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    Nicaragua 2022
    Day Date Holiday Notes
    Saturday Jan-1 New Year's Day
    Thursday Apr-14 Holy Thursday
    Friday Apr-15 Good Friday
    Sunday Apr-17 Easter
    Sunday May-1 Labor Day
    Tuesday Jul-19 Sandinista Revolution Day
    Wednesday Sep-14 Battle of San Jacinto
    Thursday Sep-15 Independence Day
    Thursday Dec-8 Feast of the Immaculate Conception
    Sunday Dec-25 Christmas Day
    Countrypedia

    Nicaragua
    Payroll and Benefits Guide

    Last updated: Apr 19, 2022
    Currency
    Nicaraguan Córdoba (NIO)
    Payroll Frequency
    Monthly
    Employer Taxes
    up to 22.5%

    Papaya Offers Complete Payroll, PEO and Contractor Management Services For Nicaragua

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    Overview

    Capital
    Managua
    Currency
    Nicaraguan Córdoba (NIO)
    Date Format
    dd/mm/yyyy
    Public holidays calendar

    Contributions

    Employer

    Employer Payroll Contributions

    12.5%
    Pension and Disability (less than 50 employees)
    13.5%
    Pension and Disability (more than 50 employees)
    6.0%
    Health Insurance
    1.5%
    Labor Healthcare
    1.5%
    War Victims
    up to 22.5% Total Employment Cost

    Employee

    Employee Payroll Contributions

    4.75%
    Pension & Disability
    2.25%
    Health Insurance
    7.00% Total Employee Cost

    Employee Income Tax

    0-100,000 NIO
    0%
    100,001 NIO - 200,000 NIO
    15%
    200,001 NIO - 350,000 NIO
    20%
    350,001 NIO - 500,000 NIO
    25%
    500,001 NIO +
    30%
    Employer Taxes
    3 HIGHEST
    3 LOWEST
    Mexico
    Russia
    South Korea
    Nicaragua
    Georgia
    Lithuania
    Macedonia
    43.72%
    38.5%
    34.84%
    22.5%
    2%
    1.77%
    0%
    Employee taxes
    3 HIGHEST
    3 LOWEST
    Romania
    Germany
    Netherlands
    Nicaragua
    Belarus
    Ukraine
    Cambodia
    35%
    31.05%
    30.35%
    7%
    1%
    0.6%
    0%

    Minimum Wage

    General

    The national minimum wage in Nicaragua is dependent on the employee’s industry. The national minimum wage ranges from 4,723.95 NIO per month for the agriculture, forestry, and fishing industry and 10,571.78 NIO per month for construction, financial institutions, and insurance. 

    Minimum wage (per month)
    $4000
    $2663
    $2518
    $281
    $36.80
    $17.24
    $2.33
    Geneva
    Luxembourg
    Australia
    Nicaragua
    Angola
    Tanzania
    Venezuela
    3 HIGHEST
    3 LOWEST

    Payroll

    Payroll Cycle

    In Nicaragua, the payroll frequency is stipulated in the employment contract. Manual workers are typically paid on a weekly basis, and monthly paid employees on the 15th day of the cycle.

    13th Salary

    In Nicaragua, 13th-month payments are mandatory, and the employer must pay an additional month’s salary within the first ten days of December.

    Working Hours

    General

    The standard working week in Nicaragua consists of 48 hours per week, 8 hours per day, except in the case of night-time work, which drops to 45 hours per week, 7.5 hours per day.

    Overtime

    All work above the standard working hours is paid as overtime and regulated by employment contracts/collective agreements. When an employee is requested to work overtime or work on holidays, there is a limit of 9 hours per week.

    All overtime hours in excess of 48 hours a week are paid at an overtime compensation rate; 200.00% of the employees’ regular salary.

    For work performed on a weekend or holiday, employees are entitled to a 24-hour rest period in lieu.

    Leave

    Paid Time Off

    Employees are entitled to 15 days of paid leave following six months of consecutive employment; after one year of work, an employee is entitled to 30 days of vacation leave. Employees receive 15 days of leave for every six months in service.

    Vacation days
    Public holidays
    3 HIGHEST
    3 LOWEST
    Azerbaijan
    Brazil
    Kazakhstan
    Nicaragua
    Mexico
    Malaysia
    Federal
    21
    24
    45
    30
    13
    43
    24
    19
    43
    30
    9
    39
    6
    8
    14
    8
    6
    14
    10
    10

    Sick Days

    Employees are entitled to up to 26 weeks of sick leave, paid at 60% of the regular wages by the Social Security from the 4th day of sickness.

    The first three days of sick leave are unpaid (unless the company has established a practice of paying for those days and it is stipulated within the employment contract).

