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Employer costs, taxes, minimum wage and leave rules for hiring here, plus the faster route: hire a contractor with Ontop, no local entity needed.
2026
Currency
USD $ (US Dollar)
Employer contributions
~7.5% employer ISSS + ~6.75% AFP employer = ~14.25%
Minimum wage
$408.80/month (unchanged since 2025) ≈ $409/month
Payment frequency
Monthly / Bi-weekly
Calendar year (Jan 1 - Dec 31)
Capital
San Salvador
Timezone
CST (GMT-6)
Short answer: The minimum wage in El Salvador in 2026 is $408.80 a month, unchanged since 2025. A typical full-time salary is around $600 a month. Professionals paid as contractors through Ontop earn a median of $1,900 a month (110 active contracts, September 2026).
| 2026 figure | Local currency | USD |
|---|---|---|
| Minimum wage, monthly | $409 | $409 |
| Minimum wage, hourly | $2.14 | $2.14 |
| Average salary, monthly (approx.) | $600 | $600 |
| Median contractor pay through Ontop, monthly | n/a | $1,900 |
Minimum wage details: Decreto 11 MTPS, in force 2025-06-01 (+12%); no increase in 2026, still current. Commerce, industry and services $408.80; textile maquila $402.32; sugar cane/coffee processing $305.23; agriculture/fishing $272.53. Next mandatory review by 2028. Daily ~13.63 (sources cite 13.44).. USD figures use exchange rates from 1 October 2026. Updated October 2026.
Next step: compare contractor rates in El Salvador with other countries or estimate the full cost of an employee.
El Salvador runs on the US dollar, so there is no local currency to convert or budget around. What stays is the cost of employment itself, and that is where the decision between an employee and a contractor gets made.
Local salaries are modest by US standards, with San Salvador professionals typically between $700 and $2,500 a month. That makes it tempting to hire directly. Before you do, look at what sits on top of the salary and what you need in place to pay it legally.
On a $1,000 gross monthly salary, employer contributions to ISSS and the AFP pension fund add about $142, for a total near $1,142 a month. The employee takes home roughly $740 after their own contributions and income tax. Beyond the monthly bill:
Every one of these requires a registered employer in El Salvador.
Independent professionals in El Salvador work under a Contrato de Servicios Profesionales. Companies paying contractors in El Salvador through Ontop pay a median of $1,900 a month (the middle half earn between $1,300 and $2,791), across 110 active contracts in September 2026. That is Ontop's own payment data, not a market survey, and it sits well above local salary ranges, because companies hiring remotely here are buying specialized skills.
With Ontop as contractor of record, you engage the person through a compliant contract (yours or an Ontop template), get classification support and pay from one platform. Funds land in the contractor's Ontop Global Account in USD, the same currency they already use at home. You need no local entity, and pricing starts at $49 per contractor per month. Run the numbers for your role with the contractor cost calculator.
A contract title does not decide classification. If the person works your hours, works only for you and takes daily direction from your managers, Salvadoran authorities will treat it as employment, with back contributions and severance exposure attached. In that case, hire an employee. Ontop does not offer employer of record and never becomes the legal employer, so you will need your own entity or a local employer for that role. For independent specialists, read how an alternative to EOR for contractors works.
Employee or contractor
If the work is project-based or you need to move fast, a contractor gets you the same talent with a fraction of the paperwork.
Employee
~USD 1,142 total
/month
For a gross salary of
USD 1,000 gross/month
Setup
Local entity or employer of record, plus tax and social security registration
Employer contributions
~7.5% employer ISSS + ~6.75% AFP employer = ~14.25%
Mandatory extras
Aguinaldo
Monthly admin
Monthly payroll - ISSS + AFP by month-end - ISR withholding - annual April return
Contractor with Ontop
No local entity
$49
/contractor/month
The agreed rate, plus Ontop from $49 per contractor per month.
Sign a contract, yours or an Ontop template. No local registration on your side.
No employer contributions: the contractor handles their own taxes and social security.
One payment per invoice, in one payroll run.
Paid into their Ontop Global Account in USD.
See the full side-by-side comparison
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A contractor's rate usually covers their own taxes, so compare total cost, not just gross pay. Run your numbers in the contractor vs employee calculator.
Hiring here: the full breakdown
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Payroll guide
Employer costs come on top of gross pay. Use these figures to budget a hire and to compare it with a contractor rate.
