Employer of Record in Honduras

How an Employer of Record works in Honduras

An Employer of Record (EOR) is a third-party company that acts as an employer on behalf of another business. Overseas business owners often use EORs to hire employees in a country where they don’t have a legal entity.

Setting up your own legal entity in a new country is expensive and time-consuming, but EORs offer a fast, affordable alternative. An EOR provider, like Rivermate, can provide a legal entity in Honduras and employ Honduran workers on your behalf.

It will complete all the administrative processes involved with hiring, paying and dismissing Honduran employees. That leaves you free to focus on doing what you do best: managing these employees and growing your business.

Rivermate’s EOR services are built on three pillars:

• Local HR experts who understand the market and employment laws.
• A network of partners that allows us to provide competitive benefits.
• The Rivermate platform that simplifies every aspect of the employment relationship.

Using an EOR provider will allow you to hire in Honduras with no fuss, while following all local employment laws.

Honduras labor market: At a glance

The hiring market
Greatest hiring activity:	Tegucigalpa, San Pedro Sula, Choloma, La Ceiba.
Hiring timelines:	Typically 2-3 days.
In-demand sectors:	Manufacturing, Agriculture, Construction.
Sectors with skills shortages:	There is a shortage of skilled workers in most of the main industries of Honduras, as many talented Hondurans tend to seek work overseas.

The salary market
Employer tax contributions:	Employers in Honduras will make mandatory tax contributions on top of each employee’s salary. Healthcare (IHSS): 5% Disability, Old Age, Death: 3.5% (capped at a maximum salary of HNL 11,903.13) Pension (RAP): 1.5%, above a specific salary threshold (HNL 10,282.37 for companies with 10 or more employees; 9,197.99 for Maquiladoras or companies with fewer than 10 employees) Labor Coverage Insurance: 4% (capped at three times the highest applicable minimum wage). Collective Capitalization Pillar: 2.6%
Monthly minimum wage:	Between HNL 9,596.64 and HNL 19,298.7 a month. Honduras's minimum wage has a complicated structure. It depends on the size of the company and the industry it’s serving.
Average gross annual salary:	HNL 87,780.
Personal income tax rates:	Individuals pay tax on income in excess of HNL 228,324.33. From there, income is taxed progressively at rates between 15% and 25%.

What will it cost to hire in Honduras?

Honduran employees tend to have lower base salaries than those working similar roles in other Latin American countries.

However, there are a few surprising statutory bonuses that can increase the overall cost of hiring in Honduras.

Salary requirements

Honduras doesn’t have a single minimum wage. It has 44 different amounts.

This is based on 11 categories of industry and 4 categories of company size. The monthly minimum wages for 2026 are outlined below.

Industry	Number of employees	Monthly
1. Agriculture, forestry, hunting and fishing	1 to 10	HNL 9,596.64
	11 to 50	HNL 10,137.04
	51 to 150	HNL 11,313.45
	151 or more	HNL 12,349.49
2. Mining and quarrying	1 to 10	HNL 13,110.80
	11 to 50	HNL 13,527.23
	51 to 150	HNL 16,248.28
	151 or more	HNL 18,530.19
3. Manufacturing	1 to 10	HNL 12,869.14
	11 to 50	HNL 13,714.21
	51 to 150	HNL 16,472.88
	151 or more	HNL 18,786.37
4. Electricity, gas and water	1 to 10	HNL 13,533.74
	11 to 50	HNL 13,963.55
	51 to 150	HNL 16,772.40
	151 or more	HNL 19,127.95
5. Construction	1 to 10	HNL 13,292.06
	11 to 50	HNL 13,714.21
	51 to 150	HNL 16,472.88
	151 or more	HNL 18,786.37
6. Wholesale and retail trade	1 to 10	HNL 13,292.06
	11 to 50	HNL 13,714.21
	51 to 150	HNL 16,472.88
	151 or more	HNL 18,786.37
7. Restaurants and hotels	1 to 10	HNL 13,292.06
	11 to 50	HNL 13,714.21
	51 to 150	HNL 16,317.57
	151 or more	HNL 18,092.32
8. Transport, storage and communications	1 to 10	HNL 13,412.92
	11 to 50	HNL 13,838.87
	51 to 150	HNL 16,622.64
	151 or more	HNL 18,957.14
9. Financial institutions, real estate and business services	1 to 10	HNL 13,654.55
	11 to 50	HNL 14,088.24
	51 to 150	HNL 16,922.16
	151 or more	HNL 19,298.72
10. Community, social and personal services, security and cleaning	1 to 10	HNL 13,050.39
	11 to 50	HNL 13,464.88
	51 to 150	HNL 16,173.38
	151 or more	HNL 18,444.80
11. Hospital activities	1 to 10	HNL 13,050.39
	11 to 50	HNL 13,464.88
	51 to 150	HNL 15,979.13
	151 or more	HNL 17,881.65

