Cuba Payroll Information – Deel Global Payroll

Updated on: 2025/08/04 14:26 (UTC)

Overview

Cuba, which officially is known as the Republic of Cuba, is a nation of more than 4,000 islands located in general to the immediate north of the Caribbean Sea, to the southeast of the Gulf of Mexico, and to the southwest of the broader Atlantic Ocean. The primary component of the country of Cuba is the eponymous island of Cuba, which by far is the largest and most populous island of Cuba. Among the country’s other islands, the largest and most populous is the Isle of Youth (Isla de la Juventud), which is to the southwest of Cuba’s capital city of Havana. Cuba is considered a communist state and has been ruled by the Communist Party of Cuba since 1959. Many countries are located within 200 kilometers of Cuba, including the United States and The Bahamas to its north, Haiti to its southeast, Jamaica to its south, and Mexico to its west. Additionally, the British Overseas Territory of the Cayman Islands is located within 200 kilometers of Cuba to its south.

Cuba consists of 16 first-order administrative divisions including 15 provincias named Artemisa, Camaguey, Ciego de Avila, Cienfuegos, Granma, Guantanamo, Holguin, La Habana, Las Tunas, Matanzas, Mayabeque, Pinar del Rio, Sancti Spiritus, Santiago de Cuba, and Villa Clara and one special municipality called Isla de la Juventud.

Relations between the U.S. and Cuba are developing, as are diplomatic and commercial ties. As a component of this new direction, the U.S. State Department has rescinded Cuba’s designation as a State Sponsor of Terrorism and officially restored diplomatic relations. Despite the improved ties, an embargo on Cuba that was mandated by the U.S. Congress bars major commercial ties from developing between the two countries.

Cuba’s system of currency involves two currencies, the Cuban national peso and the Cuban convertible peso.

Branches of foreign companies doing business in Cuba must comply with Resolution No. 11 of the Ministry of Labour and Social Security, which requires that no Cuban citizen or permanent resident in Cuba may work at an office or branch of a foreign firm, except through an employment relationship with the Commercial Employment Recruiting Agency (Agencia de Contratación a Representaciones Comerciales, abbreviated as ACOREC, S.A.), a state employment agency that establishes wage scales and pays wages directly to the workers. The employer pays a wage bill per worker to the agency, which it in turn pays to the worker.

Cuba has an income tax, assesses social taxes and a payroll tax.

Employers are responsible for adhering to Cuban labor laws pertaining to working hours, paid leave, notice of termination and other provisions.

Foreign workers in Cuba generally are subject to the same tax and labor laws as Cuban nationals, unless otherwise provided by law. Nonresidents are taxed on their Cuban-sourced income while Cuban residents are taxed on their worldwide income.

For foreign investors the applicable statutes are Law No. 118 and Resolution No. 16/2014 of the Minister of Work and Social Security, entitled “Regulations on the Labor System under Foreign Investment.” Cuba’s Special Development Zone of Mariel has investment incentives for foreign companies, and some of these incentives involve taxation provisions regarding employer-employee relationships in the zone that differ from those generally in effect in Cuba.

Applicants granted access to the U.S. are not lawful permanent residents, but are eligible to work upon arrival. In addition, parolees are eligible to apply for a green card (lawful permanent residence) in the U.S. one year after their arrival.

CURRENCY DETAILS

With regard to currency, Cuba is unique among countries in that it has two official currencies, the Cuban national peso (CUP), which also is referred to simply as the Cuban peso and also is known as the national currency (moneda nacional), and the Cuban convertible peso (CUC), which also is referred to simply as the convertible peso. The government of Cuba announced in 2013 that it plans to eventually fuse the two currencies into one. The internationally recognized three-letter currency code for the Cuban national peso is CUP and the internationally recognized three-letter currency code for the Cuban convertible peso is CUC, and both of these currency codes are among the commonly used currency symbols for their respective currencies. The Cuban convertible peso often is referred to in Cuba by its three-letter currency code, which in Cuba commonly is pronounced as “KOOK.” The plural forms of the names of the currencies are Cuban national pesos and Cuban convertible pesos.

The Cuban convertible peso has a fixed exchange rate ratio with the U.S. dollar of 1 to 1 according to the Central Bank of Cuba (Banco Central de Cuba), which determines exchanges rates for the Cuban convertible peso with multiple other currencies. The Cuban national peso is worth less than the Cuban convertible peso, and according to the Central Bank of Cuba, an exchange of Cuban convertible pesos for Cuban national pesos at a bank office in Cuba results in acquisition of 24 Cuban national pesos for every one Cuban convertible peso submitted for exchange, whereas an exchange of Cuban national pesos for Cuban convertible pesos at a bank office in Cuba results in an acquisition of one Cuban convertible peso for every 25 Cuban national pesos submitted for exchange. Despite the aforementioned exchange rates, the Central Bank of Cuba requires government entities in their accounting statements to treat Cuban national pesos as if they have the value of Cuban convertible pesos.

