Employer of Record in Honduras: how to hire compliantly without an entity.
Employ Latam is an employer of record in Honduras. We become the legal employer for your hire, so you can employ full-time staff there without setting up an entity. Locally compliant contracts, monthly payroll, statutory benefits, taxes. Below: what the law actually requires, in plain English.
- Country
- Honduras
- ISO code
- HN
- Region
- North America
- Phone code
- +504
- Employ Latam coverage
- Full EOR + contractor payments
Last updated July 2026
Overview
Honduras is one of 18 countries where Employ Latam lets you hire without setting up a local entity. We handle the employment contract, payroll, statutory contributions, and benefits, so you can focus on managing the work rather than the paperwork.
Honduran labor law follows the Código del Trabajo, which sets clear rules on working hours, leave, severance, and mandatory benefits. Employers hiring here need to budget for statutory contributions on top of base salary and plan for the mandatory 13th-month payment. Getting these details wrong is the most common reason companies delay a hire or run into compliance issues later.
Country at a glance
| Category | Details |
|---|---|
| Currency | Honduran Lempira (HNL) |
| Working week | 48 hours per week |
| Standard workday | Set within the 48-hour statutory work week |
| Probation period | Up to 2 months |
| Notice period | Typically 6.5 weeks |
| 13th-month salary | Mandatory |
| Payroll cycle | Monthly (standard practice) |
What this means in practice
- Overtime: Hours worked beyond the statutory week are paid at a 25% premium over the regular rate.
- Leave: Employees are entitled to 10 days of statutory annual leave and 11 public holidays per year.
- Parental leave: Maternity leave runs 10 weeks; there is no statutory paternity leave.
- Severance: Typical severance for termination without cause runs around 23.1 weeks of pay, varying by tenure and circumstances.
- Retirement age: 65 years.
- Minimum wage: Set at 9,596.64 HNL per month as a national baseline (actual minimum wages can vary by sector and company size under Honduran regulation).
Contributions and tax
| Item | Employer | Employee |
|---|---|---|
| Health and long-term care | 5% | 2.5% |
| Old age, invalidity, survivors | 2% | 1% |
| Total social contributions | 7% | 3.5% |
Corporate tax sits at 25%, and the top personal income tax rate is also 25%. VAT is charged at 12% on applicable goods and services. Employers should factor the 7% employer contribution rate into total cost of employment when budgeting for a Honduran hire.
Employment contracts and worker types
Honduras defaults to the indefinite-term contract. If you are hiring someone for ongoing work, that is the contract you use. Fixed-term and task-based contracts exist but require justification tied to the nature of the work. Using them to avoid statutory protections is a common compliance risk.
All contracts longer than 60 days must be written and registered with the Ministry of Labour within 15 days of signing. Verbal agreements are technically permitted for short-term or low-value work under 60 days, but written contracts are always the safer baseline.
Contract types at a glance
| Contract type | Typical use | Max duration | Probation allowed |
|---|---|---|---|
| Indefinite (tiempo indefinido) | Ongoing roles, standard employment | No fixed end | Up to 60 days |
| Fixed-term (tiempo determinado) | Seasonal work, project with defined end | 1 to 2 years, must be justified | Up to 60 days |
| Specific task (obra determinada) | Project-based work ending at completion | Until task is complete | Up to 60 days |
| Probationary | Evaluating a new hire before confirming employment | 60 days maximum | N/A (is itself the trial period) |
A few things worth noting:
- Probationary periods run up to 60 days. During that window, either party can end the relationship without cause and without severance.
- Fixed-term contracts end automatically at the agreed date. No notice is required at expiration, but repeated renewals can convert the arrangement into an indefinite contract in practice.
- Honduras has no zero-hour contract structure. Part-time and hourly workers follow the same rules as full-time employees, with pay and benefits prorated accordingly.
- There is no distinct internship contract category. Internships fall under specific task or temporary arrangements and carry the same registration requirements.
Misclassification risk
Classifying an employee as an independent contractor to avoid payroll obligations is a real exposure in Honduras. Labor courts apply an economic dependency test. If the person works set hours, uses your tools, and has a single client (you), they are likely an employee under Honduran law regardless of what the contract says. Statutory contributions, severance, and benefits would apply retroactively if a claim is upheld.
What an employment contract must cover
At minimum, a compliant Honduran employment contract includes:
- Full names and identification of both parties
- Job title and description of duties
- Agreed salary and payment frequency
- Work location and hours
- Contract duration (or confirmation it is indefinite)
- Reference to applicable collective agreement, if any
Employ Latam issues locally compliant employment contracts for every hire and handles Ministry of Labour registration. Onboarding goes live in 72 hours.
