Employer of Record in Honduras

An Employer of Record (EOR) in Honduras is a company that legally hires employees on your behalf. This means you can build a team in Honduras without setting up a local entity. The EOR takes care of all the legal and HR responsibilities that come with employment. Think of them as your local HR partner. They handle everything from payroll and taxes to benefits and compliance with Honduran labor laws. Using an EOR like Rivermate allows you to hire talent in Honduras quickly and compliantly.

How an Employer of Record (EOR) Works in Honduras

Using an EOR in Honduras simplifies the process of hiring employees. Here is how it generally works:

• You find the talent. You recruit and select the best candidate for your team in Honduras.
• The EOR hires them. The EOR legally employs the worker on your behalf through a local, compliant employment contract.
• They handle the paperwork. The EOR manages all the necessary documentation, ensuring everything meets Honduran labor regulations.
• Payroll is managed. The EOR processes payroll, making sure your employees are paid on time and accurately. This includes managing taxes and social security contributions.
• Benefits are administered. They provide your employees with statutory benefits as required by Honduran law.
• You manage your team. You direct the employee's day-to-day work and responsibilities, while the EOR handles the legal and administrative side of their employment.

Why use an Employer of Record in Honduras

Using an EOR in Honduras can be a smart move for your business. It allows you to tap into the local talent pool without the complexities of setting up a legal entity in the country. This saves you time and money.

Here are some of the key benefits:

• Faster market entry. You can hire employees and start operating in Honduras much faster than if you were to establish a local company.
• Reduced risk. EORs are experts in local labor laws, so they ensure you remain compliant with all regulations, minimizing your legal risks.
• Cost savings. Setting up and maintaining a legal entity in a new country can be expensive. An EOR eliminates these overhead costs.
• Focus on your business. With an EOR handling HR and administrative tasks, you can focus on your core business activities and managing your team.
• Access to expertise. You gain access to local HR and legal experts who can provide guidance on employment matters in Honduras.

Rivermate's transparent pricing model eliminates complexity with a single, competitive monthly fee per employee. Unlike traditional PEO providers, our pricing in Honduras includes comprehensive HR support, benefits administration, compliance management, and access to our proprietary dashboard for real-time workforce analytics. No hidden costs, no setup fees—just straightforward pricing that scales with your business needs while ensuring full legal compliance in Honduras.

Hiring in Honduras comes with its own set of rules. The main source for these regulations is the country's Labor Code. This law covers everything from work contracts to wages and termination. If you're looking to hire here, you'll find a workforce with a strong agricultural background and a growing service sector. It's important to know that the law favors employees in many situations. For example, at least 90 percent of your workforce must be Honduran nationals.

Employment contracts & must-have clauses

When you hire an employee in Honduras for more than 60 days, you need a written contract. You can create fixed-term or indefinite-term contracts.

Make sure every contract includes:

• Full names and personal details of both you and the employee
• A clear description of the job and its responsibilities
• The start date of employment
• Where the work will take place
• Work hours and schedule
• Compensation and benefits details
• Termination procedures

All salary and compensation amounts must be in Honduran lempira.

Probation periods

You can include a probation period in the employment contract. This period allows both you and the new hire to see if the job is a good fit.

The maximum length for a probation period is 60 days. During this time, either you or the employee can end the employment relationship without needing to provide a reason. The probation period must be clearly stated in the written contract to be valid.

Working hours & overtime

The standard workweek in Honduras is structured to protect employees from overwork.

Any work done beyond these standard hours is overtime. Overtime pay is calculated as a percentage of the regular wage. For work on a rest day or public holiday, the overtime rate is 200% of the regular pay.

Public & regional holidays

Your employees in Honduras are entitled to paid time off for national holidays.

Some of the main public holidays include:

• New Year's Day (January 1)
• Holy Week (March or April)
• Americas Day (April 14)
• Labour Day (May 1)
• Independence Day (September 15)
• Francisco Morazán's Day (October 3)
• Discovery of America Day (October 12)
• Army Day (October 21)
• Christmas Day (December 25)

Some holidays may be moved to create long weekends to promote tourism. There are also regional and cultural celebrations that might affect work schedules in specific areas.

