Employer Of Record in Guatemala

We make it easy and painless to expand your business into Guatemala. Forget about dealing with local regulations, confusing tax laws and international payroll management. We take care of all that so you don't have to.

Accelerate your growth into Guatemala Compliantly and hassle-free

At Serviap Global we handle all employee onboarding, payroll, compliance, risk, mitigation and benefits, so you can focus on what matters most – your business.

How we can help you expand in Guatemala

As your EOR in Guatemala we’d help you expand by hiring employees and running their payroll without establishing a local branch office or subsidiary. 

Your candidate is hired by a PEO in Guatemala provider in accordance with local labor laws and can be onboarded in days instead of the months it typically takes. Shortly after, your new employee will be working for you, just like any other member of your team. 

Expand to Guatemala with Serviap Global

Through our PEO and EOR services, you can hire qualified talent in your industry without the trouble of opening your own legal entity. 

In just a few days, you can easily and safely build a presence in Guatemala being sure that your staff will be hired in compliance with labor and tax regulations

Table of Contents

Quick Facts

Quetzal (GTQ)

Guatemala City

Payroll Cycle:


Guatemala Country Facts

Guatemala offers an exciting environment for companies exploring the opportunities tied to offshoring their work. Guatemala boasts a young workforce, many of whom speak English, have a strong interest in developing tech and IT sectors, and the country is conveniently located near North America (Central Time Zone). Its location with access to both the Atlantic and the Pacific makes it an attractive hub for global trade between Asia, North America, Europe, and other Central American countries.

The Economy

While Guatemala’s technology sector continues to develop, the rest of the market has a rich, diverse base and the largest economy in Central America. Another positive to this country is that taxation is a simple formula. 5% on the first 30,000 quetzals (GTQ) and 7% on all income over that level. GTQ 30,000 is around $3,750 USD. While an average turnover rate is unavailable for Guatemala, certain sectors show higher turnover rates, especially in the construction industry. However, these rates are not a matter of concern for most companies looking to offshore. Instead, they should be seen as signs that workers are looking for better opportunities, which offer a pathway to advancement and a table career.

The Importance of Small and Medium-Sized Companies

Guatemala also has a large pool of workers trained in the United States in technical fields like programming. So, in addition to having solid technical skills, they’re also better adapted to dealing with Americans in a business setting. While the country is still recovering from a long civil war (1960 to 1996) much of the economic recovery is focused on encouraging tech startups and leveraging graduates with domestic and foreign technology training.

Population Characteristics

There are 18.3 million people and 70% of them are under the age of 30. Making Guatemala the most populous country in Central America. Spanish is the official language of Guatemala however, most students who complete primary and secondary education in state-sponsored schools will have ten years of English classes under their belt. This exposure means that many people in Guatemala have a high degree of proficiency in English, even if they technically are not fluent.

Economic Opportunities

Guatemala offers an exciting environment for companies looking to offshore their work. With a high population of English speakers, a strong interest in developing its tech and IT sectors, and its convenient location relative to North America (including the Central Time Zone), Guatemala is ripe for further development.

Key Sectors of the National Economy

Human Talent
  • Tech Startups: Guatemala is home to several tech startup companies, and digital technology has grown by more than 8% in recent years.
  • Human Resources: In addition to an increasing number of graduates from Guatemala’s public and private universities, a significant number of citizens received a university education in the United States, giving Guatemala a solid base in technical training.
  • Focus on Support Development: The Guatemalan tech workforce provides both content and software development services. This mix makes it easy for companies looking to outsource to find qualified individuals to take on these tasks.
  • Manufacturing: Guatemala produces many goods for consumption, from chemicals and petroleum products to textiles and furniture.
  • Agriculture: The Guatemalan agricultural industry comprises mainly smaller farms with some medium- and large-scale operations. Agriculture employs roughly 50% of the workforce in Guatemala, making it a highly important part of the economy.
  • Service and Tourism: Tourism and services serve as Guatemala’s economic linchpin, making up nearly 60% of the Guatemalan economy. These services include hospitality, retail, healthcare, and other specialties.
  • Financial Services: A subset of the service economy, several foreign and national banking services are available in Guatemala.

Prominent Cities for Business

  • Guatemala City: The capital of Guatemala, this city is far and away the most important economic center in the country. The government focused many of the nation’s development efforts on improving the city, and it shows. Guatemala City is home to most of the country’s largest corporations.
  • Quetzaltenango: Also known as “Xela” to most Guatemalans, Quetzeltanango boasts a population of around 300,000. It is home to many of the most important universities in the country, and the population swells when classes are in session. It is an excellent source of fresh new talent.
  • Escuintla: One of Guatemala’s oldest cities, Escuintla is the nation’s largest agricultural center and is an important region for producing and packaging farmed goods.

