What is a PEO?

A professional employer organization is essentially a global human resources (HR) service provider and legal team. They work to provide startups and small businesses with an administrative team that can take on tedious tasks such as payroll management, designing attractive employee benefits packages, ensuring that businesses remain compliant with local labor legislation in all countries, and more.

With PEOs assuming these time-consuming administrative roles, businesses have more time to focus on their productivity and growth. It also saves them the time and money it would take to hire entire teams of people to perform these functions.

With the help of a PEO, you can build an international team with employees working remotely from all around the world, including Guatemala. Your PEO in Guatemala will act as your HR and legal team to ensure your employees are taken care of and that you’re fulfilling the local statutory employer requirements.

‍Are you wondering if partnering with a PEO is right for your business? Speak with a Skuad team member today. We’ll be happy to answer all your questions.

What are the benefits of using a PEO provider in Guatemala?

Working with a PEO in Guatemala is just the start of your international expansion. Below you’ll find that there are plenty of benefits that come with PEO services in Guatemala and elsewhere.

Hire from the best of the Guatemalan and global talent pool

Sometimes finding the best candidate for certain roles within your company means thinking outside of the box. Or in this case, sourcing from beyond your city limits. 

As previously mentioned, Guatemala has a quickly growing tech sector that’s a force to be reckoned with. With it comes an emerging pool of talent that has attended top universities such as Universidad Galileo. Some of this talent has even given us globally recognizable apps, like Duolingo and Doctor Online, to name a few.

Using a PEO means you can access the ever-growing and hungry Guatemalan talent pool.

Become a globally recognized employer

Being globally recognized as an employer gives you a competitive advantage over your competition. What’s more, when skilled professionals from all over the world want to work for you, you know you’re doing something right.

A PEO service that operates in Guatemala will know exactly which statutory benefits you’re required to fulfill as an employer and what you can offer beyond those legal requirements to attract and retain ideal candidates.

Cut out unnecessary costs

Without the help of PEO services in Guatemala or elsewhere, international hiring becomes incredibly expensive. In fact, most enterprise-level corporations actually choose to use a PEO rather than take on international hiring alone simply because it’s much cheaper and virtually effortless. 

Not only would you have to hire your own in-house HR team, but you’d also need to put a local legal team on retainer to ensure you’re properly complying with each country’s local labor laws.

Gain in-depth insights into new global markets

The Central American Common Market has unique regional access to both the Pacific and Atlantic oceans. This puts Guatemala in an advantageous position for trade and investment. 

If you’re looking to gain insight into this market or the surrounding Latin American, US, or Canadian markets, hiring employees in the country is a great way to get that first-hand insight.

Avoid setting up your own legal entity in Guatemala

If you choose to forgo a PEO to hire Guatemalan talent, then you would have to form your own legal entity within the country.

The incorporation process for forming a business entity in another country is long and expensive. It requires the help of a local legal team, not to mention, your physical presence. You’ll also need to factor in travel and accommodations.

It’s not usually recommended to form a business entity in another country unless you plan to physically expand into said country. Otherwise, it’s a waste of time and money. 

PEOs allow you to avoid all of this because they already have legal entities established in various countries for your use. 

Become culturally aware

When hiring internationally, it’s important to understand how your business may be impacted by the various cultural differences. As your partner service, your PEO will ensure that you stay informed of these cultural differences and practices as they pertain to doing business in Guatemala or elsewhere.

For instance, Guatemala is considered to have a collectivist culture. This means they value teamwork, relationships, and loyalty above all.

‍Find out how Skuad can keep you culturally aware and more by getting in touch with us today!

Remain compliant with local labor legislation

Each country has its own legal requirements for what’s expected of employers in regards to employee provisions. If you don’t comply with these legal requirements, your business will end up incurring significant fines and possibly get hit with business bans.

There’s a lot to know about labor laws as they span from payroll to social support contributions. 

Here’s an overview of what that looks like: 

Payroll

• Guatemalan employees are paid in the Guatemalan Quetzal (GTQ).
• The minimum wage is GTQ11.27 per hour.
• The standard workweek in Guatemala is 44 hours, broken up into 8-hour days. Employees may not exceed 12 hours per day.
• The first two months of employment are considered probationary periods in Guatemala.
• Productivity bonuses of GTQ250 per month are mandatory. There is also a mandatory 13th-month salary bonus.
• Notice for termination of Guatemalan employees must be given and severance may be claimed if there was no reasonable cause for the termination.

Tax and employer contributions

Guatemala’s income tax rate is set at either 5% or 7% depending on the employee’s level of income.

Guatemala’s corporate tax rate is currently set at 35%, and employers must also contribute:

• 12.67% of their monthly payroll to social security. 
• 4.83% of their employees’ monthly salary to social security.

Paid Leave

• Employees are entitled to 5 days of paid sick leave each year.
• Women receive 12 weeks of paid maternity leave
• Employees are entitled to 15 vacation days each year

‍Want to learn more about how Skuad’s PEO services can help grow your business? Book a demo right now!

What does it cost to build a team in Guatemala?

Setting up a business in Guatemala involves getting a company registration, which can cost upwards of $10,640. This may not seem like a lot, but you’ll also need to account for the subsequent costs of incorporation which are estimated to be more than half of the initial company registration.

That’s not including the cost of hiring a legal team, travel, accommodations, and so on.

That’s why your best bet is to partner with a PEO in Guatemala. While PEO services vary based on the organization, it’s still much cheaper than forming a business entity. Plus, Skuad can get you started for free, and you can cancel your services with us at any time. 

We also offer PEO services that allow you to onboard and pay international employees beginning at just $19 per month. If you’re an enterprise-level business looking for an employer of record (EOR) in Guatemala, we offer custom pricing. All you have to do is hammer out the details with our sales team.

‍If you’re ready to join forces with a professional organization in Guatemala or elsewhere, we’ll be here to help. You can also book a demo to check out Skuad’s global PEO solutions right Now!