The Constitutional Chamber of the Supreme Court of Justice (CSJ) of Honduras has recently declared the Framework Law on the Social Protection System (decree number 56-2015) to be unconstitutional. This decision means the Framework Law is repealed, and results in changes to the Private Contributions Regime (RAP – the institution that collects and administers worker/employer contributions to provide its members with financial services that improve their quality of life).
Firstly, generation of the RAP contribution forms according to the Framework Law is suspended, along with worker/employer contribution payments for pensions and severance, leaving the payment corresponding to the month of March 2022 as the last contribution form (contribution document) and mandatory payment.
Due to this repeal, the RAP Law (Legislative Decree 107- 2013) again requires contributions to the Housing and Financial Inclusion Fund in the April 2022 payroll. RAP will collect worker/employer contributions in accordance with the RAP Law. It is important to note that a recalculation must be made for the deduction applied to employees in the payrolls paid in the month of April. Since the monthly contribution must be made, employers must deduct the outstanding value to the employees – RAP should be calculated on 100% of the ordinary monthly salary.
The April 2022 collection will be carried out under the following guidelines:
- Legislative Decree 107-2013 establishes the employer’s obligation to withhold and send the employer contributions and the contributions of the workers to the RAP, which will be registered as individual savings accounts in favor of each worker.
- This contribution is calculated on the basis of the total ordinary monthly salary.
- In accordance with article 43 on withholdings and the payment of worker/employer contributions, the company must retain 1.5% of the ordinary monthly salary of each worker for the RAP as the employer’s contribution of 1.5%, until reaching a total of 3% that will be recorded as savings in individual accounts in favor of the worker in their name.
- The company will make the payment to the RAP through the authorized collecting entities, within fifteen calendar days following the withholding.
For more information on how this may affect your Honduran operations or investments, the Auxadi team in Tegucigalpa is at your disposal.
Local Knowledge – International Coverage
Founded in 1979, Auxadi is a family-owned business working for multinational corporations, private equity funds and real estate funds. It’s the leading firm in international accounting, tax compliance and payroll services management connecting Europe and the Americas with the rest of the world, offering services in 50 countries. Its client list includes many of the top 100 PERE companies. Headquartered in Madrid, with offices in US and further 22 international subsidiaries, Auxadi serves 1,500+ SPVs across 50 jurisdictions.
All information contained in this publication is up to date on 2022. This content has been prepared for general guidance on matters of interest only, and does not constitute professional advice. You should not act upon the information contained in this chart without obtaining specific professional advice.No representation or warranty (express or implied) is given as to the accuracy or completeness of the information contained in this content, and, to the extent permitted by law, AUXADI does not accept or assume any liability, responsibility or duty of care for any consequences of you or anyone else acting, or refraining to act, in reliance on the information contained in this chart or for any decision based on it.