How to hire remote employees in

Puerto Rico

Want to hire in Puerto Rico? Slightly less sure how you’re supposed to go about it? You’re in the right place. In the next few minutes, you’ll learn how to hire remote talent in Puerto Rico, quickly, without wading into months and thousands of dollars of legal red tape.

Country snapshot

CURRENCY
United States Dollar (USD)
EMPLOYER TAXES
17.95% - 22.85%
PAYROLL FREQUENCY
Weekly, bi-weekly, or semi-monthly
OFFICIAL LANGUAGE
Spanish, English

What to know before you hire in 

Puerto Rico

Hiring abroad is notoriously difficult: New labor laws, entities, a lot of words you’d rather not hear again. But we’ve got good news—it doesn’t need to be that way. Below, we’ll break down your two main options for hiring in Puerto Rico (and the one we prefer).

If you want to successfully hire in 

Puerto Rico

, you have two options:

Hire talent as contractors

Laws about hiring contractors are significantly more simple in 

Puerto Rico

. Onboarding talent takes days, not weeks or months. Both you, the company, and your talent have more flexibility. And in many cases, since you’re remote, the talent you’re hiring is better classified as a contractor, anyway. Of course, it’s not possible in every case, but it’s what we built Panther for.

Hire talent as employees

This is the long route. You can either establish a physical presence with an entity and register as an employer, or you can use an Employer-of-Record (EOR) solution. Odds are, you’ll find using an EOR to be the easier route. Still, using an EOR in 

Puerto Rico

 is expensive—it can often be $500 per month per employee—and sometimes prone to lengthy onboarding times.

Why hire independent contractors in 

Puerto Rico

Hiring contractors is normally the easier, faster, more flexible choice—but don’t just take it from us. Below are the specific benefits and drawbacks to hiring contractors in 

Puerto Rico

.

It’s the fastest way to hire globally

Hiring employees takes months, at the minimum. When you hire with Panther’s locally-generated contracts, it’s a matter of days or weeks. This means you can hire the best talent, fast, without losing them to a hellish procession of paperwork.

It’s a lot cheaper

It costs just $0 to sign up for Panther, then $49 per month to hire your contractors with Panther. If you hired employees manually (or did contracting on your own), you’d likely be on the hook for thousands of dollars each month. Setting up an entity alone can cost tens of thousands of dollars.

It’s more flexible for you & your team

Hiring contractors in 

Puerto Rico

 means you’re generally not on the hook for things like health insurance and paid time off. This makes hiring flexible for you, and it gives your talent more options.

It’s less risky than hiring employees

Hiring employees is a bigger commitment, and generally puts you at a bigger risk for legal fees. When you hire contractors overseas, your biggest risk is misclassification—but even then, misclassification penalties are often minimal and just require you to pay off any compensation that the person would have been owed as an employee.

Some people want to be employees

The contractor life isn’t for everyone—some people want the security that being an employee often appears to provide. Though it’s rare, this does happen, and it’s one disadvantage of manage an all-contractor team.

You might not have as much control over your talent

Most countries’ contractor-employer relationship laws stipulate that the employer can’t set fixed working hours, among other things. These laws give contractors more freedom over how and when they do their work than an employee would have. In reality, however, most contractors are willing & able to work on the company’s schedule—it’s a matter of setting expectations beforehand.

How can I pay people in 

Puerto Rico

?

If you’re hiring contractors in 

Puerto Rico

, you can pay them with Panther in a single click. You won’t need to worry about complicated wire transfers, fees, or currency conversions. We’ll take care of it all. Just make a click and your contractor will get paid in their currency of choice. This is a valuable bonus for talent in countries where the local currency is particularly weak—most people appreciate the ability to receive their payment in stronger currencies.

