Definitive Guide to Hiring in Aruba

Hiring in Aruba

Hiring employees compliantly in Aruba means doing it yourself or using an Employer of Record like Global Expansion. You should be careful using independent contractor agreements in Aruba so that you don’t run afoul of employment laws. To hire an employee compliantly and offer them mandatory benefits and compliant agreements, you can:

(a) Establish your own new legal entity, banking, accounting and payroll service in Aruba; or

(b) use an Employer of Record like Global Expansion who can handle all of the details for you.

Labor Laws in Aruba

Employment laws in Aruba are uniquely suited to the country’s way of life, and crucial to understand if you want to employ local talent in this country. Get the details on Aruba employment laws and Aruba policies here.

Employee Probation Period

• This trial period must be agreed to in writing and may not exceed two months; any stipulation to the contrary is null and void.

Annual Leave in Aruba

• This trial period must be agreed to in writing and may not exceed two months; any stipulation to the contrary is null and void.

Holidays in Aruba

Aruba celebrates nine national public holidays as well as additional public holidays that vary by state:

Maternity Leave Aruba

• An employee is entitled to 12 weeks of paid maternity leave
• The employee can divide the leave into 4 to 6 weeks before giving birth and the rest of the 12 weeks after childbirth

Paternity Leave Aruba

• There is no paternity leave

Sick Leave in Aruba

• An employee is entitled to a maximum of 2 years of sick leave compensated at 80% of salary from the 4th day of sickness

Working Hours in Aruba

• The normal working hours are 8.5 hours/day and 42.5 hours/week for a 5 day workweek.
• The normal working hours are 8 hours/day and 40 hours/week for a 6 day workweek.
  
  

Overtime in Aruba

• In the event the employer requires its employees to work overtime, an overtime permit has to be obtained.  
• After obtaining the permit an employee is allowed to work longer hours, in which event the employer is obliged to pay the employee overtime.
• The overtime percentages to be paid are as follows:
  • after working hours: 150% (working hours are: the regular working hours of the employee during that day);
  • during the employee’s break: 150%;
  • during the half day of rest: 150% (after January 1, 2014: 175%);
  • during the full day of rest: 200%;
  • during a public holiday or a remembrance day: 200% (after January 1, 2014: 250%);

Termination of Employment in Aruba

Generally, an employment contract can be terminated in the following ways:

• Termination by giving notice, in which event the prior approval from the Director of the Department of Labor and Research (Directie Arbeid en Onderzoek) has to be obtained pursuant to the Ordinance on Termination of Employment Agreements 
• Without such consent any termination by giving notice will be considered null and void;
• Termination by mutual consent
• Dissolution of the employment agreement by the Court of First Instance of Aruba;
• Immediate termination of the employment agreement, which is only allowed if there is an urgent reason, justifying an immediate termination. Such urgent reason and the immediate termination would immediately have to be informed to the employee.
• The mandatory notice period to be taken into by an employer is:
• In case of an employment of less than five years: one month
• In case the employee has been employed more than five but less than ten years: two months
• In case the employment has lasted longer than ten years but less than fifteen years: three months
• In case the employment has lasted more than fifteen years: four months.
• Employees will receive:
  • 1 week pay per each year between two and 10 years of service
  • 1.25 week pay per each year between 11 and 20 years of service
  • 2 weeks' pay for each year of services above 20 years.

Notice Period in Aruba

• The mandatory notice period to be taken into by an employer is:
  • In case of an employment of less than five years: one month
  • In case the employee has been employed more than five but less than ten years: two months
  • In case the employment has lasted longer than ten years but less than fifteen years: three months
  • In case the employment has lasted more than fifteen years: four months.

Aruba Salary and Wages

• The employer is required to make pay related social insurance payments on behalf of its employees
• Employed and self-employed individuals are required to make social insurance payments, with a capped amount based on the individual’s salary
• Aruba has six (6) different social security taxes, 
  
  1. Old age pension and widow & orphans pension insurance, 
  2. Mandatory Pension for employees, 
  3. General health insurance, 
  4. Sickness insurance, 
  5. Accident insurance and 
  6. Cessantia.

• Some of the contribution rates are given below

Immigration Aruba

• A work- and residence permit to work in Aruba on a paid basis requires a labor market review. 
• It is required that you work for only one Aruban employer in a specified job title.
• You must apply for this labor market test at the DPL. 
• After receiving a statement from DPL, you can apply to DIMAS for your residence permit application. 
• DIMAS then tests your admission requirements.
• There is no need for labor market testing for resident domestic staff. 
• There are still more cases where you are entitled to exemption, and no labor market testing is required. 
• Individuals should check with the DPL to determine whether they are eligible for exemption.

Value Added Tax (VAT) in Aruba

• Turnover tax is levied on the sale of goods and the provision of services
• The standard turnover tax rate is 1.5%
• Exemptions are available

Payments And Invoicing

• The deadline for filing the income tax return is within two months after receiving the invitation for filing the tax return.
• If no invitation has been received from the Tax Inspector within 6 months after the calendar year, the taxpayer has the obligation to request for the issuance of the tax return within 15 days after this period (ultimately by July 15).
• In principle the calendar year end, unless the tax payer requests a different tax year. 
• Resident taxpayers have to file an income tax return based on their worldwide income. 
• Non-resident taxpayers need to file an income tax return for certain Aruba source income (e.g. income related to real estate in Aruba, income generated through employment in Aruba, etc.)
• Joint filing is permitted

Payroll Accrual in Aruba

Country Accruals Additional Information

Payroll Accruals Additional Information

Accrued Benefits in Aruba

Why use Global Expansion to hire in Aruba

Establishing a branch office or subsidiary in Aruba can be time-consuming, expensive and complex. With such a robust labor market in place, one must pay great attention to detail when structuring employment because Arubian labor laws are complex.

The company also has a responsibility to comply with specific employment practices dictated by Arubian law to maintain its good standing as an equal opportunity employer.

Global Expansion makes it easy for you to expand into Aruba. We'll help you hire your candidate of choice, handle HR matters and payroll, and ensure that you comply with local laws without the burden of setting up a foreign branch office or subsidiary. In addition, you'll have complete control and direction over your employees.

We enable you to stay in control of everything. Our Arubian Global Professional Employer Organization (PEO) and Employer of Record (EOR) solution provides you with peace of mind to focus on running your company and the security to enter new markets.