The Legislative Assembly of the Republic of El Salvador by Decree N° 831 dated November 8th, 2017, exempted for the current year the withholding and payment of the Income Tax to the income that workers receive as year-end bonus according to the provisions of the Labor Code and the Law on Additional Compensation in Cash. This exemption applies to year-end bonuses that do not exceed an amount equivalent to two monthly minimum wages in the commerce and services sector.

In agreement with this decree, the year-end bonuses that exceed two minimum wages will be subject to withholding and payment of the aforementioned tax, however, for its calculation, the two minimum wages mentioned must be deducted.

The amount of the current minimum wage for the commerce and services sector is US$10.00 per day.

This decree will enter into force from the date of its publication in the Official Gazette N° 215, Volume N° 417, dated November 17, 2017.