Setting up and maintaining payroll in Nicaragua
If your organization is planning an expansion into Nicaragua, an early part of the process is likely to be registering an official entity in the country, as well as setting up payroll and hiring employees. However, this can regularly take longer than expected, with complex administrative procedures and unique business laws that can stall progress.
At Horizons, we specialize in helping organizations spanning all industries expand internationally, including into Nicaragua. We can handle your payroll setup and management, even if you don’t have a legal entity in Nicaragua.
Why choose the Horizons payroll solution?
If you have an entity
If your organization already has an entity registered in Nicaragua, then we can help you by setting up and managing your in-country payroll. We’ll ensure everything is in full compliance with Nicaraguan legislation and ready to go as quickly as possible, so you don’t have to worry about the complex details and can focus on your expansion.
If you don’t have an entity
If you don’t have a registered entity in Nicaragua, you can use our full payroll outsourcing service. Our Nicaraguan subsidiary will act as employer of record for your employees, and our team will handle the HR, administration, and complex legal compliance work.
Choose this service for a low-risk, flexible, and scalable solution for your Nicaraguan payroll setup and management, with all the benefits of hiring locally and none of the usual complications.
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Nicaragua payroll guide
What are the rules for payroll and withholdings in Nicaragua?
Employers and employees in Nicaragua must contribute part of salaries to social security. Employers must pay 18.5% and employees must pay 6.35%.
Income tax in Nicaragua is progressive, with rates ranging from 0% to 30% depending on income level.
Contractual entitlements and termination laws
Permission to terminate employees must be received from Nicaragua’s Labor Inspection Department, otherwise, you could be open to legal action. In general, notice periods of around 15 days are provided to employees prior to termination. Additionally, severance payments are often necessary, with around one month of salary being paid for every year of service (although the amount per year varies for longer tenures).
How to set up payroll in Nicaragua
It is possible to establish your Nicaragua payroll independently. This can be a viable choice for larger organizations looking to build a long-term presence in the country, but it can also be costly and result in significant delays.
Another option is to outsource your payroll setup and management to Horizons. We can offer the use of our Nicaraguan subsidiary to act as employer of record for your employees in Nicaragua, so you can avoid the complex setup and management process, and can benefit from our solutions even if you don’t have a legal entity in Nicaragua. Additionally, we can set up and run your payroll, HR, compliance, and any other associated work, allowing you to work on successfully expanding your businesses in Nicaragua.
Manage payroll in Nicaragua
Whether it’s EOR service or just payroll management, Horizons’ employment experts can help you get started in 24h.
