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Ecuador is fully dollarized (USD since 2000). 12.15% employer IESS, mandatory 13th month (December) and 14th month (August/April) bonuses, and 15% annual profit sharing. Rippling handles IESS, SRI, and Ecuador Labour Code compliance.
Ecuador is a dollarized South American economy with a well-educated workforce in Quito (capital and tech hub) and Guayaquil (commercial hub). Ecuador's USD economy eliminates FX risk for international employers. Ecuador is a growing nearshore destination for US companies, particularly in technology and professional services, due to its time zone alignment and bilingual workforce.
| Contribution | Rate | Notes |
|---|---|---|
| IESS (employer) | 12.15% | Pension 9.15%, health 2%, work accident 0.5%, other 0.5% |
| SECAP/IECE levies | 0.5% + 0.5% | Training and education levies |
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| Contribution | Rate | Notes |
|---|---|---|
| IESS (employee) | 9.45% | Pension, health, maternity branches |
| Income tax (IR) | 0–37% | Progressive; withheld monthly by employer |
| Annual Income (USD) | Rate |
|---|---|
| Up to 11,722 | 0% |
| 11,723–14,930 | 5% |
| 14,931–19,682 | 10% |
| 19,683–26,031 | 12% |
| 26,032–34,255 | 15% |
| 34,256–45,407 | 20% |
| 45,408–60,450 | 25% |
| 60,451–80,605 | 30% |
| Above 80,605 | 37% |
Monthly IR withholding by employer; remitted to SRI. Annual IR declaration by March 31.
Notice: 15 days (under 1 year) to 1 month. Desahucio: 25% of last monthly salary per year. Unfair dismissal penalty: 3 months' salary. 15% profit sharing annually if company is profitable.
Ecuador mandates two annual bonuses: the 13th month (Bono Navideño) paid by December 24, and the 14th month (Bono Escolar) paid by August 15 on the coast and by April 15 in the Sierra/Amazonia. Both equal 1 monthly minimum wage (USD 460/month in 2024). These are fixed amounts, not percentages of salary, making them more predictable to budget. IESS-exempt.
Ecuador is fully dollarized — the US dollar has been the official currency since 2000. All payroll, IESS contributions, and tax filings are in USD. This eliminates foreign exchange risk for US employers and simplifies payroll administration significantly.
Ecuador's minimum wage is USD 460/month (2024), set annually by the government. Ecuador also uses a complex sectoral wage system (salarios mínimos sectoriales) for specific occupational categories, which may exceed the general minimum. Employers must apply the higher of the national minimum or the applicable sectoral wage.
Notice: 15 days (under 1 year) to 1 month. Severance (desahucio): 25% of last monthly salary per year of service on employer-initiated termination. Unfair dismissal (visto bueno not granted): additional 3 months' salary penalty. Participation profits (15% of profits): if company has net profits, 15% distributed to employees annually.
