Hire and pay employees in
Puerto Rico, hassle-free

With Deel, your business can easily hire employees in Puerto Rico. No more worrying about local laws, complex tax systems, or managing international payroll. Deel takes care of everything in 150+ countries.

The average onboarding time frame in Puerto Rico is 2 days with Deel.

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Onboard, pay and manage employees in Puerto Rico with Deel.

Usually, to hire in Puerto Rico, your business needs an entity. That means a local office, an address registered as a subsidiary, and an account with a local bank. All of this, plus navigating regional benefits, payroll, tax, and HR laws, can take months.

Deel lets you hire employees in Puerto Rico quickly, easily, and compliantly. We even automate tax document collection, payroll, benefits, and more. For your existing direct employees, we can manage your entire payroll operation from end-to-end.

Download the Guide

All the necessary benefits for Puerto Rico
built right in

Deel allows you to provide localized benefits for employees in Puerto Rico within minutes. All in one manageable online dashboard.

Public Health Care
Social Security
Workplace Accident Insurance
Private Healthcare - Unisure (optional)
Private Healthcare - Allianz (optional)
Global Life Insurance - Allianz

Our quickstart guide to hiring in Puerto Rico

Navigate the tabs below to learn everything you need to know about hiring an employee in Puerto Rico

Minimum Wage Requirements

The minimum wage is USD 1,160 per month.

Individual Income Tax

The individual income tax ranges from 0% to 33%. Income tax is calculated according to progressive rates. Multiple additional factors may impact overall rates, such as household status and the number of children.

Payroll Cost

The employer cost is estimated at 13.75% of the employee salary.

Monthly Costs

Puerto Rico unemployment - 2.70%*
Puerto Rico Special Assessment - 1.00%*
Workers Compensation Insurance - 1.50%
Federal Unemployment Tax (FUTA) - 0.60%*
Federal Social Security and Medicare (FICA) - 7.65%**
the maximum salary for the contribution is USD160,200
Disability Insurance - 0.30%***
the maximum salary for the contribution is USD 9,000

*up to a maximum salary for the contributions of USD 7,000

*up to a maximum salary for the contributions of USD160,200

*up to a maximum salary for the contributions of USD 9,000

Annual Costs

13th Month Salary - 2% of salary, no more than $600 USD

In Puerto Rico, in accordance with local labor law, the maximum annual contribution for FICA, FUTA, PR Unemployment and Disability are USD 11,245.5 , USD 56, USD 266 and USD 27 respectively. Once met, no further contributions are required.

These costs are provided as estimates and are intended solely for general informational purposes. To fully comprehend all associated costs and fees related to the terms of any employment agreement for this country, please contact our Sales team for a quote.

Overtime Pay & Maximum Hours

Standard working hours are 8 hours per day and 40 hours per week. The standard workweek is from Monday to Friday.

Overtime payment is mandatory for non-exempt employees. Hours outside of standard work hours are considered overtime. For additional hours, employees are paid 150% of the hourly rate.

Non-exempt employees, according to federal and Puerto Rico overtime laws, are employees that do not spend most of their time managing teams or performing executive or professional duties and earn a salary above USD 2,964 per month.

Maternity Leave

Employees are entitled to 8 weeks of paid leave; 4 weeks must be taken before the child's birth. The remaining days can be divided into two periods of time. The employee will receive 100% of the salary during this period, and the employer will be responsible for this pay.

Paternity Leave

Employees are entitled to 5 working days of unpaid leave.

Parental Leave

Employees are entitled to 12 weeks of parental leave. Both parents can decide how to distribute the time off, which should be taken after paternity and maternity leave. Either parent can take parental leave. Parental leave is unpaid.

Sick Leave

Employees are entitled to paid sick leave for up to 12 days, depending on the length of service. Employees accrue one sick day for every month worked up until 12 days. The employer pays sick leave at 100%.

Termination Requirements

Terminations must respect complex rules and the rules of an employee’s employment country. The off-boarding is always handled by the Employer with the primary stakeholders. It may include ad-hoc fees as well as required or recommended steps on specific termination cases.

Terminations in Puerto Rico are complex. Employees hired for an indefinite period should be terminated by just cause. If is terminated without case, the employee will be entitled to an indemnification.

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 expiration of the contract

Notice Period

In Puerto Rico, notice period does not apply.

Severance for Employees

In Puerto Rico, all employees who are terminated without just cause are entitled to severance pay. Severance pay varies depending on the employee's length of service:

3 months’ salary, plus 2 week’s salary per completed year of service; capped at 9 months of salary in total.

Paid Time Off

Both full-time and part-time employees are entitled to 6 working of paid time off (PTO) a year. PTO and accrual rate varies depending on the length of services. During the first year of employment, an employee is not allowed to take more than 6 days.

During the first year of service: 0.50 days per month, up to six days a year.
From the 2nd through the 5th year of service: 0.75 days per month, up to nine days a year.
From the 6th through the 15th year of service: 1 day per month, up to 12 days a year.
From the 15th year of service: 1.25 days per month, up to 15 days a year.

Public Holidays

Puerto Rico celebrates 18 national holidays.

New Year's Day
Epiphany
Martin Luther King Jr. Birthday
President's Day
Emancipation Day
Good Friday
Easter Sunday
Mother's Day
Memorial Day
Father's Day
Independence Day
Constitution Day
Labour Day
Day of the Race
Veterans Day
Discovery Day
Thanksgiving Day
Christmas Day

Onboarding

Onboarding takes 2 business days after the client signs the SOW. The hiring process includes registering the employee in Social Security. This must be done at least 1 day before the start date.

Employment Contract Details

Contracts must be in English 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

Probation Period

The length will depend on the classification of the employee:

Non- exempt employees: 9 months
Exempt employees 12 months

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Hiring in Puerto Rico, hassle-free

With Deel, your business can easily hire employees in Puerto Rico with our EOR solution. If you have an entity, our Global Payroll solution takes care of payroll and compliance for your direct employees. Our 250+ in-house experts handle everything from managing local laws, complex tax systems, or your payroll in Puerto Rico and 150+ countries.

Starting at 599 USD

Management fee

13.75%

Estimate Employer Cost

*of employee salary

Want to learn the cost of hiring an employee in Puerto Rico?

View our Employee Cost Calculator

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Hire and pay employees in Puerto Rico, hassle-free