Hiring contractors in Honduras

You can hire independent contractors for specific projects or temporary needs. This offers flexibility and can be cost-effective since you don't have to pay for employee benefits like paid leave or social security.

However, you must classify workers correctly. The key difference between an employee and a contractor is control. If you control their working hours and methods, and they can't work for other clients, they are likely an employee in the eyes of the law.

Misclassifying an employee as a contractor can lead to serious penalties. You could face fines and be required to pay back wages, benefits, and social security contributions. An Employer of Record (EOR) can help you avoid these risks. We hire employees on your behalf, ensuring full compliance with local labor laws. This way, you can build your team in Honduras without the legal headaches.

Understanding compensation and payroll in Honduras is straightforward. The system has clear rules for pay, hours, and taxes. You'll find that many practices are standard, but there are some unique aspects to keep in mind. For example, all employees are entitled to 13th and 14th month bonuses, which are paid in December and July. This guide will walk you through the key elements of Honduran payroll.

Payroll cycles & wage structure

You can pay your employees in Honduras on a monthly, bi-monthly, weekly, daily, or even hourly basis. The choice is yours and should be stated in the employment contract.

The wage structure in Honduras is built around a minimum wage that changes based on two factors:

• Industry: The minimum wage is different for sectors like agriculture, manufacturing, and construction.
• Company Size: The number of employees in your company also affects the minimum wage you must pay.

For example, in the manufacturing sector, a company with 1-10 workers has a different minimum wage than a company with over 151 workers.

Overtime & minimums

The standard work week in Honduras is 44 hours, with a maximum of 8 hours per day. Anything beyond this is considered overtime. Overtime is paid at a higher rate.

• Regular Overtime: 137.5% of the normal salary.
• Overtime on a Rest Day: 200% of the normal salary.
• Night Overtime: There is an additional 25% premium for overtime worked at night.

Minimum wage in Honduras is not a single flat rate. It varies by industry and the number of employees. For example, in 2025, the monthly minimum wage for a company with 1 to 10 workers is L 12,191.70, while for a company with 151 or more employees, it is L 12,910.90.

Employer taxes and contributions

As an employer in Honduras, you are responsible for several payroll contributions. These are calculated as a percentage of the employee's salary.

Employee taxes and deductions

Employees in Honduras also contribute to social security and pay income tax. These deductions are taken directly from their salary.

In Honduras, your employee benefits package is a mix of legal requirements and company perks. The law sets the minimum for things like paid time off and social security contributions. These aren't just suggestions; they are mandatory. Understanding these rules is the first step to hiring talent in the country. Many companies choose to offer more than the minimum to attract and keep the best people.

Statutory leave

Honduran law provides several types of paid leave for employees.

• Annual Leave: Your employees get paid vacation time based on how long they've worked for you. The amount of leave increases over time.
  • 1 year of service: 10 days
  • 2 years of service: 12 days
  • 3 years of service: 15 days
  • 4+ years of service: 20 days
• Sick Leave: Employees can take paid sick leave for up to 26 weeks, which can be extended. Pay during this time is a percentage of the employee's regular salary and is shared between you and the social security system.
• Maternity Leave: New mothers receive 10 weeks of fully paid maternity leave, typically split before and after childbirth. This cost is also shared between the employer and social security. There are no laws for paternity leave in Honduras.
• Other Paid Leave: The law also requires you to provide paid time off for specific life events.
  • Marriage: 5 consecutive days.
  • Bereavement: Up to 3 days for the death of an immediate family member.
  • Union Duties: Up to 6 days.
  • Court Summons: Half a day.

Public holidays & regional holidays

Your employees are entitled to paid time off for national public holidays. If an employee works on a public holiday, you must pay them at a premium rate.

Typical supplemental benefits

Beyond the legally required benefits, many companies offer extra perks to stay competitive. Here’s a look at what is required versus what is commonly offered as an additional benefit.

How an EOR can help with setting up benefits

Setting up and managing employee benefits in a new country can be complex. An Employer of Record (EOR) simplifies this process for you.

