Puerto Rico has many attributes that make it an attractive place to live and work. For American residents, it’s a popular destination, because of its ease of access. Because it is considered another state of America, only a driver’s license is required for entry. The close proximity to mainland America, also makes it easier for work and connecting with co-workers in other states.
|Unincorp. Org. Territory:||Puerto Rico|
|Long Name:||Commonwealth of Puerto Rico|
The climate in Puerto Rico also makes it an attractive location for holidaying or working and with today’s advances, it make it a great place to remote work. On average the temperature sits between 70 and 80 degrees Fahrenheit all year. For people in the cooler temperaturs, it’s a welcome break from the winter weather and the abundant sunshine is bound to lift anyone’s mood and relieve stress. which is great for your productivity and mental health.
Transitioning to Puerto Rico
For people transitioning to Puerto Rico from the U.S., the currency remains the same, some of the larger chains like Startucks and Walgreens can be found in the metro areas and the electricity plugs are the same. While Spanish is the primary language spoken, English is also widely used. No visa is required to enter.
Aside from the extraordinary cuisine, adventures, outdoor living and culture, Puerto Rico has a thriving business community. You’ll find strong networks for tech companies, start-ups, entrepreneurs, cryptocurrency, to name a few and it is primed to provide professional collaboration and connections. No matter what industry you’re in, you’ll have access to extensive business resources and support. While many choose remote working or working from home, there are also incubators and co-working spaces, with shared workspace, private offices, suites, and staffing services available.
Employment in Puerto Rico
Employers in Puerto Rico are subject to the taxes imposed by the Federal Insurance Contributions Act (FICA) (Social Security and Medicare taxes) and the Federal Unemployment Tax Act (FUTA). An employer is a person or organization for whom a worker performs services as an employee. As an employer, you’re required to withhold, report, and pay employment taxes to the United States on wages paid.
To file the various employment tax returns, you need an employer identification number (EIN). If you don’t have an EIN, you may apply for one online. You may also use Form SS-4PR to apply for an EIN by fax or mail (use only one method for each entity so you don’t receive more than one EIN for an entity). For more information about EINs, see Topic No. 755.
Hire in Puerto Rico
When hiring in Puerto Rico, you have two main options:
- Setup a legal entity/business
- Use an Employer of Record
Table of Benefits
If you are looking to work in Puerto Rico or engage remote workers, you will need to know about the local employment laws, tax and benefits.
The general working terms in Puerto Rico are the same as other states in America at 5 days per week, with daily working hours at 8 and 40 hours per week. Probation period and noticed period within probation in Puerto Rico is not applicable.
Salary is pro-rated based on hourly rate.
|Public Holidays – estimated||Statutory holidays – 5|
|Overtime||Overtime is usually after 8 hours per day or 40 hours per week and may vary depending the state.|
|Annual Medical Leave ( in days)||Leave times vary by state. No federal mandate for the amount of leave given each year. Accrual based if applicable.|
|Maternity Leave||8 weeks (Employed only)|
|Paternity Leave||Paternity leave (Unpaid. Employed only)|
|Compassionate Leave||N/A Not Statutory (Companies may offer)|
|Puerto Rico: Employed only||**No vacation can be taken until accrued for 1 year **|
|Breastfeeding leave||(1 hr/day for a year)|
|Christmas Bonus||2.00% (drops off at $600 per employee)|
|Statutory Contributions||Ranges from 11 – 30% depending on state or territory|
|Based on individual circumstances|
|Termination||Termination not for just cause: at least 12 weeks and up to 36 weeks|
|Medical Insurance||Puerto Rico: N/A||Puerto Rico – N/A|
|Personal Income Tax||Varies by sate or territory and individual circumstances.|
With CXC’s services, you can find, engage and pay top talent in Puerto Rico. CXC makes hiring easy and fast, alleviating the need for you to setup a legal entity. We know the local laws and tax requirements and ensure all engagements are in compliance. Hire anyone, enable teams anywhere the right way, with CXC.
If you are interested to talk more about how to expand you business into Puerto Rico or hire remote workers without having to setup a legal entity, get in touch with our team of specialists.
ABOUT CXC GLOBAL
With over 30 years’ experience and expertise in global payroll and workforce management , CXC has the resources, technology and compliance capabilities to facilitate worker engagement worldwide.
As an experienced and trusted domestic (USA & Canada) and global partner for your remote and in-office workers, CXC acts as the Employer of Record (EOR) in each country where your workers need to work.
But don’t just take our word for it. Check out our case studies to learn more about the solutions we have provided for our valued customers.