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Ecuador is fully dollarized (USD since 2000). 12.15% employer IESS, FCL severance fund (3%/month), mandatory 13th month (December 24) and 14th month (August/April), and 15% profit sharing. Rippling EOR handles IESS, SRI, and Labour Code compliance.
Ecuador is a fully dollarized South American economy and a growing US nearshore tech destination. Quito and Guayaquil host the primary tech and professional services markets. EOR is popular for US companies accessing Ecuador's bilingual, educated workforce. USD economy eliminates FX risk. IESS at 12.15% employer and dual 13th/14th month bonuses are the key planning items.
EOR is recommended for 1–10 employees. Ecuador's dual 13th/14th month bonus management and IESS audit environment make local compliance expertise critical. Rippling EOR handles all statutory bonus calculations and occupational category minimum wage compliance.
IESS employee: 9.45% on gross. Income tax: progressive 0–37% on annual income; withheld monthly. Annual personal exemption reduces taxable base.
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IESS employer: 12.15% on gross. SECAP/IECE levies: 1%. Total employer on-cost approximately 13.15% of gross. Plus 13th/14th month bonuses (each equal to USD 460 minimum wage, 2024) and 15% profit sharing if profitable.
Progressive 0–37% on annual income (9 brackets). Monthly IR withholding by employer; remitted to SRI. Annual IR declaration by March 31.
Annual leave: 15 working days/year (after 1 year). Sick leave: employer 3 days at 50%; IESS from day 4. Maternity: 12 weeks at full salary. Paternity: 10 days. Public holidays: 12 national holidays.
Desahucio: 25% of last monthly salary per year. Unfair dismissal: 3 months' salary. Notice: 15 days to 1 month. 13th/14th month pro-rata. Rippling EOR calculates full package.
Non-Ecuadorian nationals require work permits from MDT (Ministry of Labour). Processing: 4–8 weeks. Rippling EOR supports permit applications through its Ecuadorian entity.
Statutory: IESS 12.15% employer, FCL 3%/month severance fund, 15 working days annual leave, 12 weeks maternity, 13th/14th month bonuses (mandatory). Market standard: private health supplementary, performance bonus. Quito and Guayaquil are the primary markets.
Rippling EOR Ecuador operates through a local Ecuadorian entity. Key Ecuador-specific handling: IESS monthly contributions (12.15%), FCL severance fund (3%/month), 13th/14th month bonus payments, occupational category minimum wage compliance, SRI income tax withholding, and 15% profit sharing calculation.
Ecuador's 13th month (Bono Navideño, by December 24) and 14th month (Bono Escolar, by August 15 coast / April 15 Sierra) are each equal to 1 monthly minimum wage (USD 460 in 2024). Rippling EOR calculates and pays both automatically on schedule.
Ecuador is fully dollarized since 2000. All payroll, IESS contributions, and tax filings are in USD. Zero FX risk for US employers. All Rippling EOR payroll in Ecuador is processed in USD.
If the employing entity (Rippling EOR's Ecuadorian entity) has net profits, 15% of those profits must be distributed to employees: 10% equally among all employees; 5% based on family size. Rippling EOR manages 15% profit participation as part of annual employee settlement.
Notice: 15 days (under 1 year) to 1 month. Desahucio (employer-initiated termination): 25% of last monthly salary per year of service. Unfair dismissal penalty: 3 months' salary. 13th/14th month pro-rata on termination. Rippling EOR calculates full termination package.