An EOR acts as the legal employer for your team in Honduras. We handle all the administrative tasks tied to employment. This means we:

• Ensure you comply with all local labor laws.
• Enroll your employees in the mandatory social security system.
• Administer both statutory and supplemental benefits.
• Process payroll accurately, including the 13th and 14th-month bonuses.
• Manage all types of employee leave according to the law.

Using an EOR allows you to offer competitive benefits packages without needing to become an expert in Honduran employment regulations. You can focus on your business goals while we take care of the HR details.

Ending a working relationship is a sensitive process, and in Honduras, it's governed by specific labor laws. You need to understand these rules to ensure a smooth and compliant offboarding for your employees. Failing to follow the legal process can lead to financial penalties and legal trouble. This guide breaks down the key aspects of termination and offboarding in Honduras.

Notice Periods

When you terminate an employment contract without just cause, you must provide the employee with written notice, known as "preaviso". The length of this notice period depends on how long the employee has worked for your company. If you don't provide notice, you have to pay the employee their salary for the corresponding notice period.

Here are the minimum notice periods required:

During the notice period, employees are entitled to one paid day off each week to look for a new job.

Severance Pay

In Honduras, severance pay is called "cesantía". It is a required payment for employees who are terminated without just cause after working for at least three continuous months. This payment is calculated based on the employee's average ordinary salary over the last six months.

The amount of severance pay is equal to one month's salary for each year of service. For periods of less than a year, the payment is proportional. The maximum amount of severance pay an employee can receive is capped at 25 months' salary.

It's important to know that if an employee is terminated for "just cause," you are generally not required to pay severance or provide a notice period. The Honduran Labor Code lists the specific reasons that qualify as just cause for termination.

How Rivermate Handles Compliant Exits

Navigating the details of Honduran labor law can be complex. We handle the entire offboarding process to make sure every termination is fully compliant.

Here’s how we help:

• Contract Review: We start by reviewing the employment contract to understand the specific terms of the agreement.
• Legal Compliance: Our team is familiar with Honduran labor laws, ensuring every step of the termination process follows the legal requirements.
• Documentation: We prepare and handle all necessary documentation, including the written termination notice.
• Severance Calculation: We accurately calculate any required severance pay based on the employee's service length and salary.
• Clear Communication: We facilitate clear communication between you and the employee to ensure a respectful and professional exit.

By partnering with us, you can manage employee terminations in Honduras with confidence, knowing that you are meeting all your legal obligations.

Navigating the visa and work permit process in Honduras can be complex. The path you take depends on your nationality, the type of work you will do, and how long you plan to stay. For any paid work, you will need the correct authorization from the Honduran government before you start. This process involves multiple steps and requires coordination with your employer.

Employment visas & sponsorship realities

To work in Honduras, you generally need a permit that allows for long-term stays and employment. The most common route is a Special Stay Permit or a Temporary Residence Permit. Your employer in Honduras must sponsor you and start the application process with the Ministry of Labor and Social Security.

An Employer of Record (EOR) can typically sponsor foreign workers for these permits, provided all requirements are met. The EOR acts as your legal employer in Honduras, handling the necessary paperwork and ensuring compliance with local labor laws.

Here are the typical requirements for a work visa:

• A valid passport
• Police clearance certificates from your home country.
• A recent medical certificate.
• An approved employment contract.
• Proof of your qualifications for the job.

The application process generally follows these steps:

1. You enter Honduras.
2. Your employer gets the employment contract approved by the Labor Ministry.
3. You receive approval for temporary residence.
4. You register with the authorities, provide fingerprints, and apply for a residence card.
5. You collect your approved residence card.

This entire process can take several weeks or even months, so it is important to plan ahead.

Business travel compliance

If you are visiting Honduras for short-term business activities, you may not need a formal work permit. Nationals from many countries can enter Honduras for up to 90 days without a visa for activities like attending meetings or conferences.

However, a business visit does not permit you to engage in paid work. For any actual employment, you must secure the proper work authorization. Honduras does not currently offer a specific visa for digital nomads, so remote workers often use a tourist visa for short stays of up to 90 days. If you plan to work remotely from Honduras for a longer period, you will need to apply for a temporary residence or work permit.