G-P’s Employer of Record (EOR) model allows your company to start hiring talent in minutes via our global entity infrastructure. Unlike a Professional Employer Organization (PEO), G-P allows your company to expand your global footprint without the hassle of entity setup and management.
Our global employment products, including G-P Meridian Prime™ and G-P Meridian Core™, are backed by the largest team of HR and legal experts in the industry. We handle the growing complexities of compliant global expansion — so you can focus on opportunities ahead.
As a global EOR expert, we manage payroll, employment contract best practices, statutory and market norm benefits, employee expenses, as well as severance and termination. You’ll have peace of mind knowing you have a team of dedicated employment experts assisting with every hire. G-P allows you to harness the talent of the brightest people in 180+ countries around the world, quickly and easily.
Employment contracts in Nicaragua
It is legally required to put a written employment contract in place in Nicaragua, in the local language, which spells out the terms of the employee’s compensation, benefits, and termination requirements. An offer letter and employment contract in Nicaragua should always state the salary and any compensation amounts in Nicaraguan cordobas rather than another currency. Fixed-term contracts are also permitted.
Working hours in Nicaragua
The workweek should not exceed 48 hours or 8 hours per day.
Holidays in Nicaragua
Nicaragua celebrates 9 national holidays:
- New Year’s Day
- Holy Thursday
- Good Friday
- Labor Day
- Liberation Day
- Battle of San Jacinto
- Independence Day
- Immaculate Conception
- Christmas Day
In the city of Managua, Aug. 1 and 10 are established as additional paid holidays.
Vacation days in Nicaragua
Employees are generally entitled to 15 calendar days of paid leave every 6 months. Such leave should be taken all at once, but alternate arrangements may be made.
Nicaragua sick leave
If an employee becomes ill or injured at work, they have up to 1 year to recover, with a pension from the Social Security Institute.
If the employee has a non-work related illness or injury, they are generally entitled to 26 weeks of leave, but this is often increased to 1 year. The first 3 days are unpaid, unless the company has established a policy that requires them to pay for those days.
Maternity/paternity leave in Nicaragua
Female employees are generally entitled to 4 weeks of maternity leave before the birth and 8 weeks after. The Social Security Institute pays 60% of her salary and the employer pays the remaining 40%. If the employee is not covered by social security, the employer pays the entire amount.
There is no statutory paternity leave.
Health insurance in Nicaragua
Nicaragua has a public/private healthcare system. Most routine visits are covered by the government. And while there is no private insurance, the major hospitals offer a program that works a lot like insurance.
Nicaragua supplementary benefits
Common employee benefits include:
- Pensions.
- Supplementary health insurance.
- Life and disability insurance.
- Discounts to company stores.
- Transportation allowances.
- Meal allowances.
Bonuses
Employers are expected to pay 1 month’s salary as a Christmas bonus.
Termination/severance in Nicaragua
Employees may be terminated for just cause, but the employer must request authorization for termination from the Labor Inspection Department ahead of time. If the employer terminates without authorization, the employee can sue. Proportional vacation pay and annual bonus pay are due to the employee upon termination.
The employee is entitled to indemnification for years of service if they are on an indefinite-term contract and either the employee resigned with 15 days’ notice or the employee is dismissed with just cause. In general, the employee is entitled to pay as follows:
- Up to 3 years of service: 1 month’s salary for each year or fraction of a year
- 4-6 years: 20 days’ salary for each year
- 7+ years: 5 months of salary
Paying taxes in Nicaragua
Employers with up to 50 employees contribute 21.5% of wages to social security, subject to an income cap. Employers with more than 50 employees contribute 22.5%. Employees contribute 7%, also subject to an income cap.
Why G-P?
At G-P, we help companies unlock the power of the everywhere workforce through our industry-leading global employment platform. Let us handle the complex and costly tasks involved in finding, hiring, onboarding, and paying your team members, anywhere in the world, with the speed and guaranteed global compliance your business needs.
Contact us today to learn more.