Nicaragua is located in Central America. It is famous for its landscape of lakes, volcanoes, and beaches. It has a population of over six million people and a mix of indigenous and Spanish cultures, resulting in a diverse range of music, food, language, and religion. Spanish is the most widely spoken language in the state. Managua, Nicaragua’s capital and largest city, has a population of over one million people. Trade, textiles, and agriculture account for nearly half of Nicaragua’s exports. Nicaragua’s top three export commodities are beef, coffee, and gold.
*Please note that the official currency is the currency of remuneration when employed through WorkMotion in Nicaragua.
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Capital :
Managua
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Currency :
Nicaraguan Córdoba (C$, NIO)
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Languages spoken :
Spanish
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Population :
6.7 million (2021 est.)
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Minimum wage 2023 :
Varies across industries
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Cost of Living index :
$$ (84 out of 139)
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Payroll Frequency :
Bi-weekly/Monthly
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VAT - standard rate :
15%
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GDP - real growth rate :
10.3% (2021 est.)
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The holidays mentioned below are valid for the year 2023.
The approximate time for sharing the contract with an employee in Nicaragua is 14 business days assuming no special requests or changes to our standard employment contract. Any such requests or changes would need to undergo internal and external review, directly leading to a time delay.
NOTE: This number is subject to change and is only an estimation of the Contract Sharing Time. The estimated Contract Sharing Time begins from the moment that WorkMotion has received all required information from both the client and the employee.
The calendar day for work purposes is between six in the morning and eight at night. The ordinary day of effective daytime work must not exceed eight hours a day or exceed a total of 48 hours a week.
Work performed outside of normal working hours is considered extraordinary hours, but work performed to correct errors attributable to the worker is not. The number of overtime hours may not exceed three hours per day or nine hours per week. Overtime is paid 100% more than what is stipulated for the respective normal day.
In contracts for an indefinite period, the parties may agree on a trial period of no more than 30 days during which any of them may terminate the employment relationship without any liability for them.
In contracts for an indefinite period, the parties may agree on a trial period of no more than 30 days during which any of them may terminate the employment relationship without any liability to them.
When the contract is for an indefinite period, the worker may terminate it by notifying the employer in writing 15 days in advance.
Every worker has the right to enjoy 15 days of continuous and paid rest as vacations, for every six months of uninterrupted work at the service of the same employer. Vacations are paid by calculating them based on the last ordinary salary earned by the worker.
If an employee becomes ill or injured at work, they have up to a year to recover while receiving a Social Security Institute pension.
If an employee suffers from a non-work-related illness or injury, they are entitled to 26 weeks of leave paid by social security.
There are no provisions in the law regarding parental leave.
Pregnant workers have the right to rest during the four weeks before delivery and the eight weeks after, or 10 in the case of multiple births, with the last or best salary. The period of rest is computed as effective work for purposes of the rights for seniority, vacations, and the 13th month.
The worker, when she is breastfeeding, has 15 minutes at the workplace every three hours during the working day, to feed her child. That time must be computed as effective work.
60% of the insured’s average weekly earnings in the last eight weeks before childbirth is paid by social security for four weeks before and eight weeks after the expected date of childbirth.
After the child is born, the father is entitled to five business days of paid paternity leave.
Workers have the right to leave or leave with pay in the following cases:
There is no statutory provision for unpaid leave.
Social security contributions are levied on salaries at a rate of 21.5% for employers and 7% for employees. These rates are increased annually.
Common employee benefits include:
| Benefits | Employer Contributions | Employee Contributions |
| Pension and Disability | 12.5% (up to 50 employees) or 13.5% (more than 50 employees) | 4.75% |
| Health Insurance | 6% | 2.25% |
| Accident Insurance | 1.5% | – |
| War Victims | 1.5% | – |
| Total | 21.5% or 22.5% | 7% |
Employers contribute 6% to health insurance, while employees contribute 2.25%.
Nicaragua has a public/private healthcare system. Benefits include general and specialist care, hospitalization, laboratory services, and maternity care.
Employers contribute 1.5% of covered payroll (+1.5% of covered payroll for war victims’ pensions). The employee must be assessed with a work injury or an occupational disease. Accidents that occur while commuting to and from work are also covered.
There is no mandatory unemployment insurance in Nicaragua.
Employers contribute 12.5% to the pension if there are up to 50 employees, or 13.5% if there are more than 50 employees, while employees contribute 4.75%.
To be eligible, employees must be 60 years old and have contributed for at least 750 weeks.
The pension can be deferred until the age of 70. A working pensioner must make contributions. The pensioner’s salary cannot exceed the amount of their pension. The pension is not payable outside of the country.
The grant is supposed to help with marriage expenses. The employee must have at least three years of contributions. A lump sum of one month of the insured’s monthly earnings is paid. The benefit is paid for only one marriage
The information contained in this Country Guide is provided for informational purposes only and should not be construed as legal advice on any subject matter. The contents of this Country Guide contain general information and may not reflect current legal developments or address your situation. You should not act or refrain from acting on the basis of any content included in this Country Guide without seeking the advice or representation of a licensed attorney. WorkMotion Software GmbH disclaims all liability for actions you take or fail to take based on any content included in this Country Guide.
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