
  • Collective Bargaining Agreements: Negotiated between trade unions and employer associations, covering a group of employees.

Contents of Agreements:

  • Must specify the employee's job title, place of work, salary, and any benefits.
  • Collective Bargaining Agreements must specify the duration, scope, and any amendments to individual agreements.
  • Agreements can also include provisions for overtime, work schedules, probationary periods, and termination procedures.
Onboarding Process

Onboarding Process

In Guatemala, there are no specific laws or regulations governing the onboarding process for new employees. Some general best practices are:
  • Providing a detailed job description and employment agreement to new hires, outlining job expectations and benefits.
  • Verifying the new employee's identity and obtaining a copy of their identification card or passport.
  • Providing new employees with the necessary forms and paperwork to enroll in social security and other benefits.
  • Conducting orientation and training sessions to familiarize new hires with company policies, procedures, and expectations.
  • Assigning a mentor or supervisor to provide guidance and support during the new employee's probationary period.


Guatemala has several types of work permits and visas, including:
  • Temporary Work Visa: for individuals coming to Guatemala for a temporary job or project.
  • Resident Visa for Work Purposes: for individuals coming to Guatemala for long-term employment.
  • Business Visa: for individuals conducting business activities in Guatemala, but not employed by a Guatemalan company.
  • Freelance Visa: for individuals who work remotely or independently and do not require a Guatemalan employer.

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Minimum Wage

Minimum Wage

The minimum wage in Guatemala is different for different sectors. It generally ranges between GTQ 3,323.60 to GTQ 3,062.63.
  • The monthly minimum wage in the Guatemala Department of Agriculture is GTQ 3,323.60.
  • GTQ 3,416.38 monthly is paid to the employees working in the Guatemala department of non-agricultural activities.
  • GTQ3,143.54 per month is paid to the ones engaged in the Guatemala Department of Export activity and maquiladora.
  • Those working in all other departments of agriculture are paid GTQ 3,237.53 on a monthly basis.
  • Employees engaged in all other departments of non-agricultural activities get GTQ 3,327.56 monthly.
  • Employees in all other departments of export activity and maquiladora earn GTQ 3,062.63 per month.
Payroll Cycle

Payroll Cycle

A monthly payroll cycle is followed in Guatemala.
Annual Bonus

Annual Bonus

The local workforce of Guatemala mandatorily receives the 13th and 14th months' pay as a bonus.
Health Benefits

Health Benefits

In Guatemala, there is no specific law mandating that employers provide health benefits to their employees. However, many employers offer health benefits as part of their compensation packages to attract and retain talent. Some common health benefits provided by employers in Guatemala include:
  • Private health insurance
  • Social security benefits
  • Access to on-site or off-site medical clinics or healthcare providers
  • Wellness programs
Working Hours and Overtime

Working Hours and Overtime

  • Work hours: Work hours in Guatemala are typically 8 hours per day and 40 hours per week. People work from Monday to Friday and it is a common thing to have a 44 hours work week.
  • Break: Employees are entitled to a 30-minute break for every 6 hours of work.
  • Overtime: Overtime work is compensated at a premium rate of 150% of the regular hourly rate. 200% of the hourly wage is paid, if the employee works on regular leaves, annual leaves, and official holidays.of daytime work and 2 hours of night work in 2 consecutive working days.


Sick Leaves

  • Employees can avail of paid sick leave in Guatemala, which is paid at different rates based on the salary of an employee and the duration of the sickness. The set amount is paid through Social Security to the employee.

Maternity leave:

  • Female employees are entitled to 84 days of paid maternity leave.Out of which leave of 30 days should be taken before the birth of a child. Employees get 100% salary during maternity leave, paid through Social Security.

Paternity leave:

  • Male employees are entitled to three days of paid paternity leave. They are entitled to get fully paid leaves, paid by the employer.
  • Parental leaves are not separately covered in Guatemala.

Annual leaves

  • Employees are entitled to 15 days of paid annual leave after one year of service.

Public Holidays (for the Calendar year 2023)

  • New Year's Day (1st January)
  • Maundy Thursday (6th April)
  • Good Friday (7th April)
  • Easter Saturday (8th April)
  • Labor Day (1st May)
  • Army Day (3rd July)
  • Independence Day (15th September)
  • Revolution Day (20th October)
  • All Saints' Day (1st November)
  • Christmas Day (25th December)

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Social Security

Social Security

In Guatemala, the social security system is administered by the Guatemalan Social Security Institute (IGSS) and provides benefits such as healthcare, pensions, and work-related injury compensation to registered employees.
Taxes for Employers

Taxes for Employers

In Guatemala, employers are responsible for paying several taxes, including:
  • Social Security contributions: Employers are required to contribute 10.67% towards Social Security.
  • Workers Recreational Institute (IRTRA): Employers contribute 1% to IRTRA.
  • Professional Training Institute (INTECAP): Employers contribute 1% to the INTECAP.

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Taxes for Employees

Taxes for Employees

In Guatemala, employees are subject to several taxes on their income. These include:
  • Income tax: Employees are subject to a progressive tax rate of 5% the employees whose income ranges between 0 to 300,000 GTQ. 7% of tax is levied on individuals who earn more than 300,000 GTQ.
  • Social security: Employees are required to contribute to the Guatemalan Social Security Institute (IGSS) at a rate of 4.83% of their monthly salary, with a cap of GTQ 20,000 per month.


In Guatemala, the probation period for an employee is typically two months, but it can be extended up to six months based on mutual agreement between the employer and employee.

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In Guatemala, there are various conditions and scenarios under which an employee can be terminated, which include:
  • Termination by mutual agreement between the employer and employee
  • Termination due to the end of a fixed-term contract
  • Termination due to the completion of a specific task or project
  • Termination for disciplinary reasons, such as misconduct or poor performance
  • Termination due to a reduction in workforce or restructuring
  • Termination due to a force majeure event or circumstances beyond the control of the employer
Severance Pay

Severance Pay

  • In Guatemala, an employee is eligible for severance pay if they have worked with the employer for at least one year.
  • The severance pay is calculated based on the employee's monthly salary, the duration of their employment, and the reason for the termination. The amount of severance pay can range from 15 to 45 days of salary per year worked.
  • If the employer terminates the employee without cause, they must pay the full severance amount. However, if the employee resigns or is terminated for cause, they may receive a reduced amount of severance pay.
Employees or Contractors

Employees or Contractors

  • In Guatemala, the legal definition of an employee is a person who works for an employer and receives compensation for their work.
  • The legal definition of a contractor is a person or company that performs a service for an employer under a contract that defines the service to be performed, the compensation for the service, and the period during which the service will be performed.
  • Misclassifying an employee as a contractor can result in fines and penalties for the employer. The employer may be required to provide back pay and benefits to the misclassified employee.
  • Misclassifying a contractor as an employee can also result in penalties and fines, as well as the potential for legal action by the contractor seeking employee benefits and protections.
Final Words

Final Words

Guatemala has various laws and regulations in place to protect the rights of employees and ensure fair and just employment practices. With a growing economy and a relatively low cost of living, Guatemala presents various opportunities for businesses and job seekers alike. However, it is essential to be aware of the country's employment norms and regulations to make informed decisions regarding employment in Guatemala.

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