Hiring and paying your team in 

Puerto Rico

Hire and pay with Panther

Pay everyone with a single click
Get great currency conversion rates
Pay $0 in platform fees
Run payroll in seconds
Let Panther automatically create & store invoices
Let Panther automatically write locally-compliant contracts
Let Panther automatically file local tax documents

Hire and pay without Panther

Pay all your contractors individually
Do all currency conversions yourself
Shoulder the burden of platform fees
Spend hours each month making payments
Manually track & store invoices
Manually write & sign contracts
Manually file relevant tax documents

Let Panther save you from hiring headaches.

Sign up today for $0

If you want to hire employees in 

Puerto Rico

If you’ve read up until this point, you’ll know that it’s easier, cheaper, and more flexible to hire contractors in Puerto Rico than employees. Still, there are valid reasons why you might want to hire employees instead. The content below is for you—we’ll cover employer taxes and obligations in Puerto Rico.

Taxes in 

Puerto Rico

Employer tax

FICA Social Security (Federal)

FICA Medicare (Federal)

FUTA (Federal Unemployment Tax)

SUTA (State Unemployment Tax)

SUTA New Employer Tax

Individual tax

Leave

Paid Time Off (PTO)


The annual leave entitlement in Puerto Rico is dependent on the seniority of the employee as follows:

  • If an employee has been employed for one year, they will be entitled to six days of annual leave.
  • Between one and five years, they will be entitled to nine days of annual leave.
  • Between five and 15 years, they will be entitled to 12 days of annual leave.
  • More than 15 years, the employee receives the maximum entitlement of 15 days annual leave.

Public Holidays

Puerto Rico celebrates 19 holidays; all American national holidays as well as its own holidays.

Sick Days


Following 12 months of consecutive service at a company an employee is entitled to six days of paid leave for severe diseases.

Employees receive 12 days of paid sick leave which is accrued at the rate of one day per month following the commencement of at least 130 hours in that month.

Maternity Leave

An employee in Puerto Rico is entitled to a maternity leave of eight weeks, four weeks of which is generally taken before the birth and four weeks after. An employee can start maternity leave as late as one week before their predicted due date and can return just two weeks after the child’s birth, providing the employee can present a medical certificate.

Maternity leave can be extended to 20 weeks following a pregnancy-related complication; however, the additional 12 weeks will be unpaid.

Adoptive mothers are entitled to the same maternity benefits as those of a mother who gives birth, providing the adoptive child is below the age of 6.

Paternity Leave

Private sector employees can choose to take six months of job-protected unpaid leave.

Parental Leave

Employers with a workforce of 50 employees or more can provide their employees with 12 weeks of unpaid leave for the birth of a new-born child, the placement of an adoptive/foster child, to care for an immediate family member, or to take medical leave when an employee is unable to work, under the US Federal Family and Medical Leave Act (FMLA).

Other Leave

Special paid leave of up to 6 months for an employee with one of the Serious Diseases of Catastrophic Character listed by the Special Coverage of the Health Insurance Administration of Puerto Rico.

Marriage Leave

No Info.

Bereavement Leave

No Info.

Termination

Termination Process

Employers must have “just cause” to terminate an employee based on the employee’s job performance or behavior. If there is no just cause for dismissal, the employee receives severance pay.

Notice Period

There is no notice period.

Severance Pay

There is no severance pay if there is “just cause” for termination.  

If there is no just cause, the employee receives two months’ pay if the termination occurs within the first five years; three months pay if 5-15 years, and three months pay after 15 years.  

The employer must also pay an additional two weeks’ salary for each year of service, with a maximum of 9 months total severance. 

Probation Period

The probationary period is 9 months; 12 months for employees classified as “executives”, “administrators” and “professionals”.

Employee requirements in 

Puerto Rico

Working Hours

A standard working week is 40 hours and a workday is 8 hours.

Overtime

Employees in Puerto Rico are entitled to be paid at least 1.5 times their normal rate for all hours worked over the overtime limit for any hours worked over a total of 40 in a single workweek.

Non-exempt employees under the Fair Labor Standards Act (FLSA) receive 150% for hours worked in excess of 40 hours a week or 8 hours a day.

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