Total monthly cost
~USD 1,142 total
Example gross salary
USD 1,000 gross/month
~USD 740 net
Net pay to the employee
Tax and employee contributions
Withheld from gross pay
~USD 142 SS
Employer contributions on that salary
Employer contributions
~7.5% employer ISSS + ~6.75% AFP employer = ~14.25%
Employee contributions
~3% employee ISSS + ~6.25% AFP employee + income tax
Total cost above gross
~7.5% above gross (ISSS+AFP)
Figures are estimates for planning. Rates change with each budget and can vary by sector, so confirm them before you make an offer.
What people earn here, from the legal floor to the main cities, plus the extra pay most employers budget for.
National average
~USD 600
Per month
San Salvador
USD 700 - 2,500
~40%
Santa Ana
USD 500 - 1,800
~10%
Monthly gross. National average salary per year:
~USD 7,200
Minimum wage
$408.80/month (unchanged since 2025) ≈ $409/month
Paid:
Monthly
Extra pay
Aguinaldo
1-2 months salary mandatory; scales with seniority
December
Collective agreements can set sector minimums above the national one. Check whether one applies to the role before you set the salary. Next step: estimate the full cost of an employee.
Who collects what, how often, and what happens when a payment is late.
Income tax brackets
0% up to USD 4,064 / 10% / 20% / 30%
Tax year:
Calendar year (Jan 1 - Dec 31)
Filing calendar
Monthly by last day
Social security payments
April 30 (annual income tax)
Income tax
By January 31
Employee tax certificate
Constancia de Retenciones
April 30
Annual return
Declaracion Anual del Impuesto sobre la Renta
Late payment penalties
Late ISSS: 2% monthly; late AFP: 2% monthly; late ISR: 25% + interest
Who collects what
DGII / Ministerio de Hacienda
Income tax (ISR)
ISSS
Health and social security
Superintendencia del Sistema Financiero (SSF)
AFP pension funds oversight
The time off and paid leave every employee is entitled to by law. Budget for it when you compare an employee with a contractor.
Annual leave
Vacacion Anual Remunerada
15 days/year (after 1 year)
Public holidays
~12 public holidays
Sick leave
Licencia por Enfermedad
ISSS pays from day 4 at 75%
Maternity leave
16 weeks (112 days) maternity
Full pay from ISSS
The contracts you can use, and what ending an employment relationship costs.
Permanent
Contrato de Trabajo por Tiempo Indefinido
Fixed term
Contrato de Trabajo por Tiempo Definido
Independent contractor
Contrato de Servicios Profesionales
Collective agreements
Contrato Colectivo de Trabajo
Ending employment
Indemnizacion por despido injustificado
How it is calculated
30 days salary per year of service
Calling someone a contractor does not make them one. If the role works like employment in practice, local authorities can reclassify it, with back contributions and penalties.
The errors that most often trigger back payments and penalties here, and what to do instead.
AFP Pension Fund Selection and Transfer
Risk Level: HIGH
El Salvador has two AFP providers (Crecer and Confia). Employers must enroll employees in their chosen AFP and remit contributions on time. Errors in AFP selection or late remittances generate SSF fines plus interest.
Aguinaldo Tiered Calculation
Risk Level: HIGH
El Salvador's Aguinaldo is tiered: 15 days salary (1-3 years), 19 days (3-10 years), 21 days (10+ years). Many employers apply the flat 15-day minimum regardless of tenure. Ministry of Labour inspectors audit Aguinaldo amounts and impose back-payment plus fines.
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FAQ
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Ontop works with contractors, not employees. As Contractor of Record, Ontop handles contracts, compliance documents and payments for contractors in 150+ countries. To employ someone, you need a local entity or an employer of record. Ontop doesn't act as your employer of record.
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Employers pay contributions on top of gross salary. The cost table on this page shows the rates that apply here and a worked monthly example. A contractor with Ontop costs the agreed rate plus Ontop from $49 per contractor per month.
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Many countries require an extra month or an annual bonus for employees. The salaries section on this page shows the one that applies here and when it is usually paid. Contractors are paid what you agree in the contract.
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Employers withhold income tax and the employee's social security share every pay run, then pay them to the local authorities. The taxes section on this page lists the brackets, rates and filing deadlines that apply here.
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Yes. The contractor vs employee calculator compares the full cost of an employee, employer contributions included, with a contractor rate plus Ontop's monthly fee.
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When the work is project-based, you need to start fast or you don't have a local entity. If the person will work fixed hours, under your direction and only for you, local law may treat them as an employee, so hire them as one.
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Misclassifying employees as contractors, missing tax and social security deadlines, and ignoring collective agreements that set higher wage floors. The mistakes section on this page covers the ones that come up most often here.
Compare employer costs, taxes and contractor rules in nearby countries:
Ready to hire? See Ontop pricing or learn how to build a global team without an employer of record.
Ready to hire? See Ontop pricing or learn how to build a global team without an employer of record.