How to Hire Employees in Honduras (2026): IHSS, 14th Month and Contracts

Honduras offers competitive labor costs and a growing services sector. Its Labor Code adds two extra salaries a year and strong dismissal protections, so budget for both from day one.

Employment contracts

Contracts follow the Labor Code (Decree 189-59). Most are indefinite, and the notice and severance rules below apply to them.

Minimum wage in 2026

The Ministry of Labor and Social Security publishes a 2026 minimum wage table by economic activity and company size, starting from L 9,596.64 a month. Check the table for your sector.

Social security (IHSS)

For the disability, old-age and death (IVM) pension scheme, the rate is 3.5% from the employer and 2.5% from the employee (Decree 48-2024), applied up to the contribution ceilings set by the IHSS (L 11,903.13 for 2025). The employer also contributes to the IHSS illness and maternity scheme.

13th and 14th month

• 13th month (aguinaldo): one month’s salary, paid in December.
• 14th month: one month’s salary, paid in June. It is paid in full with 12 months of continuous service at 30 June, and pro rata otherwise.

Vacation

10 working days after one year, 12 after two, 15 after three, and 20 after four years or more.

Notice and cesantía

• Notice (art. 116): 24 hours with less than 3 months of service, one week for 3 to 6 months, two weeks for 6 months to a year, one month for 1 to 2 years, and two months after 2 years. It can be replaced by pay in lieu.
• Cesantía (art. 120): severance for unjustified dismissal, which grows with service up to a maximum of 25 months’ salary (15 months for micro-businesses with up to 10 employees).

Hiring foreigners

At least 90% of workers must be Honduran and receive at least 85% of total wages, with limited, time-bound exceptions (Labor Code, art. 11).

Employer of record or your own company?

If you want to hire before you have a local entity, an employer of record can employ staff on your behalf. For a long-term team, local invoicing or contracts in your own name, it is usually better to set up your own company in Honduras and run payroll there.

Get help from Easyco

Easyco coordinates the company setup in Honduras up to the tax ID, and supports companies afterwards with tax, accounting, payroll and company compliance, including a registered office address. Contact us to discuss your hiring plans.