Hire Employees in Honduras

Two routes exist. Registering a Honduran entity gives you direct employment and permit sponsorship, and requires enrolment with the IHSS, the RAP and INFOP. Budget one to two months.

An Employer of Record removes that lead time. The EOR is the legal employer in Honduras, runs payroll, remits IHSS and both RAP streams, pays the INFOP levy and withholds ISR, while day-to-day direction stays with you.

Engaging someone as a contractor is a third option, but only where the work is independent, see the risk check further down this page.

Honduras is the only market in this dataset where the minimum wage itself scales with company size. Firms with one to ten workers face a floor of L 12,300 a month; that rises to L 12,900 at eleven to fifty, L 15,300 at fifty-one to a hundred and fifty, and L 17,300 above that. Growing past a threshold raises the wage floor for the whole payroll, not just new hires.

Two annual bonuses are mandatory, the décimo tercero in December and the décimo cuarto by 30 June, so deferred pay adds roughly 16.7% before any contribution is counted.

Break-even rule of thumb: EOR fees begin to exceed the running cost of a small Honduran entity somewhere between 15 and 20 employees. Model both before committing, see EOR vs Entity for the full comparison.

The IHSS employer contribution is 8.5%, not 5%. It covers sickness and maternity, invalidity, old age and death, and occupational risk. The employee pays 5%. 2.5% to each of the two main regimes. Several current guides publish 2.5% employee and 5% employer, which describes the sickness and maternity regime alone and omits the pension side entirely.

The 2026 ceiling is L 11,903.13 a month under Decreto 48-2024, confirmed in the RAP 2026 communiqué. A widely used calculator still applies L 11,290.18, which is the 2025 figure, and older guidance quotes separate bases of L 7,000 and L 8,882.30 that have long been superseded.

The 2024 reform split the RAP into two obligations that behave completely differently. The Ley del Fondo de Reserva Laboral, published 28 May 2024, created a labour reserve fund at 4% of ordinary salary, employer-only, capped at L 57,896.16 a month for 2026. Separately, the housing and financial inclusion contribution is 1.5% from each side, but calculated only on the portion of salary exceeding the L 11,903.13 ceiling.

That second calculation is where published guidance fails. One current payroll guide states plainly that the RAP has no ceiling and is calculated on the whole salary, and works an example at L 20,000 × 1.5% = L 300. The correct figure is 1.5% of the L 8,096.87 excess, or L 121.45, the published version overstates the deduction by roughly two and a half times.

INFOP adds a further 1% employer training levy. One payroll provider reports the RAP employer contribution as obligatory only at ten or more employees and voluntary below that; confirm the threshold for your headcount with the RAP.

Gross monthly salaries for full-time roles in Tegucigalpa and San Pedro Sula. Add contributions plus both annual bonuses and the cesantía reserve.

Benchmarks below are gross monthly salaries in lempiras for full-time roles in Tegucigalpa and San Pedro Sula. Add contributions plus provisions for both annual bonuses and the cesantía reserve, the all-in figure runs well above 30% of gross.

Payroll is commonly paid twice monthly. IHSS and RAP are deducted from gross before ISR is projected, which is standard Honduran payroll practice, though the SAR’s official monthly calculation contemplates only the L 40,000 annual medical expenses deduction, so a company’s withholding can differ slightly from a generic calculator.

ISR is projected across the year using the SAR comunicado 02-2026 table, with net taxable income up to L 228,324.32 exempt.

Both annual bonuses sit outside the contribution base. The décimo tercero and décimo cuarto do not attract IHSS or RAP, and are exempt from ISR up to ten average minimum wages. They are ordinary salary for no other purpose.

Employees must be registered with the IHSS within the first five days of hiring. An employer that deducts the employee share without remitting it faces fines, surcharges and an obligation to pay the contributions retroactively with interest, and the practice is common enough that employees are advised to check their contribution history directly with the IHSS.

ISR is withheld on a projected annual basis using the SAR table. IHSS and RAP deductions reduce the base in standard payroll practice, and a L 40,000 annual medical expenses deduction applies.