Technological Ecosystem

Tech Graduates & Workforce Tech startups find success leveraging graduates with domestic and foreign technology training. Guatemala has a large pool of workers trained in the U.S. in technical fields like programming. This education means they have solid technical knowledge and are better adapted to dealing with Americans in a business setting.

Facilities for Foreign Investment

Guatemala does not assess taxes on income not derived from the country itself. That income includes numerous sources, such as:
  • Salary
  • Bonuses
  • Moving expenses
  • Paid leave
  • Domestic help paid for by an employer
  • Education allowances
  • Housing and other accommodations provided by an employer
To be considered to be a resident, a worker must live in Guatemala for at least 183 days out of the year.

Business Culture in Guatemala

Formal Guatemalans tend to be a conservative people who prefer formal etiquette and interactions. Titles are extremely important so use everyone’s proper title during business dealings and even into social gatherings. Snacking is Serious Lunch is the biggest meal of the day and afternoon snacks, called refracciones, are a set part of the meal schedule. Whereas dinner is a smaller meal, usually eaten around 8 p.m. Accountability It’s common for Guatemalan businesspeople to inform everyone around them that he or she is leaving, usually accompanied by a circular head motion.

Guatemala Gastronomy: Regional and Traditional Cuisines

Mainstays of the Guatemalan diet include corn, rice, beans, cheese, chicken, beef, and pork. Meat stews and soups, called caldos and sopas, are the most popular local cuisines.A hearty breakfast of eggs, tortillas, and beans is common, or for breakfast one may enjoy a mash of oats and milk. Lunch is large, the refracciones (afternoon snack) will include a small sandwich, tostada, tamal, or pastry.

General Highlights

CapitalGuatemala City
Num. States / Province22 provinces
    Principal Cities1.  Guatemala City 2.  Mixco 3.  Villa Nueva 4.  Quetzaltenango 5.  San Miguel Petapa
Local CurrencyQuetzal Exchange Rate 1 Quetzal =. $0.1292 US Dollar
Major ReligionCatholic
Date FormatDD/MM/YY
Thousands Separator Format999,999,999,.99
Country Dial Code+502
Time ZoneGMT-6
Border CountriesMexico, Belize, Honduras, El Salvador
Continental surface108.889 km²
Fiscal YearJanuary 1st to December 31st
VAT %12% all other taxable goods and services, including imports
Minimum WageGTQ 92.88 per day (approximately 12 USD)
Taxpayer Identification Number Name in the countryNIT
Current PresidentAlejandro Giammattei
What you need to know about employing personal in Guatemala

Key Tax and Labor Authorities

LawsBrief Description
Superintendencia de Admin- istracion TributariaThe tax office
Ministry of LaborSets labor codes employers must follow
IGSS – Social Security Insti- tuteThe equivalency to the US Social Security

Labor Contracts

Labor Code dictates employment contracts must be executed in writing, in Spanish, and a copy must be sent to the Labour Ministry.
  • Employment contract must contain provisions on all of the following:
  • Full name, age, sex, marital status, nationality and municipal residence of the parties
  • The date on which the labor relationship commenced
  • There should be a specific description of the services or the work to be executed
  • The place where the services or work are to be carried out
  • The employee’s address, if hired to work outside of the place where the employee usually resides
  • The employment contract’s duration, or an indication that it is for either an indefinite period or for a fixed term for specific work
  • The working hours and schedule of work
  • The remuneration and its method of calculation (by time unit, by work unit or other point of reference), and the form, period and place of payment
  • Other legal terms and conditions agreed to by the parties
  • The place and date where and when the employment contract is signed
  • The parties’ signatures (or a fingerprint, if they cannot sign), and their legal identification numbers (for Guatemalan nationals, this is their national identification number, and for foreign nationals, this is their passport number).


