Salary Guidelines and Taxation in Ecuador ​

Year-End and Mid-Year Bonuses ​

Ecuadorian law mandates the disbursement of both a 13th and a 14th-month salary. Employers are obligated to issue the 13th-month salary by December 22nd. The 14th-month salary, equivalent to the national minimum wage, is due either in March or August.

Tax Liabilities in Ecuador ​

Taxable income in Ecuador primarily focuses on revenue generated from activities conducted within the country. Incomes sourced from abroad are tax-free for Ecuadorian residents, provided that they have already been subject to taxation in a foreign country. However, incomes from low-tax jurisdictions are exceptions to this rule.

For non-residents, a 25% income tax rate is applicable to any Ecuador-sourced income, regardless of their permanent residence. Additionally, occasional earnings by non-residents that aren't billed to an Ecuadorian entity are not taxable.

Foreign nationals with resident visas are taxable on all their incomes and cannot claim exclusion for periods they are away from Ecuador.

Income Tax Rates for 2023 ​

The income tax structure is progressive, with different brackets for varying levels of income, expressed in USD:

• Up to $11,722: 0%
• $11,722 to $14,935: 5% (no base amount)
• $14,935 to $18,666: 10% (base amount $161)
• $18,666 to $22,418: 12% (base amount $534)
• $22,418 to $32,783: 15% (base amount $984)
• $32,783 to $43,147: 20% (base amount $2,539)
• $43,147 to $53,415: 25% (base amount $4,612)25% (base amount $4,612)
• $53,415 to $63,876: 30% (base amount $7,203)
• $63,876 to $103,644: 35% (base amount $10,312)
• Over $103,644: 37% (base amount $24,231)