What is severance pay in Guatemala?

Severance pay (indemnización) is the payment an employer must make when dismissing an employee without just cause. It equals one month's salary per year worked, per Article 82 of the Labor Code.

What does a full severance package include?

A complete severance package includes: indemnización (1 month per year), unused vacation (15 working days), proportional aguinaldo (Christmas bonus), and proportional Bono 14.

How is proportional severance calculated?

If you worked less than a year, severance is calculated proportionally. For example, 6 months = half a monthly salary in severance.

Is severance pay subject to income tax?

Severance pay is exempt from ISR up to a certain limit. Labor benefits like aguinaldo, Bono 14, and vacation pay are fully exempt.

Severance Pay Calculator Guatemala

Calculate your full severance package according to Guatemala's Labor Code

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