Payroll in El Salvador
Get your Salvadoran payroll's ISSS, AFP, and aguinaldo calculations right, so a single blended contribution rate never misstates what you owe at different salary levels.
Aguinaldo Payment Window
October 20 to December 20
Tax ID
NIT
Primary Registry
ISSS
Payroll in El Salvador: What You Need to Know
ISSS contribution runs at 7.5% employer and 3% employee on a capped base of $1,000 per month, meaning employer cost tops out at $75 per month regardless of higher salaries. AFP pension contribution totals 16%, split 8.75% employer and 7.25% employee, uncapped, with most of the employer's share funding the Cuenta de Garantía Solidaria under the 2023 pension reform. The INSAFORP/INCAF training levy adds 1% of total payroll, applying only once an employer reaches 10 or more employees. Aguinaldo is tiered by seniority, 15 days' salary for 1 to under 3 years, 19 days for 3 to under 10 years, and 21 days for 10 or more years, payable within an October 20 to December 20 window under a 2025 reform. Vacation, 15 days after one continuous year of service, is paid at 130% of ordinary daily salary through a mandatory 30% vacation bonus, due before the vacation period starts. Severance for unjustified dismissal runs 30 days' salary per year of service with a 15-day minimum, calculated on a reference salary capped at 4 times the legal daily minimum wage.
Key Requirements
ISSS contribution at 7.5% employer and 3% employee on a capped base of $1,000 per month, with employer cost topping out at $75 per month regardless of higher salaries
AFP pension contribution totaling 16%, split 8.75% employer and 7.25% employee, uncapped, with most of the employer's share funding the Cuenta de Garantía Solidaria
INSAFORP/INCAF training levy at 1% of total payroll, applying only once an employer reaches 10 or more employees
Aguinaldo tiered by seniority, 15 days' salary for 1 to under 3 years, 19 days for 3 to under 10 years, and 21 days for 10 or more years, payable within an October 20 to December 20 window
Vacation, 15 days after one continuous year of service, paid at 130% of ordinary daily salary through a mandatory 30% vacation bonus, due before the vacation period starts
Severance for unjustified dismissal, 30 days' salary per year of service with a 15-day minimum, calculated on a reference salary capped at 4 times the legal daily minimum wage
Common Challenges
ISSS is capped, AFP is not, so a single flat social-charges percentage misleads at every salary level
Payroll models applying one blended rate across all salary bands overstate cost for high earners, since ISSS caps at $75 regardless of salary, and understate it for the uncapped AFP contribution.
The 30% vacation bonus and tiered aguinaldo push mandatory annual bonus costs well above a simple one-month assumption
An employee with 10+ years of service earns 21 days of aguinaldo, not a flat month, and every vacation day costs 130% of ordinary daily salary, both easy to underestimate against a generic single-month 13th-salary model.
The training levy only appears once headcount crosses 10 employees
A company hiring its first few staff owes no INSAFORP/INCAF contribution, but must start the moment headcount reaches the threshold, an easy trigger to miss mid-year.
How NavviPal Helps
ISSS and AFP contribution calculation, correctly applying the ISSS cap and the AFP's uncapped structure at every salary level
Aguinaldo calculation against the correct seniority tier, processed within the October 20 to December 20 payment window
Vacation and vacation-bonus processing at the full 130% rate, paid before each vacation period begins
INSAFORP/INCAF headcount monitoring, so the 1% training levy is applied from the moment the 10-employee threshold is crossed
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