Labor social benefits in Nicaragua

In Nicaragua, a worker is entitled to several social benefits after fulfilling the conditions established in the Labor Code. These benefits are cumulative and are paid as established in the code.

A summary of the main benefits to which a worker is entitled in Nicaragua:

• A thirteenth month or ‘aguinaldo’: This consists of the payment of an additional month’s salary, to which a worker is entitled upon working one uninterrupted year in the service of an employer. This must be paid during the first ten days of December of the current year, or during the first ten days after the termination of the labor relationship. It is not indispensable that by December the employee has completed one year of active service since a proportional payment is made according to the effective time worked.
• Vacations: Another of the benefits established in the labor code consists of the enjoyment of fifteen days of continuous rest for every six months of uninterrupted work in the service of the same employer. In the event that the worker has not taken the vacation at the corresponding time, he/she will be paid for the days he/she should have rested.
• Seniority indemnity: This benefit is granted to the employee when the labor relationship is terminated and is calculated on the basis of the years of service the employee has rendered to the company. The payment amounts to the equivalent of one month’s salary for each year worked. If the employee has worked for the same employer for more than three years, starting from the fourth year, the indemnity is equivalent to 20 days of salary up to a maximum of two months of salary. In other words, a worker who has worked 6 or more years for the company is entitled to 5 months of salary as indemnity for seniority.
• Mandatory social security: The worker is entitled to be registered in the National Institute of Social Security (INSS) and the employer is obliged to register the worker and pay monthly to the INSS 22.5% of the worker’s salary, if the company has more than 50 workers, or 21.5%, if the company has less than 50 workers, as a contribution to social security. In all cases, the worker contributes 7% of his/her salary, through payroll deduction.
• Minimum wage: In Nicaragua, there is an annual revision of the minimum wage to which workers in the different economic sectors are entitled. As of March 1, 2023, workers earning the minimum wage in Nicaragua will have a 10% adjustment, as agreed by the National Minimum Wage Commission. This increase leaves out free zone companies, which are governed by another agreement in force since January 1, and which had an 8% increase this year. Minimum wages in Nicaragua from March 1, 2023 to February 29, 2024 are:

It is important to mention that these are only some of the basic labor benefits that must be paid to workers in Nicaragua, if you need more information we will be glad to assist you.