    However, if the employee is hospitalised, or it is a work-related illness or injury, the 3-day waiting period/unpaid leave is waived.

    Maternity Leave

    Maternity leave in Nicaragua is 12 weeks of paid leave; an employee must take four weeks of leave before the birth of the child and eight weeks following the birth.

    In the case of multiple births, an employee is entitled to 14 weeks of paid leave, four weeks of leave to be taken before the child’s birth, and ten weeks following the birth.

    The Social Security compensates all maternity leave at 60% of the employee’s regular salary and 40% from the employer, resulting in a fully paid maternity leave.

    Employees who have contributed to Social Security for a minimum of 16 weeks preceding childbirth receive a maternity leave benefit of 12 weeks at 100.00% of the employee’s average weekly income. If an employee has not contributed to social security, then the compensation falls to the employer.

    PAID MATERNITY LEAVE (DAYS)
    413
    410
    365
    84
    40
    30
    0
    Norway
    Bulgaria
    Serbia
    Nicaragua
    Malawi
    Tunisia
    Federal
    3 HIGHEST
    3 LOWEST

    Paternity Leave

    The father/partner is entitled to 5 business days paid Paternity leave after the child’s birth.

    Parental Leave

    There are no provisions in the law regarding parental leave.

    Termination

    Termination Process

    The termination process varies according to the Employment Agreement and Collective Agreement in place and is based on the type of contract and reason for termination. To dismiss an employee, an employer must request permission from the labor inspection department. Following termination, an employee is entitled to any remaining vacation pay and their annual bonus.

    Notice Period

    Employees in Nicaragua must provide employers with 15 days’ notice.

     

    Severance Pay

    Following termination, an employee is entitled to severance pay not less than one month’s salary but cannot exceed five months of wages.

    Probation Period

    The probation period is 30 days, during which either party can terminate the employment agreement for any reason.

    VISA

    VISA

    Nicaragua’s immigration system provides several options for employers of foreign nationals. Requirements, processing times, employment eligibility, and benefits for accompanying family members vary by permit type.

    Visa-exempt nationals (also referred to as Category A nationals) can travel to Nicaragua without an entry visa and stay for a period of up to 90 days, extendable in the country for an additional 90 days at the discretion of immigration authorities. Category B visa nationals can secure a visa at a Nicaraguan consular post or on arrival at the Nicaraguan port of entry. Category C visa nationals must obtain a Consulted Visa from a Nicaraguan consular post with prior authorization from the Immigration Department of Nicaragua. These visas typically involve an extended processing time.

    Foreign nationals who will engage in work or remunerated activities in Nicaragua for less than one year can obtain a Work Permit. The Work Permit’s validity usually corresponds to the length of time the foreign national will perform work activities in Nicaragua. ​Foreign nationals who will engage in work or remunerated activities in Nicaragua for more than one year, either hired by a company in Nicaragua or independent workers who wish to perform a paid activity in Nicaragua, must obtain Temporary Residence. Temporary Residence can be issued for up to ​one year, renewable for the period of the original issuance​. After three years in Nicaragua, the foreign national may apply for a permanent resident status that can be issued for up ​to five years.​

     

    VAT

    General

    The standard rate of VAT in Nicaragua is 15.00%

    Version History

    April 19, 2022
    The national minimum wage now ranges from 4,723.95 NIO per month for the agriculture, forestry, and fishing industry and 10,571.78 NIO per month for construction, financial institutions, and insurance.
    October 3, 2021
    Minimum wage raised to 4,414.91 NIO per month for the agriculture, forestry, and fishing industry and 9,880.17 NIO per month for construction, financial institutions, and insurance.

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      Questions & Answers

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      Kara
      Kara
      5 months ago

      Thank you for the infos! I have a question regarding the 13th month pay: As far as I know it’s only for fulltime contracted employees, right? What if an employee’s contract started on 1st December. Is he or she then entitled to a 13th month pay even though the fulltime contract has only been going for one month? Thank you in advance!

      Emily Kuhnert
      Admin
      5 months ago
      Reply to  Kara

      Hi Kara, thank you for your question. This is correct, 13th salary is for full-time regular employees. If an employee has not completed a full year of employment by the time the 13th salary is due, then the payment to them is prorated based on the length of employment they have completed.

      Joan Gillem
      Joan Gillem
      4 months ago

      We have an employ that works 3 days a week, 7 hrs a day. We have a contract stating all this. He might quit because we can’t give him more work. If he quits what are we obligated to pay him?

      Emily Kuhnert
      Admin
      4 months ago
      Reply to  Joan Gillem

      Hi Joan, thank you for your question. You are required to pay the employee for the time that they have worked based on what is written in the contract.

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