Employer Cost Calculator for El Salvador
The calculator
Cost to the employer a year
—
Figures checked November 2026. A guide only, not tax, legal or financial advice.
Sources for the calculator
- PwC Worldwide Tax Summaries: El Salvador, other taxes
- Decree 893 of 2023: Law of the Training Institute INCAF, replacing INSAFORP (PDF, in Spanish)
- Asamblea Legislativa: Labour Code (PDF, in Spanish)
- Deloitte: scope of the Special Quincena 25 Law (in Spanish)
- Consortium Legal: Special Law Quincena 25 in El Salvador
- Executive Decree 11 of 2025: minimum wages from 1 June 2025 (PDF, in Spanish)
How the calculation works
| Cost | Rule |
|---|---|
| ISSS | 7.5% of salary, on no more than $1,000 a month |
| AFP | 8.75% of the whole salary |
| INCAF training levy | 1% of payroll for employers with 10 or more workers (0.25% for permanent farm staff) |
| Aguinaldo | 15, 19 or 21 days of salary after 1, 3 or 10 years; in proportion in the first year |
| Paid holiday | 15 days a year, paid at the salary plus 30% |
| Quincena 25 | 50% of the monthly salary in January for staff earning up to $1,500; voluntary in 2026, mandatory from 2027 |
Source: PwC Worldwide Tax Summaries: El Salvador, other taxes; Decree 893 of 2023: Law of the Training Institute INCAF, which replaced INSAFORP (ILO NATLEX, PDF, in Spanish); Legislative Assembly: Labour Code (PDF, in Spanish); Deloitte: scope of the Special Quincena 25 Law; Consortium Legal: Special Law Quincena 25 in El Salvador, January 20261,2,3,4,5
INCAF, the training institute created by Decree 893 of November 2023, replaced INSAFORP and collects the same levy. A day of salary is the monthly salary divided by 30. Private employers who paid Quincena 25 voluntarily in January 2026 can credit the full amount against their 2026 income tax.2,4
The minimum wage for commerce, services and industry is $408.80 a month.6
Worked example
| Salary of $1,000 a month, 1 to 3 years | A year |
|---|---|
| Gross salary | $12,000.00 |
| ISSS 7.5% | $900.00 |
| AFP 8.75% | $1,050.00 |
| INCAF 1% | $120.00 |
| Aguinaldo, 15 days | $500.00 |
| Holiday bonus, 30% of 15 days | $150.00 |
| Quincena 25 | $500.00 |
| Total cost | $15,220.00 |
Source: PwC Worldwide Tax Summaries: El Salvador, other taxes; Decree 893 of 2023: Law of the Training Institute INCAF, which replaced INSAFORP (ILO NATLEX, PDF, in Spanish); Legislative Assembly: Labour Code (PDF, in Spanish); Deloitte: scope of the Special Quincena 25 Law1,2,3,4
That is 26.8% on top of the gross salary, or about $1,268 a month.
Sources
- PwC Worldwide Tax Summaries: El Salvador, other taxes
- Decree 893 of 2023: Law of the Training Institute INCAF, which replaced INSAFORP (ILO NATLEX, PDF, in Spanish)
- Legislative Assembly: Labour Code (PDF, in Spanish)
- Deloitte: scope of the Special Quincena 25 Law (in Spanish)
- Consortium Legal: Special Law Quincena 25 in El Salvador, January 2026
- Executive Decree 11 of 2025: minimum wages from 1 June 2025 (Judicial Documentation Centre, PDF, in Spanish)
Figures checked 9 November 2026. Prepared by InvestSalvador.com for general information. Not tax, legal or financial advice.