Guatemala Employment Guide

Guatemala, located in Central America, is known for its rich Mayan heritage, volcanic landscapes, and coffee production. With a population of approximately 18 million, its economy is driven by agriculture, manufacturing, and services. Employment in Guatemala is governed by the Labor Code, which outlines working hours, minimum wage, leave entitlements, and termination rules. Employment contracts are common, and employers must comply with social security, tax, and occupational safety regulations. The labor framework promotes fair treatment, anti-discrimination measures, and protection of workers’ rights.

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Currency

Guatemalan Quetzal (GTQ)

Capital

Guatemala City

Official language

Spanish

Salary Cycle

Monthly

Our Employment Guide in Guatemala

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Understanding Guatemala's Minimum Wage Structure

Guatemala's minimum wage is not uniform; it varies significantly by industry and economic zone. For non-agricultural employees in Guatemala City, the mandated minimum monthly wage is GTQ 3,634.59. This tiered approach aims to reflect the economic realities of different sectors.

Personal Income Tax Regulations

Employee income is subject to a progressive tax scale, with rates ranging from 5% to 7%. This system ensures a fair contribution based on an individual's earnings level.

Calculating Total Employment Costs

For international employers, understanding the total cost of employment is critical. Beyond the base salary, employers should budget for mandatory contributions, which typically amount to approximately 29.3% of the employee's gross salary. These statutory costs include:

Social Security (IGSS): 10.67%
Worker Recreation Institute (IRTRA): 1%
Technical Training Institute (INTECAP): 1%
13th Month Bonus (Aguinaldo): 8.33%
Christmas Bonus: 8.33%

Additionally, companies should account for one-time administrative fees, such as a registration fee of approximately $45 USD and a mandatory wet-ink employment agreement processing fee of around $80 USD. For precise calculations tailored to your specific situation, consulting with a global HR partner like SailGlobal is highly recommended.

Overtime and Standard Working Hours

The Guatemalan Labor Code defines a standard workday as 8 hours and a standard workweek as 40 hours, typically from Monday to Friday. However, it is common practice for the workweek to extend to 44 hours.

Overtime compensation is mandatory. Work performed beyond the standard hours is considered overtime, with a daily maximum of 4 overtime hours. The compensation rates are as follows:

150% of the regular hourly rate for standard overtime.
200% of the regular hourly rate, plus an additional day of rest, for work on official holidays, annual leave days, or regular rest days.

For example, a company requiring weekend work to meet a project deadline must apply the 200% rate and provide a compensatory day off.

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