The Código de Trabajo is the governing statute, supported by the Ley del Sistema de Protección Social and the Ley del Fondo de Reserva Laboral.

The standard working week is 44 hours. Annual leave runs from 10 to 20 days depending on length of service.

Minimum wages are set by company size and sector under SETRASS-109-2024, with a tripartite commission negotiating the current adjustment against 2025 inflation of 4.98%. Confirm the applicable band before making an offer, since the figures in force may have moved.

A broader reform is in prospect: the draft Ley del Sistema Integral de Protección Social would raise the IVM employer rate to 3.75% and the worker rate to 1.75%, add a 0.5% state contribution, and either eliminate the contribution ceilings or raise them substantially. It remains a draft, but a multi-year cost model should carry it as a scenario.

Written contracts are the norm and should record pay, hours, leave and termination terms.

Register the employee with the IHSS within five days of hiring. That deadline is short and runs from engagement rather than from the first payroll.

Because the minimum wage band depends on total headcount, check the applicable floor at the point of hiring rather than carrying forward the figure used for an earlier employee.

The standard week is 44 hours. Overtime and work on rest days and public holidays attract premium rates under the Código de Trabajo.

Employees are entitled to weekly rest and to statutory daily breaks.

Sector practice in maquila and BPO frequently improves on the statutory position, so market terms should be checked alongside the legal minimum.

Honduras observes 11 public holidays in 2026, including the Semana Morazánica block in early October when several holidays are consolidated.

Honduras observes 11 paid public holidays in 2026, including the Semana Morazánica block in October. Dates that fall at a weekend and any substitution rules are set out below; entitlement is separate from annual leave.

Maternity care, prenatal attention and a maternity subsidy are provided through the IHSS for affiliated workers.

The IHSS also pays a subsidy during certified temporary incapacity, covering part of salary for the duration.

Cover depends on the employer actually remitting. Where contributions are deducted but not reported, employees can lose access to medical services entirely, and the employer is exposed to civil claims as well as IHSS penalties.

Cesantía is one month of salary for each year of service under article 120, and there is no cap on the number of years. That is unusual, most markets cap the multiplier or the base, and it makes long-tenured staff progressively expensive to release.

Preaviso of up to one month applies under article 116, and both are payable on dismissal without justified cause. The calculation runs through the so-called eighteenth system used in Honduran practice.

The RAP labour reserve fund partly pre-funds this exposure. The 4% employer contribution is paid to the worker on any termination, dismissal with or without cause, and voluntary resignation alike, so it functions as a portable individual reserve rather than a contingency the employer meets from cash.

Final pay includes proportional bonuses and accrued leave.

Foreign nationals need a work authorisation and residence permit, both employer-sponsored.

CA-4 arrangements ease movement for nationals of Guatemala, El Salvador and Nicaragua, though work authorisation is still required.

Foreign employees are registered with the IHSS and RAP on the same basis as nationals.

Calculating RAP housing on full salary is the most consequential published error. It applies only to the portion of salary exceeding the L 11,903.13 ceiling. A current guide states the opposite explicitly and works an example that overstates the deduction by roughly two and a half times.

The IHSS employer rate is 8.5%, not 5%. Guides publishing 5% are describing the sickness and maternity regime alone and omitting pensions and occupational risk.

The 2026 ceiling is L 11,903.13. Calculators still applying L 11,290.18 are using the 2025 figure, and older material citing L 7,000 or L 8,882.30 bases is long superseded.

Note also that the minimum wage rises with headcount so crossing a size band lifts the floor for everyone, that cesantía has no cap on years of service, and that an employee concluding contracts locally can create a taxable presence for a foreign entity.

Work backwards from the start date. For a local hire through an EOR, two to three weeks is realistic once identity documents, the signed contract and IHSS registration are in hand.

Register with the IHSS within five days of hiring and confirm the applicable minimum wage band for your current headcount, since the floor moves with company size.

Configure the two RAP streams separately. 4% employer on ordinary salary to the labour reserve, and 1.5% each side only on the excess above the IHSS ceiling, and provision both annual bonuses and the cesantía reserve monthly.