Hiring a contractor in Honduras
Many teams start with a contractor in Honduras before they hire an employee. We draft the contractor agreement, collect the contractor's local tax ID, pay them in local currency or USD, and withhold tax where Honduras requires it. You approve invoices and pay one USD invoice.
Contractor or employee
Before you start, we review the role and tell you whether it looks more like a contractor or an employee. How Honduras law draws the line is covered above.
When to convert
A contractor who works only for you, keeps set hours and uses your tools is effectively an employee under most Latin American labor law. We can move them onto an employment contract with us: same person, same pay.
Contractor payments from $29 per contractor per month.
Payroll, taxes, and the 13th-month salary
Payroll in Honduras runs on a monthly cycle, with statutory contributions withheld from each paycheck and remitted by the employer. Employ Latam handles these filings and payments as part of the employment contract, so the employee receives a compliant payslip and the employer sees one consolidated invoice.
Honduras requires two extra annual payments beyond base salary: a 13th-month salary (Aguinaldo) and a 14th-month payment (Bono 14, common practice tied to social security contributions). Both are calculated on top of the employee's regular monthly salary and are mandatory as of 2026. Employers should build these into total cost projections rather than treating them as optional bonuses.
Other payroll basics:
- Monthly minimum wage: 9,596.64 HNL (2026)
- Statutory work week: 48 hours
- Overtime premium: 25% over the regular hourly rate
- Corporate tax rate: 25%
- Top personal income tax rate: 25%
- VAT: 12%
Employer and employee contributions
| Contribution | Employer rate | Employee rate |
|---|---|---|
| Health and long-term care | 5% | 2.5% |
| Old age, invalidity, survivors (pension) | 2% | 1% |
| Total social security | 7% | 3.5% |
These rates apply to the employee's covered salary and are deducted or remitted each pay cycle. Employ Latam calculates and files these contributions as part of standard payroll operations, so neither party needs to track rate changes manually.
What this means in practice
- Gross salary plus the 7% employer contribution is the baseline cost before factoring in 13th and 14th month accruals.
- The 13th-month and 14th-month payments should be accrued monthly (roughly 1/12 of annual salary each) so the year-end and mid-year payouts don't create cash-flow surprises.
- VAT and corporate tax apply at the business level, not to individual payroll, but matter if the employer is also registering a local entity rather than using an EOR.
- Payroll runs in local currency (lempiras), keeping compensation aligned with local cost of living and avoiding conversion disputes.
Mandatory benefits, vacation, and parental leave
Honduras sets a defined package of statutory benefits, and employers cannot contract around them. Employ Latam builds these into every locally compliant employment contract, so your team gets what they're legally owed without you having to track each rule yourself.
Core mandatory benefits:
- 13th-month salary, mandatory as of 2026 and typically split across the year per local custom.
- Statutory annual leave starting at 10 days.
- Social security contributions covering health, long-term care, old age, invalidity, and survivor benefits.
- A 48-hour statutory work week, with overtime paid at a 25% premium over the regular rate.
- Maximum probation period of 2 months.
Social contributions are split between employer and employee:
| Contribution | Employer | Employee |
|---|---|---|
| Health / long-term care | 5% | 2.5% |
| Old age, invalidity, survivors | 2% | 1% |
| Total | 7% | 3.5% |
Severance and notice follow Honduran labor law for terminations without cause. Typical notice runs around 6.5 weeks, and typical severance without cause runs around 23.1 weeks, though actual amounts depend on tenure and circumstances. Employ Latam calculates these obligations correctly at offboarding so there's no exposure to miscalculated payouts.
Leave entitlements
| Leave type | Entitlement | Paid by |
|---|---|---|
| Annual leave | 10 days | Employer |
| Sick leave | Set by social security rules; varies by case | Social security / employer |
| Maternity leave | 10 weeks | Social security / employer |
| Paternity leave | Not statutorily mandated | N/A |
| Public holidays | 11 days per year | Employer |
Maternity leave runs 10 weeks and is generally coordinated through social security and employer contributions. Honduras does not currently mandate paid paternity leave, so any time off for fathers is at company discretion unless set by internal policy or collective agreement.
Public holidays total 11 days per year. Exact dates shift annually with civic and religious observances, and Employ Latam keeps the calendar current so payroll and time-off tracking stay accurate.
None of these figures are negotiable downward. Employers can offer more generous vacation, parental leave, or bonuses as a retention tool, but the statutory floor applies to every employee hired in Honduras, regardless of contract type or seniority.
