Severance pay in El Salvador: dismissal vs. resignation
El Salvador’s Labour Code is unusually generous when an open-ended contract ends without just cause: article 58 awards 30 days of basic salary for every year of service, plus a proportional share for any fraction of a year. Workers who resign voluntarily are covered too — since 2015, D.L. 592 grants 15 days per completed year if certain conditions are met. On top of either amount, the employer owes the proportional vacation and aguinaldo (the mandatory Christmas bonus). This calculator estimates the full settlement, in US dollars, with the figures in force in 2026.
| Item | Unjustified dismissal (art. 58) | Voluntary resignation (D.L. 592) |
|---|---|---|
| Days per year of service | 30 | 15 |
| Fractions of a year | Yes, proportional | No — completed years only |
| Daily-wage cap | 4 × sector minimum wage | 2 × sector minimum wage |
| Minimum service required | None (floor: 15 days of pay) | 2 continuous years |
| Income tax, ISSS, AFP | Exempt up to the legal amount | Exempt (art. 7); no contributions |
| Deadline to claim | 60 days (indicative) | 90 business days |
2026 caps by sector
The countable daily wage is capped using the sector minimum wage (Decree 11/2025, in force since June 2025, no adjustment in 2026; the next mandatory review is due by 2028):
| Sector | Daily minimum | Dismissal cap (4 ×) | Resignation cap (2 ×) |
|---|---|---|---|
| Trade, services and industry | $13.44 | $53.76/day | $26.88/day |
| Textile maquila | $13.227 | $52.908/day | $26.454/day |
| Coffee mills and sugarcane harvest | $10.035 | $40.14/day | $20.07/day |
| Agriculture, fishing and coffee harvest | $8.96 | $35.84/day | $17.92/day |
For trade and services, the dismissal cap works out to at most $1,612.80 per year of service (it bites on monthly salaries above $1,612.80) and the resignation cap to $403.20 per year (salaries above $806.40).
How to use the calculator
- Pick how the contract ended: unjustified dismissal or voluntary resignation.
- Enter your basic monthly salary — no overtime or occasional bonuses.
- Choose your sector, which sets the minimum wage used for the cap.
- Set the start and end dates; the tool works out years, months and days.
- Tick or untick the proportional vacation (15 days plus a 30% premium, arts. 177 and 187) and the proportional aguinaldo (15, 19 or 21 days by seniority, accrued since the previous December 12).
Worked example
Unjustified dismissal, $800 per month in the trade sector, 5 years and 6 months of service:
- Daily wage: 800 ÷ 30 = $26.67, below the $53.76 cap, so it is used in full.
- Per year: 26.67 × 30 days = $800.00.
- Five full years: 800 × 5 = $4,000.00.
- Six-month fraction: 800 × 6 ÷ 12 = $400.00.
- Total severance: $4,400.00, tax-free and with no ISSS or AFP deductions.
Had the same worker resigned after 4 full years, the benefit would be 26.67 × 15 = $400 per year: $1,600.00. With a $1,000 salary and 3 years, the cap kicks in: 26.88 × 15 = $403.20 per year → $1,209.60.
Frequently asked questions
Is the severance taxed or subject to deductions?
No. Dismissal severance is exempt from income tax up to the legal amount (art. 4 of the income-tax law) and the resignation benefit under its own law (art. 7, D.L. 592); neither pays ISSS or AFP. The aguinaldo is exempt up to $817.60 in 2026 (2 trade-sector minimum wages); temporary decrees raised it to $1,500 in 2022 and 2025, but as of July 2026 none exists for December 2026.
I worked less than a year — do I get anything?
Yes, if dismissed without cause: the payment is proportional, with a legal floor of 15 days of basic salary. On $800 a month and 8 months of service, the proportion is 800 × 8 ÷ 12 = $533.33, which beats the $400 floor and is what you receive.
I resigned after 3.5 years — is the half year paid?
D.L. 592 grants “15 days per year of service” and does not regulate fractions, so the prudent reading pays completed years only — 3 in this case. Dismissal severance, by contrast, is proportional.
What conditions apply to the resignation benefit?
At least 2 years of continuous service with the same employer, a written resignation (Ministry of Labour forms or a notarized private document) and advance notice: 30 days for managers and specialized staff, 15 days for everyone else. Payment is due within 15 days, and the claim expires after 90 business days.
This tool gives an informational estimate with the values in force as of July 2026; it is not legal advice. Review it yearly: the minimum wage can be raised by decree before the 2028 three-year review.