A friendly guide to hiring housekeepers, caretakers, and gardeners the right way — with real talk on Nicaraguan labor laws, aguinaldo, contracts, and compliance.

From housekeepers to gardeners, here’s what every expat family across Nicaragua needs to know to stay on the right side of the law — and out of trouble.

Thinking of hiring a housekeeper, gardener, or caretaker (aka cuidador) in Nicaragua?

Whether you’re living in San Juan del Sur, León, Granada, or anywhere in between, it’s important to understand your responsibilities as an employer.

Hiring workers in Nicaragua may seem simple — and often inexpensive — but there are legal requirements you must follow. If you don’t, the consequences can include fines, legal action, and even issues with your visa or residency status.

This guide on hiring workers in Nicaragua provides valuable information to help you navigate the complexities of the local labor market.

This expat-friendly guide explains everything you need to know, from Nicaraguan labor laws and contracts to INSS registration, aguinaldo (and the meaning of aguinaldo), and how to protect yourself legally while treating your workers fairly. Once you’re familiar with the laws, you can search for domestic & property staff here.

Domestic Worker or Cuidador? Either Way, You’re an Employer

It doesn’t matter if your housekeeper comes just twice a week or your gardener works part-time — if someone works for you regularly, you are legally considered their employer.

That means you’re required to:

• Pay at least the legal minimum wage
• Register and pay INSS (social security)
• Provide vacation pay
• Pay aguinaldo (yes, it’s mandatory — we’ll explain the meaning below)
• Provide severance pay when the job ends
• Have a signed employment contract
• Offer clear monthly payslips

If there’s ever a dispute and you don’t have proof of payments or a signed contract, Nicaragua’s Labor Department will nearly always side with the worker.

Minimum Wage in Nicaragua (as of May 2025)

Wages vary by job type. These are the official monthly minimums for relevant categories:

These figures are based on a 44-hour week. For part-time workers, calculate a pro-rated salary based on hours worked.

INSS: Social Security for Domestic Workers

INSS (Instituto Nicaragüense de Seguridad Social) is Nicaragua’s social security program.  It covers medical care, maternity, disability, and pensions.
As an employer you must register the worker, pay monthly contributions, and file on time. You can do it yourself or hire a local gestor/accountant.

Two practical ways to set it up

A) You have residency or a Nicaraguan entity (RUC)

• How: Open an INSS employer account and enroll the worker under the Obligatory regime.

• Cost: Taken as percent of wage (employee ~7%, employer ~22%).

• Coverage: Medical + cash benefits + pension (full package).

B) You don’t have residency/company (common in SJDS)

• How: The worker enrolls in their own name under Seguro Facultativo; you reimburse/pay it.

• Two plan choices:

  • IVM only (pension): ~14% of declared base  which is typically around $40 per month for a typical base salary.

  • Integral (medical + pension): ~22.25%, which typically is between $60–70 per month for a typical base salary.

It is important to be aware that Seguro Facultativo plans do NOT include work-accident insurance.  If an employee is injured at work—or even travelling to or from work, the employer is then personally responsible for the medical cover associated with this injury.  The same applies if the employee becomes unwell as a result of a work-related matter.

Aguinaldo – What It Is and Why It Matters

You’ll hear this term a lot, especially as the holidays approach. So what’s the meaning of aguinaldo?

Aguinaldo = 13th month salary

It’s a mandatory Christmas bonus paid to all workers between December 1st and 10th. It equals one month’s average pay over the previous year. Even if a worker has only been employed part of the year, you must pay a pro-rated amount.

If you skip it or pay late? You’re subject to penalties — and your employee can take the matter to the Ministry of Labor.

Vacation Pay: Yes, It’s Required

Under Nicaraguan labor law, domestic workers earn:

15 days of paid vacation for every 6 months worked

It doesn’t matter if someone only works one day a week — they still accrue time proportionally. If the employee doesn’t take the time off, you’ll need to pay out the unused vacation. Keep written records of what was paid and when.

Contracts & Payslips: Protect Yourself (and Your Worker)

Don’t rely on casual verbal agreements. If there’s ever a dispute, you need proof.  From personal experience, if there’s two of you hiring staff, be sure to have both of you entering into the contract as failing to do so can result in you losing your case at the Labour Department!

Always sign a contract:

• Include wage, hours, duties
• Specify if vacation pay is included or extra
• Define whether it’s a temporary or indefinite contract
  
  

Provide monthly payslips:

Include breakdowns for:

• Gross salary
• INSS deductions
• Aguinaldo accrual
• Vacation pay
• Payment date and method

In legal disputes, the absence of records or a contract will count against you — almost always in favor of the worker. Disputes are heard at the Ministry of Labor (MITRAB – Ministerio del Trabajo)

Temporary vs Indefinite Contracts

By default, Nicaraguan labor law considers an unwritten or open-ended job to be permanent (contrato indefinido). That means if you decide to end the arrangement, you may owe severance of one month’s salary per year worked, plus other benefits.

Avoid this by using a temporary contract (contrato por tiempo determinado) — typically 6 or 12 months. You can renew it as needed, but it must be signed and dated to be valid.

When Employment Ends

If you end the working relationship (even if it’s informal), you may be required to pay:

• Severance pay
• Unused vacation time
• Pro-rated aguinaldo

You’ll also need to ensure INSS is up to date. Many expats ask a lawyer or gestor to calculate the final payment to avoid errors.

What If You Don’t Comply?

Here’s what can happen:

• Workers can file a formal complaint with the Ministry of Labor
• You may face fines or penalties
• You could be denied visa renewal or residency approval
• Your reputation in the expat/local community may take a hit.

The labor system is designed to protect the worker. If you’re disorganized, undocumented, or unclear in your agreements, the law will not be on your side, especially as an expat.

Important Considerations When Hiring Domestic Workers in Nicaragua

• Use a written contract from day one
• Always pay at least minimum wage
• Register for and pay INSS
• Keep monthly payslips
• Record vacation days and aguinaldo
• Use temporary contracts if you’re unsure about long-term commitments
• Ask a gestor or local accountant for help if needed

Fair Pay, Legal Peace of Mind

Hiring domestic workers in Nicaragua can be a great help and benefit — to you and to local families. But with that comes responsibility. When you understand and honor Nicaraguan labor laws, you not only protect yourself legally, you build trust and goodwill in your community.

The good news? Doing it right isn’t expensive — just a little paperwork and planning goes a long way.