End-to-end monthly payroll workflow for Salvadoran employers: compute gross-to-net using the ISSS health contribution (USD 1,000 cap), AFP pension planilla previsional, INSAFORP training levy, and monthly income-tax withholding (retención de renta) per Decreto Ejecutivo 10/2025, then file via OVISSS and the AFP electronic planilla, with annual employee reconciliation on Form F-11.
Collect the core inputs needed before any computation: monthly gross salary in USD for each employee, employer headcount (to determine INSAFORP applicability at the 10-employee threshold), sector classification (Industry/Commerce/Services vs textile maquila vs agriculture, for minimum-wage compliance), each worker's AFP administrator (AFP Crecer or AFP Confía), and residency/domicile status for income-tax withholding. Verify every employee is paid at least the applicable sector minimum wage effective 1 June 2025.
For each employee, compute the four statutory deductions in order: ISSS employee contribution (3% on salary capped at USD 1,000 base, max USD 30.00), AFP employee contribution (7.25% on full salary up to the SSF maximum contributory base of approximately USD 7,045.06/month), then the income-tax withholding (retención de renta) on the ISR base (gross minus AFP minus ISSS employee portions) using the monthly Decreto Ejecutivo 10/2025 tables. Also compute employer-side costs: ISSS employer 7.5% (capped at USD 75.00), AFP employer 8.75%, and INSAFORP 1% of total payroll if headcount is 10 or more.
Prepare and submit the monthly ISSS contribution planilla through the OVISSS electronic platform. The combined contribution (employee 3% + employer 7.5% on the USD 1,000 capped base) is filed and paid monthly, due in the first days of the following month. Late remittances incur a 5% surcharge if up to 15 days late, or 10% if more than 15 days late; failure to file draws a penalty of 25% of contributions due (minimum USD 10.00, maximum USD 500.00).
Submit the monthly AFP pension planilla previsional through the AFP electronic platform (AFP Crecer or AFP Confía, per each employee's enrolment) in accordance with the SSF monthly contributions calendar. The combined AFP contribution is 16% of the Ingreso Base de Cotización (employee 7.25% + employer 8.75%), applied to full salary up to the SSF maximum contributory base. Since the Dec 2022 pension reform (Decreto 462, effective Jan 2023), the AFP commission was reduced to approximately 1% and is included within the 16% total.
Remit the monthly income-tax withholding (retención de renta) for all employees to the Ministerio de Hacienda. The retención is computed per the Decreto Ejecutivo 10/2025 monthly tables on the ISR base (gross salary minus AFP and ISSS employee contributions). The employer is the withholding agent and must remit this separately from the ISSS and AFP contributions. Non-resident employees are withheld at a flat 30%.
At year-end, support each employee in preparing their annual individual income-tax return (Form F-11 — Declaración del Impuesto sobre la Renta), due 30 April following the tax year (e.g., 30 April 2026 for FY2025). The F-11 reconciles the total annual net income against the progressive annual brackets (Decreto Ejecutivo 10/2025: 0% up to USD 6,600; 10% on 6,600.01–10,742.86; 20% on 10,742.87–24,457.14; 30% above 24,457.14) and the aggregate monthly retenciones withheld throughout the year. Any underpayment is settled with the F-11; overpayments generate a refund credit.
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El Salvador Statutory Payroll Contributions (ISSS / AFP / INSAFORP) and Payroll Income Tax
Use this skill whenever asked about El Salvador statutory payroll contributions, social se
El Salvador Payroll
Use this skill whenever asked about El Salvador payroll processing for employed persons. T