Severance, termination, and notice periods
Honduras ties both notice and severance to length of service, and the rules apply whether the employer is a local company or a global team hiring through an employer of record. Termination without cause triggers statutory severance (called "auxilio de cesantía") plus notice, or payment in lieu of notice. Termination with just cause, documented and procedurally correct, can reduce or eliminate severance, but the bar for "just cause" is specific and needs to be handled carefully.
Key points to plan around:
- Probation period: up to 2 months maximum. Employment can be ended more freely during this window, but the limit is fixed and cannot be extended by contract.
- Notice: scales with tenure, averaging around 6.5 weeks for a typical mid-tenure employee, though the exact period depends on years of service.
- Severance: averages around 23.1 weeks of pay for termination without cause, again scaling with tenure.
- 13th-month salary (aguinaldo) is mandatory and any accrued but unpaid portion is due at termination, regardless of cause.
- Overtime, unused annual leave (10 days statutory), and other accrued entitlements are also settled at exit.
| Tenure | Notice period | Severance owed (without cause) |
|---|---|---|
| Under 1 year | Shorter, tenure-based notice period | Prorated based on months worked |
| 1-3 years | Increases with tenure | Scales up from entry-level accrual |
| 3-5 years | Mid-range notice period | Continues to scale with tenure |
| 5+ years | Longest statutory notice tier | Highest accrual tier, capped per statute |
Exact weeks owed at each tenure band depend on the employee's specific years of service and salary structure. Employ Latam calculates the applicable notice and severance for each employee before an offboarding date is set, so there are no surprises at exit.
A few operational notes for hiring managers:
- Terminations for cause require documentation. Verbal warnings alone rarely hold up; a paper trail matters.
- Severance and final pay are typically due at the time of separation, not on the next regular payroll cycle.
- Collective bargaining agreements, where they exist, can modify notice and severance terms above the statutory floor.
- Mass layoffs or restructurings may trigger additional procedural requirements beyond individual terminations.
We handle the calculation, the paperwork, and the final payment run for every termination, so the customer's job is limited to deciding on the exit and communicating it. We manage the compliance mechanics behind it.
Recent regulatory changes
Honduras updates its labor and tax framework periodically, and employers should track changes to minimum wage, social security contributions, and leave entitlements each cycle rather than assuming figures stay static year to year. The table below covers the most relevant recent adjustments employers need to plan around.
| Date | Change | Impact on employers |
|---|---|---|
| Recent cycle | Monthly minimum wage set at 9,596.64 lempiras | Payroll baselines must reflect the current wage floor before contracts are issued |
| Recent cycle | Corporate tax rate confirmed at 25% | Affects entity-level tax planning for companies with a local presence |
| Recent cycle | Top personal income tax rate confirmed at 25% | Relevant for structuring employee compensation and tax withholding |
| Recent cycle | VAT rate held at 12% | Impacts cost calculations for goods and services tied to employment (equipment, benefits in kind) |
| Recent cycle | 13th-month salary confirmed as mandatory | Employers must budget for this statutory bonus in addition to base salary |
| Recent cycle | Maternity leave set at 10 weeks | Employers must plan coverage and continuity for staff on leave |
| Recent cycle | Employee and employer social contributions itemized (health/long-term care and old-age/invalidity/survivors) | Payroll systems must apply split rates correctly: employees contribute 2.5% (health) plus 1% (old age), employers contribute 5% (health) plus 2% (old age) |
Social security contributions in Honduras are itemized across two categories: health and long-term care, and old age, invalidity, and survivors coverage. Employees contribute 3.5% total (2.5% health, 1% old age), while employers contribute 7% total (5% health, 2% old age). These rates apply as of 2024 and should be built into any payroll calculation from day one.
Statutory leave entitlements to track:
- Annual leave: 10 days
- Public holidays: 11 days per year
- Maternity leave: 10 weeks
- Paternity leave: not mandated (0 weeks)
Notice periods and severance also merit attention. Typical notice runs around 6.5 weeks, and severance without cause is typically around 23.1 weeks, though the exact figure can vary by tenure and circumstances of termination. Employers should treat these as planning benchmarks rather than fixed universal numbers, since case-specific factors affect the final calculation.
Overtime is paid at a 25% premium over the regular hourly rate, and the statutory work week is capped at 48 hours. Probation periods are capped at a maximum of 2 months, which sets the window for evaluating new hires before standard termination rules apply in full.
