Income Tax in El Salvador
Company rates
| Taxable income | Rate |
|---|---|
| USD 150,000 or less | 25% |
| Above USD 150,000 | 30% |
| Profits distributed to shareholders | 5% withheld on payment |
Source: Income Tax Law, consolidated to Official Gazette No. 79 of 30 April 2025 (General Directorate of Customs, PDF, in Spanish); PwC Worldwide Tax Summaries: El Salvador, taxes on corporate income1,2
Companies follow the accrual method. Taxable income is gross income less the costs and expenses needed to produce it and keep the source of income, and other deductions the law allows. Income subject to a final withholding is left out of the calculation.1,2
Figures checked November 2026. A guide only, not tax, legal or financial advice.
Sources for the calculator
- Executive Decree 10 of 30 April 2025: monthly income tax withholding tables (PDF, in Spanish)
- PwC Worldwide Tax Summaries: El Salvador, other taxes
- Income Tax Law, updated to D.O. 79 of 30 April 2025 (PDF, in Spanish)
- Asamblea Legislativa: Labour Code (PDF, in Spanish)
- Deloitte: scope of the Special Quincena 25 Law (in Spanish)
Figures checked November 2026. A guide only, not tax, legal or financial advice.
Sources for the calculator
Personal income tax for residents
| Annual taxable income | Tax |
|---|---|
| Up to USD 6,600 | Exempt |
| USD 6,600.01 to USD 9,142.86 | 10% on the excess, plus USD 212.12 |
| USD 9,142.87 to USD 22,857.14 | 20% on the excess, plus USD 720.00 |
| Above USD 22,857.14 | 30% on the excess, plus USD 3,462.86 |
Source: Income Tax Law, consolidated to Official Gazette No. 79 of 30 April 2025 (General Directorate of Customs, PDF, in Spanish)1
The bands are those of Article 37 of the Income Tax Law as amended by Legislative Decree No. 293 of 30 April 2025. Non-resident individuals pay a flat 30% on income from El Salvador.1,3
Withholding on salaries
| Monthly taxable pay | Withholding |
|---|---|
| Up to USD 550.00 | None |
| USD 550.01 to USD 895.24 | 10% on the excess over USD 550.00, plus USD 17.67 |
| USD 895.25 to USD 2,038.10 | 20% on the excess over USD 895.24, plus USD 60.00 |
| Above USD 2,038.10 | 30% on the excess over USD 2,038.10, plus USD 288.57 |
Source: Executive Decree No. 10 of 30 April 2025: income tax withholding tables (Judicial Documentation Centre, PDF, in Spanish)3
Employers withhold monthly under the tables of Executive Decree No. 10 of 30 April 2025 and recalculate the year’s withholding in December on an annual table.3
Deductions and losses
- Expenses needed to produce taxable income are deductible: salaries, rent, power, freight, insurance, marketing and interest on loans used in the business.
- Straight-line depreciation at up to 5% a year for buildings, 20% for machinery, 25% for vehicles and 50% for other movable assets. New software: 25%.
- Goodwill and trademark amortisation, taxes, fines and penalties are not deductible.
- Operating losses cannot be carried forward or back. Capital losses can be set against capital gains for five years.
- Donations are deductible up to 20% of net income.
Source: PwC Worldwide Tax Summaries: El Salvador, deductions5
Returns and payment
- The tax year runs from 1 January to 31 December.
- The annual return is filed by 30 April of the following year. Tax is paid with the return at a bank of the local financial system.
- Companies pay a monthly advance payment of 1.75% of gross revenue, credited against the annual tax.
- The Tax Administration can audit a return filed on time for three years, and for five years when a return is late or missing.
Source: PwC Worldwide Tax Summaries: El Salvador, tax administration4
Frequently Asked Questions
What is the income tax rate for companies in El Salvador?
Companies pay 30% on taxable income, or 25% when taxable income is USD 150,000 or less.
How much income is tax-free for individuals?
Resident individuals pay progressive rates up to 30%, with the first USD 6,600 a year exempt since the April 2025 reform. Non-resident individuals pay 30%.
When is the annual income tax return due?
The annual return is due by 30 April.
Sources
- Income Tax Law, consolidated to Official Gazette No. 79 of 30 April 2025 (General Directorate of Customs, PDF, in Spanish)
- PwC Worldwide Tax Summaries: El Salvador, taxes on corporate income
- Executive Decree No. 10 of 30 April 2025: income tax withholding tables (Judicial Documentation Centre, PDF, in Spanish)
- PwC Worldwide Tax Summaries: El Salvador, tax administration
- PwC Worldwide Tax Summaries: El Salvador, deductions
Figures checked 8 November 2026. Prepared by InvestSalvador.com for general information. It is not investment, tax or legal advice; please confirm details with a qualified adviser before acting.
