Professional Employer Organization (PEO) in Puerto Rico

What is a PEO?

A Professional Employer Organization — PEO — is the answer for any organization that wants to expand and start hiring a global team. Essentially, a PEO will handle all the HR, payroll, and onboarding for international staff. That leaves you free to focus on expanding your business and hiring the best possible candidates.

Sometimes the absolute best person for a role is based on the other side of the world, which could seem like a logistical nightmare. Not only do you have to figure out international payroll and onboarding, but you also have to make sure that you’re complying with local employment laws –– or face heavy penalties!

But a PEO will assume all of those responsibilities. When an organization partners with a PEO to help hire a global team, they’ll cover everything: payroll, sourcing and distributing competitive employee benefits packages, and most importantly, ensuring that your business is remaining legally compliant with local labor legislation. 

With the help of a PEO, you can build a global workforce for your organization by hiring all around the world, including in Puerto Rico. If this sounds like something that’d really help your business, get in touch with a friendly team member at Skuad who can answer all your burning questions.

What are the benefits of using a PEO provider in Puerto Rico?

Working with a PEO to onboard and manage your team is your best choice if you're looking to hire in Puerto Rico. As you’ll find out below, partnering with a PEO will open a lot of doors for your business. 

Hire from the best of the Puerto Rican and global talent pool

Of course, you want the best for your business. And that means hiring the best talent. So why limit yourself to only hiring employees in your area code?

Working with a PEO makes it incredibly easy to build a team that’s based all around the world, opening the door to so many new opportunities.

Though Puerto Rico is technically a part of the US, it’s not exactly easy to hire workers who are based there. Employment in Puerto Rico is highly regulated, so you’ll need assistance from experts if you’ve got your eye on a potential employee in PR. 

Become a globally competitive employer

The sign of a really good employer is when there are candidates all around the world applying to work for you. How you treat your employees is a massive indicator of the type of business you’re running. Of course, you can’t have a company without staff, so it’s important to reward them properly. 

A PEO can help you make sure that you’re not only providing statutory benefits for your employees in Puerto Rico but that you’re also offering packages that’ll attract candidates who are the best of the best. 

Gain in-depth insights into new global markets

If you’re considering expanding into the Puerto Rican market, hiring an employee who already knows the ins and outs of the country is the perfect place to start. Hiring staff in the region will give you valuable market insights, but you’ll also then be perfectly poised to expand into surrounding Latin American markets. 

Avoid setting up your own legal entity in Puerto Rico

Say you’re interested in hiring in Puerto Rico, but you decide not to partner with a PEO. First of all, you’d have to incorporate your own legal entity in the country, in order to hire employees on the books. This is going to take many months of hard work, not to mention the costs associated with hiring lawyers who specialize in Puerto Rican employment law. The only way it’d be cost-effective is if you were planning to establish a whole team based in PR.

Using a PEO bypasses the need for your own legal entity. For example, Skuad already has an established presence in PR, and we can hire employees on your behalf. Get in touch if you want to find out more!

Become culturally aware

If you want to be a global company, it’s essential to take the time to be culturally aware when doing business. Again, we know that Puerto Rico is technically part of the US –– but there are some differences to be aware of if you’re hiring staff there.

Your PEO will be across it all, and can keep you informed on the various cultural practices as an employer in Puerto Rico.

For example, did you know that there’s a law that requires employers to pay their staff a Christmas bonus? More on that later.

Ensure that your business complies with statutory requirements in Puerto Rico

Every country has its own intricate — and, admittedly, confusing — labor laws. The last thing you want to do is open yourself up to fines and lawsuits by being non-compliant. 

A professional employer organization in Puerto Rico can help you protect yourself, and treat your employees fairly, by keeping you above board and across all the statutory requirements. This can span from payroll compliance and ensuring that you’re making the correct contributions to social security, to providing the correct minimum number of days off.

Here are some of the specifics that you should know when hiring in Puerto Rico:

Payroll

• Puerto Rican workers are paid in USD, and must be paid weekly or biweekly.
• The overtime pay is 1.5 times the regular pay rate for every hour worked beyond eight hours every day.
• Under the Christmas Bonus Act, employers must pay staff a yearly bonus of 6% of the salary or $600. If you have more than 15 staff, the bonus is 3% or $300.
• The standard probation period is nine months or 12 for managers.

Puerto Rico tax rate and contributions

• The employer tax is about 16.10% of the salary paid to the employees.
• Employee income tax rates are (USD):

• 0- 9,000 - 0%
• 9,000 – 25,000 - 7%
• 25,000 – 41,500 - $1,120 + 14% 
• 41,500 – 61,500 - $3,430 + 25% 
• Over 61,500 - $8,430 + 33%

Leave

• There are 19 public holidays in Puerto Rico — some are the same as the US but others are their own holidays. 
• Employees are entitled to 15 days’ annual leave in a year, which accrued at the rate of 1.25 days for each month. 
• Female employees are entitled to 8 weeks of maternity leave, upon presentation of a medical certificate. 
• Sick leave is provided, with 12 days per year. 

Learn more about how Skuad’s PEO services can help your business to grow by booking a demo today.

What does it cost to build a team in Puerto Rico?

Company incorporation in Puerto Rico

To register as a foreign company in Puerto Rico, you’ll need to reserve a name, establish company bylaws, register with the Chamber of Commerce, and open a corporate bank account. 

Yes, the $150 registration fee is affordable at first glance. But your outgoings are going to mount up pretty quickly — and the cost of doing business in Puerto Rico suddenly spirals out of control. You’ll need comprehensive legal support to navigate Puerto Rico’s business licensing laws and employment regulations –– which could cost hundreds, if not thousands, in legal fees. 

Plus then there’s the cost of banking, the office space you’re registering with, and so on.

Exploring PEO services in Puerto Rico is the other option... 

PEO in Puerto Rico

Different PEO providers have different charges, based on the services they provide. At Skuad we have no start-up fees and you can cancel at any time –– so you can get started today!

Our PEO services will help you onboard and pay employees in Puerto Rico, and the rest of the world, starting at just $19 per month.

We also offer Employer of Record services (EOR) in Puerto Rico if you’re after a more comprehensive package. This means we manage payroll, benefits, and compliance for full-time employees, no matter where they’re based in the world.

For global enterprises, we have tailor-made services with custom pricing –– reach out to our sales team to see how that could work for you.

Keen to book in for a demo?

If it sounds like partnering with a PEO could be a great solution for your organization, book in for a demo of Skuad’s services right away.