Almost 130,000 Zona Franca (Tax Free Trade Zones) employees will receive an 8.25% raise starting on January 1st, 2022.
It’s the last year of the five year triparty wage deal (Government, Unions and Owners Representatives), signed in 2017, that has been providing an annual 8.25% pay raise for 5 consecutive years since January 1st 2018.
The Zona Francas or Tax Free Zones in Nicaragua are created under the Tax Free Law 91 (Ley de Zonas Francas de Exportación) which sets out incentives and the rules that are policed by customs regulators (ADUANA).
Salary – Zona Franca
The minimum wage for Zona Franca employees will go from 6,926 to 7,497 Córdobas per month on January 1st 2022.
At today’s Official BCN exchange rate (tipo/tasa de cambio) of 35.5075 Córdobas to the US Dollar, the Zona Franca salary is US$ 211 per month or US$ 2,534 per annum.
A union spokesman has stated that with bonuses and incentives, the average free zone worker earns 9,500 Córdobas per month (US$ 267.55)
Minimum Wage Categories
There are a total of ten minimum wage categories in Nicaragua. For nine of those, the last wage increase was in March of 2021 when most of them received a 3% increase for the year (until February 2022). The exception was the small, national artisan and tourist industry that only received 1%.
Since the 2018 socio/political crisis, followed by the Covid-19 pandemic, wage increases for the other nine minimum wage categories have been unpredictable.
Adjustments to the minimum wage in Nicaragua in recent years (Source; Dele Peso)
- 2017 – 8.25% increase.
- 2018 – 10.40% increase.
- 2019 – 0% No Increase.
- 2020 – 2.63% increase.
- 2021 – 1% – 3% increase.
By law, the minimum wage must be reviewed twice a year by the tri-party National Minimum Wage Commission, made up of representatives from the government, unions (representing workers) and the private sector. A failure to agree on a wage increase means that the government, through the Ministry of Labor (MITRAB) will declare the minimum wage increase, if any.
The current schedule is that the review takes place in January and February for a March 1st change and in July and August review for the September change, if any.
