Establishing and maintaining a Honduras payroll
If you are planning a Honduran expansion, one of your first steps will be hiring a local workforce. To do this you will generally need a legal entity in the country and will need to establish an in-country payroll and employment infrastructure. This can be a long and difficult process in many cases, taking several months to complete and causing delays.
Many organizations choose to outsource this difficult phase, bypassing the administration to focus on the real work of expanding in Honduras. At Horizons, we offer full Honduras payroll outsourcing services for organizations expanding into the country, whether you have already registered a legal entity in Honduras or not.
Why choose the Horizons payroll solution?
If you have an entity
If your organization has already registered an official entity in Honduras, then you can outsource your payroll setup and management to us to get expert support and to fast-track your operations.
This level of outsourcing is perfect for larger organizations that are looking to expand into Honduras long term.
If you don’t have an entity
For organizations that have not established an entity in Honduras, we can offer a more comprehensive payroll outsourcing service using our Honduras subsidiary to act as employer of record, while also taking care of HR, contracts, legal compliance, and more.
This flexible service helps you to achieve all the key benefits of hiring locally in Honduras with the ability to scale rapidly and a reduced level of risk.
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Honduras payroll guide
What withholdings and taxes are required in Honduras?
Employers in Honduras must make contributions to both the country’s social security scheme and unemployment fund at a rate of 3.5% and 4% of salary respectively.
Income tax in Honduras is progressive, with rates ranging from 0% to 25% depending on income level.
Entitlements and terminations
The length of mandatory notice of termination for employees in Honduras depends on their length of service. For employees with less than two months of service, notice of just 24 hours is required. This gradually increases up to two months of notice.
Severance payments may also be necessary and also vary depending on the employees’ length of service, ranging from ten days of salary up to one month of pay per year of service.
How to establish payroll in Honduras
For many businesses, setting up payroll and hiring in Honduras is likely to involve establishing a local entity, registering with the authorities, opening a bank account, and more. This can be complex and slow expansion progress significantly.
Alternatively, you can choose to outsource the setup and administration of your Honduras payroll to a global PEO. At Horizons, we provide extensive payroll support for Honduras, helping you avoid the hassle of navigating the country’s complex legal framework.
Manage payroll in Honduras
Whether it’s EOR service or just payroll management, Horizons’ employment experts can help you get started in 24h.