Salaries are paid monthly. Overtime is calculated at 1.5 of normal salary (time and a half). Guatemalan law specifies the same time and a half, 1.5 times normal salary, calculation for holiday pay.
Minimum Wage (Tax Office – Superintendencia de Administracion Tributaria)GTQ 92.88 per day (approximately $12 USD)
WagesWhile the average monthly salary in Guatemala City hovers around 4,200 quetzales (GTQ), or approximately $500 USD, that number varies throughout the country. In export factories throughout Guatemala, the average monthly income is around 2,800 GTQ, or $360 USD. However, certain jobs do pay more. Glassdoor suggests that the average salary for a software engineer in Guatemala is 8,500 GTQ per month, or $1100 USD. Still, this rate is significantly lower than what you would pay someone in the United States.
OvertimeCosta Rica is a part of the United Nations labor organization, and therefore fSalaries are paid monthly. Overtime is calculated at 1.5 of normal salary (time and a half). Guatemalan law specifies the same time and a half, 1.5 times normal salary, calculation.
Christmas BonusMandatory – Each bonus is equivalent to one month’s salary; paid at mid- year and year-end.
Incentive Bonus Decree 78- 89 of the Labor Code.The incentive bonus is a salary variable paid to workers for productivity and efficiency.
Vacations or PTO Article 130 of the Labor CodeEvery worker, without exception, is entitled to a period of paid vacation after each year of continuous work in the service of the same employer; with a minimum duration of 15 working days. An employee is entitled to paid leave of 15 consecutive days per year after completing 12 months of continuous employment with the same employer. The employee must have worked at least 150 days in the last year to be entitled to the leave. There is no provision in the law showing that the vacation premium increases with seniority.
Leaves of Absence Employees have the right to paid absences for the following things:Pre- and post-natal leave: Employees are entitled to 30 days off before delivery and 54 days off after delivery with the right to full pay. Adoption leave: Is 54 days with pay. Lactation period: For 10 months after childbirth employees are entitled to breastfeeding leave (even if not breastfeeding the employee is still entitled to time to feed the baby) Post-miscarriage leave: Employees get a 15-day break or until a doctor deems the employee fully recovered. Establishment of children’s centers or day-care centers: If the company has more than 30 female workers, the employer must provide a suitable place to leave children under 3 years of age during work hours. Sick leave.

Employers Contribution or Labor Cost

Annual Taxable Income In Guatemala, both residents and non-residents are subject to taxes on all income generated within the country. Corporate Tax Rates The only income that is subject to taxation is that generated by sources in Guatemala. Guatemala offers two different regimes for determining your tax rates based on net income or gross receipts. If you decide to tax your company based on net income, you will be subject to a 25% tax on all income, less passive income, ex- empt income, and income from foreign sources. This tax is due quarterly. Guatemala taxes resident companies, meaning they meet one of the following conditions:
  • The company is legally incorporated in Guatemala
  • The corporate headquarters or fiscal domicile is in Guatemala
  • A branch or extension of a foreign country operating in Guatemala
The optional gross receipts regime is intended to be a much simpler form of corporate taxation. All income from Guatemalan sources is taxed at a graduated rate.
Taxable Gross IncomeTax Rate
The first 30,000 GTQ5%
All income over that level7%

Types of Disabilities

About 1 in 10 Guatemalans has a disability. The Health and Hygiene Unit is in charge of hygiene and safety, to eliminate risks of accidents and occupational diseases in order to improve the environmental conditions in the Work Centers.

Public Holidays

The Labor Code provides for public holidays that are observed in X:
1 JanuaryNew Year’s Day
Thursday before Easter SundayMaundy Thursday
Friday before Easter SundayGood Friday
1 MayLabor Day
30 JuneArmy Day
15 SeptemberIndependece Day
20 OctoberRevolution Day
1 NovemberAll Saints’ Day
25 DecemberChristmas Day


Guatemala’s Labor Code outlines rules for termination of an employment contract
Justified DismissalThe Law establishes a legal procedure to terminate an employment relationship in the event of a justified direct dismissal, which is described below: •          The employer must prepare the evidence in order to demonstrate the cause or causes that justify the termination of the labor relationship. •          The employer must then communicate the dismissal in writing to the employee, stating the cause for the dismissal. •          The employee must effectively cease the performance of his work. t’s important to note: According to Article 259 of the Labor Code, the employer’s right to terminate an employment contract is twenty days.
Unjustified DismissalAny employee who is dismissed for an unjustified cause is entitled to indemnification and as damages, up to 12 months of salary for the time he/she has not received the indemnification. She/he is entitled to the payment of bonus, Christmas bonus and vacations proportional to the time of dismissal.
Voluntary resignationIf the employee decides to voluntarily leave the company for reasons beyond the employer’s control. This does not entitle the employee to indemnification, but it does entitle him/her to the payment of outstanding benefits and salaries.
Other forms of compensation upon termination include severance if the employee is terminated without just cause. And they have 30 days to make a claim to a court. If the employer is unable to justify the reason in court, the employee receives up to 12 months of severance pay but cannot return to their previous job.

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