Employ Latam tracks these figures on an ongoing basis and applies the current statutory rates to every contract, payroll run, and benefits calculation for employees hired in Honduras. Locally compliant employment contracts and statutory contributions are handled as part of onboarding, so you don't need to monitor each regulatory cycle yourself.
Frequently asked questions
- Do I need a local entity to hire employees in Honduras?
- No. Employ Latam acts as the employer of record, so we hold the local employment relationship, run payroll in compliance with Honduran labor law, and handle statutory contributions on your behalf. You manage the employee's day-to-day work, and we take care of the legal and administrative side.
- What is the most common employment contract in Honduras?
- The indefinite-term contract is the standard for most hires. It has no fixed end date, carries full statutory protections, and is what the Labor Code assumes unless you have a documented reason to use something else. Fixed-term and task-based contracts are valid options but must be justified by the nature of the work, and misusing them to limit benefits creates legal exposure.
- When is the 13th-month salary paid in Honduras?
- Honduras splits the extra annual salary into two payments: Aguinaldo (13th month), typically paid in December, and Bono 14 (14th month), typically paid mid-year. Both are calculated as one month's additional salary distributed across the two payouts, or accrued monthly depending on employer preference. Employ Latam accrues these automatically so the cost is reflected in every payroll cycle rather than appearing as a lump sum surprise.
- How many vacation days are employees in Honduras entitled to?
- Honduran law sets statutory annual leave at 10 days per year. This is a minimum baseline; some employers offer more as part of a competitive package, but nothing below this threshold is compliant. Employ Latam tracks accrual and usage as part of the employment contract it manages on your behalf.
- How much severance is owed for terminating an employee without cause in Honduras?
- Severance in Honduras scales with tenure, averaging around 23.1 weeks of pay for a typical without-cause termination, though the exact amount depends on the employee's years of service and salary. Notice, which averages around 6.5 weeks, is owed on top of severance or paid in lieu. Employ Latam calculates the precise figure for each employee before termination, factoring in tenure, accrued 13th-month salary, and unused leave.
- What is the current minimum wage in Honduras?
- The monthly minimum wage in Honduras is 9,596.64 lempiras, current as of 2026. This figure is periodically revised, so employers should confirm the applicable rate at the time of hiring rather than relying on prior-year figures. Employ Latam applies the current statutory minimum to every payroll calculation automatically.
We handle the contract, payroll, taxes, and benefits in Honduras so you can hire that person this month.
Statutory figures for Honduras, each traced to a named source with its reference year. Sourced from OECD, the World Bank, the ILO, ISSA and national statutes.
Latest reference period: 2026
Figures are statutory reference values maintained internally and refreshed against primary sources. They are a starting point for planning, not legal advice — we confirm the exact numbers for your role before you hire.
What changed in Honduras
Checked against official sources on .
No rule changes recorded since we began logging them.
Corrections to this guide
- Corrected 11 October 2026Minimum monthly wage: 9,596.64 a month → sectoral · sourceHNL/month by 11 activity branches x firm-size bands (Acuerdo Ejecutivo SETRASS 233-2026, retroactive 1 Jan 2026); lowest = 9,596.64 (agriculture, 1-10 workers)
- Corrected 11 October 2026Maternity leave: 10 weeks → 12 weeks · sourceLabour Code art. 135: 10 weeks (4 before + 6 after); IHSS-insured workers receive 84 days (42+42) incapacity subsidy at 66%
What a hire in Honduras costs
Employers in Honduras pay statutory contributions of 7% on top of gross salary. At the average monthly wage of HNL 11,248, that adds HNL 787 a month.
| Salary | Gross per month | Employer contributions | Total per month | Total per year |
|---|---|---|---|---|
| Average monthly wage | HNL 11,248 | HNL 787 | HNL 12,035 | HNL 144,425 |
Employer contribution rate: ISSA Country Profiles, as of Jan 2024
Average monthly wage: ILOSTAT, as of Jan 2025
Amounts in HNL. Totals per year are twelve monthly salaries plus contributions.
What the contributions pay for
- Health and long-term care5%
- Pension, invalidity and survivors2%
Components: ISSA Country Profiles, as of Jan 2024
On top of this: the 13th salary where the law requires one, paid leave, and notice and severance if the employment ends (all in the tables above), plus our employer of record fee, from $349 per employee per month. Every quote we send breaks each of these out for the actual role.
Found someone in Honduras? Let's employ them.
We'll send a fully-loaded cost breakdown for the role within a few hours, then draft a locally compliant employment contract. Most Honduras hires can start within 1 to 3 business days once docs are in.
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