Guatemala Severance Calculator 2026
Last updated: January 2026
The labor settlement (liquidación) in Guatemala for 2026 is calculated according to the Labor Code and includes several components. Severance pay for unjust dismissal equals one month of average salary (last 6 months) per year of service. Unused vacation is 15 business days per year worked. Proportional aguinaldo and Bono 14 for time worked are added. The daily salary is calculated by dividing monthly salary by 30. For a worker earning the minimum wage of Q4,002.28 with 3 years of service, severance would be approximately Q12,007. Severance is exempt from ISR with no cap on years. In case of voluntary resignation, the worker only receives proportional vacation, aguinaldo, and Bono 14, without severance pay.
FAQ
What does a labor settlement include in Guatemala?
A settlement in Guatemala includes: severance pay (1 month per year, only for unjust dismissal), unused vacation (15 business days/year), proportional aguinaldo, and proportional Bono 14. If you resign voluntarily, you do not receive severance but you do receive the other proportional benefits.
How is severance pay calculated in Guatemala?
Severance equals one month of average salary (calculated on the last 6 months of regular salary) per year of continuous service. There is no cap on years. If you worked partial years, it is calculated proportionally. It only applies for unjust dismissal — not voluntary resignation.
Is vacation paid in the settlement in Guatemala?
Yes. The settlement includes unused vacation: 15 business days per complete year of service, plus the proportional part for the current year. The amount is calculated using the last regular salary. The right to vacation arises after one continuous year of employment.
Does severance pay ISR in Guatemala?
No. Severance for unjust dismissal is exempt from ISR in Guatemala. The proportional aguinaldo and Bono 14 included in the settlement are also exempt. Compensated vacation does not generate income tax either.
What if I'm dismissed without receiving my settlement in Guatemala?
If the employer does not pay the settlement, you can go to the Ministry of Labor and Social Welfare to file a complaint. You can also initiate an ordinary labor lawsuit in the labor courts. The statute of limitations for claiming labor benefits is 2 years from the date of employment termination.