The individual income tax ranges from 0% to 25%. Income tax is calculated according to progressive rates. Multiple additional factors may impact overall rates such as the household status and the number of children.

The employer cost is generally estimated at 15.37% of the employee salary.

• Public Health Insurance (Disability, Retirement, Death) - 3.5%
• Public Health Insurance (Sickness, Maternity) - 5.0%
• Public Health Insurance (Professional Risk) - 0.20%
• Retirement Pension - 1.50%
• Severance Provision - 4.0%
• Worker Compensation (Professional Training) - 1.17%

Standard working hours are 8 hours per day, from Monday to Friday, and 4 hours on Saturday, accumulating 44 hours per week.

Overtime payment is mandatory and is not included in the salary. Hours outside of standard work hours are considered overtime. Employees can work a maximum of 16 hours of overtime a week. For additional hours, employees are paid:

• 125% of the hourly rate for overtime undertaken between 5:00-19:00
• 175% of the hourly rate for overtime undertaken between 19:00-5:00
• 150% of the hourly rate for overtime undertaken mixed between the above hours
• 200% of the hourly rate for overtime undertaken on weekends and public holidays.

Employees are entitled to paid sick leave for up to 26 weeks. The leave is paid at 66% of an employee's average salary over the last 3 months. The payment is split between the employee and employer. After an additional 3 day observation period employees can add additional 26 weeks if required.

Terminations in Honduras can be complex. There is no at-will termination in Honduras for employers and termination must be done for just cause.

Compliant terminations include:

• Voluntarily by the employee
• By mutual agreement
• Unilaterally by the employer based on:
  • Probation period
  • Objective grounds
  • Disciplinary dismissal
  • Performance due to unsuitability for the job
• By the expiration of the contract

The minimum notice period is 1 day and will be increased according to the length of the employment.

• 1 day if the length of service is less than 3 months
• 1 week if the length of service is less than 6 months
• 2 weeks if the length of service is less than 1 year
• 1 month if the length of service is less than 2 years
• 2 months if the length of service is over 2 years

In Honduras, all terminated employees for unjust cause are entitled to severance pay. Severance pay varies depending on the length of service as follows:

Full-time employees are entitled to 10 working days of paid time off (PTO) a year. PTO and aural rate varies depending on the length of services. During the first year of employment, an employee is not allowed to take more than 10 days.

Part-time employees are entitled to one day per month.

Honduras celebrates 11 national holidays.

National public holidays include:

• New Years Day
• Maundy Thursday
• Good Friday
• Easter Saturday
• Americas' Day Holiday
• Labor Day
• Independence Day
• Francisco Moranzan's Birthday
• Day of the Race
• Army Day
• Christmas Day

Contracts must be in Spanish and can be bilingual. They must be in writing and signed by both parties.

A contract must include:

• Name
• Start date
• Length of the employment
• Job description
• Termination conditions