Establishing and managing payroll in Guatemala
If you are planning on hiring in Guatemala, the process of hiring and setting up payroll can be difficult for foreign organizations, with language barriers and regular unexpected delays often stalling progress and cutting into revenues.
At Horizons, we specialize in providing Guatemala payroll support services, providing organizations with a way to outsource the time-consuming process of setting up and managing payroll. We offer flexible outsourcing packages for businesses that have already registered an entity in Guatemala, as well as those that haven’t
If you have an entity
For businesses that have already registered an official entity in Guatemala, we offer a comprehensive and tailored payroll outsourcing service. Our expert team will set up and manage your payroll, also handling all of your associated administration, HR, and compliance with local laws.
This level of outsourcing is ideally suited to larger organizations and those expanding into Guatemala in the long-term.
If you don’t have an entity
If you have not registered an official entity in Guatemala yet, we can provide our more comprehensive payroll service, offering our Guatemala subsidiary to work as your employer of record in the country. Our Guatemala payroll experts can also manage your HR, contracts, legal compliance, and more.
This route to employing in Guatemala is an ideal way to flexibly expand your business into Guatemala’s lucrative marketplace without any hassle.
Expanding your business in Guatemala with Horizons
Guatemala payroll guide
Taxation and withholdings in Guatemala
Employers and employees must both contribute a percentage of salary toward the country’s social security system. Employers provide 12.67% and employees provide 4.83%.
Income tax in Guatemala is either 5% or 7%, depending on the level of income.
Entitlements and terminations rules in Guatemala
Notice of termination is generally required for employees in Guatemala. The exact length of notice depends on the employee’s length of service. After six months, employees are entitled to one week of notice and this rises to ten days for one year of service and continues to rise up to one month after five years of service.
Severance payments are also sometimes required and usually equals around one month of salary per year of service.
How to establish payroll in Guatemala
To establish and run payroll yourself, your organization will need to follow a complex set of laws and procedures that are unique to Guatemala, as well as operate and negotiate in the Guatemalan language. You will usually have to register a legal entity, sign up with the relevant authorities, open bank accounts, and hire a workforce.
Alternatively, you can choose to outsource the payroll setup and management to Horizons. Our experts can set up and manage your payroll and all associated administration so you don’t have to. We can also provide use of our Guatemala subsidiary to act as your employer or record, so you can start hiring and expanding in Guatemala even if you don’t have an established entity in the country.
Your all-in-one solution for payroll outsourcing and Guatemala expansion
Horizons’ Guatemala payroll, PEO, and employer of record services enable your business to start trading in Guatemala compliantly and more efficiently. We provide everything necessary to begin your Guatemalan operations in as little as 48 hours, even if you don’t have a registered entity in the country, and could save your business as much as 82% in expansion costs.
At Horizons, we can also take care of your organization’s payroll, expenses, benefits, and more in Guatemala. Additionally, we will cover your HR duties, as well as employment and tax compliance work. And as the only global PEO with a dedicated in-house recruitment department, Horizons can rapidly source, hire, and onboard your local employees.