Nicaragua

• New Year's Day
• Holiday Thursday
• Good Friday
• Labour Day
• Liberation Day
• Battle of San Jacinto
• Independence Day
• Immaculate Conception Day
• Christmas Day

Working Hours

The standard work week is eight hours a day or 48 hours per week. This is reduced to seven hours a day or 42 hours per week for night shift workers.

Minimum Wage

NIO 4,414.91 to 9,880.17 per month, depending on the sector.

Employee Tax

Annual income	Tax rate
Up to NIO 100,000	0%
NIO 100,001 - 200,000	15%
NIO 200,001 – 350,000	20%
NIO 350,001 - 500,000	25%
More than NIO 500,001	30%
Pension & disability contribution	4.75%
Health insurance contribution	2.25%

Bonuses

Employees are entitled to an additional monthly salary, at the end of each year as a Christmas bonus.

Employment contracts in Nicaragua can be written or oral, though oral contracts are only allowed for agricultural, housekeeping, or temporary work of no more than ten days.

Written contracts should be drafted in Spanish and signed by both parties. They should include:

• Employee and employer details
• Job title and responsibilities
• Workplace
• Salary
• Working hours
• Contract length (if applicable)
• Date and location of contract signing.

Both indefinite and fixed-term contracts are permitted in Nicaragua.

Annual Leave

Minimum of 15 days' paid holiday for each six months of continuous work.

Sick Leave

Up to 52 weeks’ sick leave, paid at 60% of the employee’s average weekly earnings over the last eight weeks.

Parental Leave

• Maternity leave: at least 12 weeks' paid leave.
• Paternity leave: five days' paid leave.

Termination Process

There are several grounds for contract termination in Nicaragua:

• Incapacity to work
• Mutual consent
• Imprisonment or court order
• Act of God
• Retirement

Notice may be required in some cases, but it’s unclear how much notice is required from the employer. Employees must give at least 15 days’ notice of their resignation.

Wrongful termination may lead to reinstatement, plus compensation.

Severance Pay

Severance is payable for all types of termination. Employees are entitled to holiday pay and the 13th month salary. If compensation is due, it is paid at a rate of one month’s salary per year of service up to three years, plus 20 days’ wages per subsequent year of service.

Under a Mauve Group Employer of Record solution, clients and workers can reap the benefits of Mauve’s Global Master Insurance Programme – a market-leading unified corporate insurance programme that connects all Mauve entities to its two preferred providers.

The insurance provides coverage in overseas locations through a combination of the master policy and its linked local policies, where required by law in certain jurisdictions. The policies include:

• Employer’s Liability and Public Liability - £10,000,000 combined limit.
• Professional Indemnity - £5,000,000 limit.
• Worker’s Compensation – Limit is dependent on location of work.

For specific information about statutory and recommended insurances in your chosen country, get in touch with Mauve.