How to Hire Employees in Nicaragua (2026): INSS, Contracts and Benefits

By easyco Published October 14, 2026

Nicaragua has some of the lowest labor costs in Central America, but employer social security rates are high. Here is what to plan for in 2026.

Employment contracts

Employment follows the Labor Code (Law 185). Put contracts in writing, stating the pay, hours and duties.

Minimum wage in 2026

Minimum wages are set by sector for March 2026 to February 2027. For example, C$6,188.02 a month in agriculture, C$11,113.46 in mining and C$13,848.23 in construction. Check the official table for your sector.

Social security and training levy

INSS (comprehensive regime): 7% from the employee. The employer pays 21.5% with 50 or fewer workers and 22.5% with more than 50 (Presidential Decree 06-2019).
INATEC: a 2% employer contribution on gross payroll.

13th month

One month’s salary, paid in the first ten days of December, and pro rata when employment ends. It is exempt from taxes and contributions.

Vacation

15 days of continuous paid rest for every six months of uninterrupted work with the same employer (art. 76).

Severance

When an employer ends an indefinite contract without just cause, it pays one month’s salary for each of the first three years and 20 days for each year after that, with a minimum of one month and a maximum of five months (art. 45).

Hiring foreigners

At least 90% of workers must be Nicaraguan, unless the Ministry of Labor approves a justified technical exception (art. 14).

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 Nicaragua and run payroll there.

Get help from Easyco

Easyco coordinates the company setup in Nicaragua 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.