The minimum wage in Honduras will increase across all industries in 2027 by between 6% and 7.5%, depending on the size of the company.

Company size	2027 increase
1 to 10 workers	6%
11 to 50 workers	6%
51 to 150 workers	7%
151 or more workers	7.5%

Employer contributions

Employers in Honduras are responsible for several payroll contributions, calculated as a percentage of an employee’s monthly wage. These contributions can equal up to 16.6% of their wages.

Contribution	Rate	Notes
Healthcare (IHSS)	5%
Disability, Old Age, Death	3.5%	Capped at a maximum salary of HNL 11,903.13
Pension (RAP)	1.5%	Paid above specific salary thresholds (HNL 10,282.37 for companies with 10 or more employees; 9,197.99 for Maquiladoras or companies with fewer than 10 employees)
Labor Coverage Insurance	4%	Capped at three times the highest applicable minimum wage.
Collective Capitalization Pillar	2.6%
Total	16.6%

Statutory benefits

The key statutory benefit for overseas employers to understand is the 13th and 14th month bonuses.

These mandatory bonuses, paid in June and December, are both equal to one month’s pay.

So, when calculating the cost of a Honduran employee’s wages, a business owner should consider these two extra months of pay (an additional 14.29% of their base annual salary).

Employees are entitled to paid annual leave after a year of service, and the number of days increases with their tenure.

• 1 year of service: 10 days
• 2 years of service: 12 days
• 3 years of service: 15 days
• 4+ years of service: 20 days

They receive 26 weeks of sick leave, paid at 66% of their regular wage. This is covered equally by the employer and the social security system.

Honduran women receive 10 weeks of maternity leave, paid at 100% of their regular wage. This is typically split into four weeks before childbirth and six weeks after. It’s also covered equally by the employer and social security. There are no paternity leave laws in Honduras.

On top of that, Article 95(5) of the Honduras Labor Code mandates employers to grant paid leave in the following cases:

• Public obligations imposed by law, such as court summons.
• Cases of serious domestic hardship, such as an immediate family member passing away or being seriously ill.
• Attending a co-worker’s funeral.
• Performing duties for a worker’s union.

However, employers are only legally obligated to grant up to two days per month or 15 days per calendar year for these reasons.

Employment Cost Calculator

Use our Employment Cost Calculator to estimate the cost of hiring employees in Honduras.

What it’s really like hiring in Honduras

Market condition	What an employer needs to know
Talent availability	While there is a large talent pool in Honduras, there is a shortage of skilled workers in key industries.
Top-paying sectors	Tech.
Skills shortages	Many key industries in Honduras are suffering from a shortage of skilled workers.
Key employer challenge	Finding skilled workers to fit their most important positions.

The Honduran workforce is full of hard-working individuals willing to go above and beyond for their employer, and for a relatively low wage compared to other Latin American nations.

While English proficiency is lower than in neighbouring countries, there are plenty of English speakers in the main cities.

The hiring process is uncomplicated and will typically be completed within two to three days. No pre-employment medical exam is required here, unlike in other Latin American nations.

Honduras has strict limits on employing expats

It can be tough for employers in Honduras to find skilled local workers to fill their top roles, partly because many are looking for higher-paying jobs overseas.

While many nations would look to fill this skills gap with increased immigration, Honduras has strict regulations which make that very difficult.

Its Labor Code (Article 11) clearly states that at least 90% of its workforce must be Honduran employees, and that at least 85% of the payroll must go to these local workers.

While there are some loopholes that allow companies to temporarily exceed these limits, the work permit process in Honduras makes this impractical. Work permits can take up to 16 months to be processed.

Compliance risks that employers must know about in Honduras

Honduran minimum wage rules differ when using an EOR

In Honduras, the minimum wage is set according to the employer’s economic activity and headcount bracket. Under an EOR arrangement, the EOR entity is the legal employer, so its classification and total local headcount are what count.

The same applies to other employment laws, such as the 90% Honduran-national workforce requirement, so it’s advisable to ask your EOR where they stand on these measures.

Honduran overtime calculations are more complicated than elsewhere

The standard workweek in Honduras is eight hours per day or 44 hours per week for daytime shifts (05:00 - 19:00).

It is six working hours per day or 36 hours per week for nighttime shifts (19:00 - 05:00).

For workweeks with a mix of day and night shifts, the standard week is 42 hours. Any shift with at least three nighttime hours is considered a night shift.

Honduran employees are entitled to 125% of their standard hourly rate when they work night shifts within these limits.

(Unless explicitly stated in their employment contract, an employee’s standard hourly rate is calculated by dividing their weekly wage by 48.)

If an employee works any hours outside of these daily or weekly limits, they are entitled to overtime pay as follows:

• 125% of their standard hourly rate, when daytime shifts are extended with extra daytime hours.
• 150% of their standard hourly rate, when daytime shifts are extended with nighttime hours.
• 175% of their standard hourly rate, when nighttime shifts are extended.

If an employee works on a national holiday, they must receive 200% of their standard hourly rate.

Dismissing Honduran employees is rarely simple

If you wish to dismiss an employee outside of their probation period, you will have to give written notice and make a severance payment, unless you can establish ‘just cause’ for their contract termination.

Length of Service	Required Notice Period
Less than 3 months	24 hours
3 - 6 months	1 week
6 - 12 months to 1 year	2 weeks
1 - 2 years	1 month
2 years or more	2 months

As in most of Latin America, the definition of ‘just cause’ in Honduras only includes serious breaches of contract.

Perhaps an employee stole from the workplace, caused criminal damage or stopped turning up to work, for example. In these cases, you could dismiss them immediately without future pay.

However, it’s hard to dismiss someone simply for poor performance without paying severance.

Length of Service	Required Severance Pay
3 - 6 months	10 days' wages
6 - 12 months	20 days' wages
More than 12 months	1 month's wages for each year of service

Benefits of hiring employees through an EOR in Honduras

The cost and hassle of setting up a new business entity in Honduras puts many foreign business owners off hiring there.

However, an EOR like Rivermate helps this arrangement to make financial sense.

At Rivermate, we help employers by:

• providing a local business entity in Honduras.
• handling all administrative aspects of running a Chinese business, including payroll, taxes, benefits and employee terminations.
• ensuring they remain compliant with all aspects of Honduran employment and labor laws.

This way, businesses get all the advantages of hiring in Honduras without the headaches involved with setting up their own entity.

Ready to hire in Honduras?

Hiring in Honduras requires more than finding the best person for the job. From managing payroll, taxes and benefits to ensuring full compliance with local employment law, Rivermate handles all the administration so you can hire with confidence.

Talk to a Honduras Hiring Expert

Sources:
1. https://www.worlddata.info/america/honduras/index.php
2. https://taxsummaries.pwc.com/honduras/individual/taxes-on-personal-income

3. https://leyes.hn/salario-minimo
4. https://leyes.hn/codigo/trabajo-de-honduras
5. https://www.internations.org/honduras-expats/guide/working-short
6. https://www.paylab.com/hn/salaries-in-country