Local businesses typically pay workers in Cuban national pesos, and the progressive income tax brackets for residents of Cuba are based on amounts of Cuban national pesos. Foreign businesses operating in Cuba, particularly in the Special Development Zone of Mariel, typically pay workers in Cuban convertible pesos, although these payments generally are not directly provided to the workers and instead are provided to the government-run employment agency ACOREC, which retains a percentage of the payment and provides the remainder to the workers in the form of Cuban national pesos. Usability of Cuban national pesos is focused upon acquiring basic necessities from stores that are operated either directly or indirectly by the government, whereas usability of Cuban convertible pesos is focused upon acquisition of luxury items. The export of Cuban convertible pesos is strictly prohibited by the government of Cuba.

When an amount of Cuban national pesos is written using the currency symbol CUP and when an amount of Cuban convertible pesos is written using the currency symbol CUC, the symbol follows the numerical value with a space between the numerical value and symbol.

In Cuba, amounts of Cuban national pesos and amounts of Cuban convertible pesos are commonly written using the general dollar currency symbol $, which in addition to being used for all dollar currencies is used for some, but not all peso currencies. When an amount of Cuban national pesos and when an amount of Cuban convertible pesos is written in Spanish using the currency symbol $, the symbol precedes the numerical value with a space between the numerical value and symbol. The currency symbols CUP$ and CUC$ have the same placement treatment as the currency symbol $ for respective use in writing amounts of Cuban national pesos and Cuban convertible pesos.

When an amount of Cuban national pesos is written using the currency symbol , which is predominantly used as the currency symbol for the Philippine peso, and when an amount of Cuban national pesos is written using the currency symbol $MN, which abbreviates the Spanish term moneda nacional that is synonymous with Cuban national peso, the symbol either precedes or follows the numerical value with a space between the numerical value and symbol.

One hundredth ( ¹ ⁄ ₁₀₀ ) of a Cuban national peso is referred to as a centavo, with the plural form of centavos, and these terms as well are used for the applicable fractions of a Cuban convertible peso.

When amounts of Cuban national pesos and amounts of Cuban convertible pesos are written in Spanish, the comma that in English separates the thousands place from the hundreds place instead is generally rendered as a dot (.), and the dot that in English separates the ones place from the tenths place instead is rendered as a comma, although in Cuba, the thousands place and hundreds place sometimes are separated by a space instead of a dot as generally is used in Spanish.

TAXES

The national government generally enacts laws relating to income tax, social tax, and payroll tax.

The tax year is the calendar year, Jan. 1 through Dec. 31.

Income taxes are a relatively new concept in Cuba, where the vast majority of people are employed by the government.

Income Taxes

Income tax is administered by the National Office of the Tax Administration (Oficina Nacional de Administración Tributaria, abbreviated as ONAT), an agency under the scope of the Ministry of Finance and Budget (Ministerio de Finanzas y Precios, abbreviated as MFP).

Coverage: Residents are taxed on all sources of income, domestic and international. According to Cuban law, a resident is defined as an individual residing in the country for more than 180 days in the tax year. Nonresidents are taxed only on their income from Cuban sources.

Employees: According to the labor law, employees are those who subordinately work for a legal or natural person for remuneration, enjoying labor rights and social security.

Rates and Thresholds: Income tax rates are levied on a progressive scale for residents, with rates ranging from 15 percent to 50 percent. In the country’s progressive income tax system, portions of an individual’s income are allocated to the country’s personal income tax brackets, and each portion of income allocated to a tax bracket is taxed at the tax rate applicable to that tax bracket.

Cuba’s personal income tax rates and minimum and maximum amounts of annual income for each tax bracket are as follows:

Range of Monthly Income (Cuban National Pesos)	Income Tax Rate
Up to 10,000 CUP	15 percent
More than 10,000 CUP and up to 20,000 CUP	20 percent
More than 20,000 CUP and up to 30,000 CUP	30 percent
More than 30,000 CUP and up to 50,000 CUP	40 percent
More than 50,000 CUP	50 percent

Nonresidents are assessed a flat income tax rate of 15 percent on employment income for work they performed in Cuba.

Income Tax in the Special Development Zone of Mariel (SDZM): Cuba established the Special Development Zone of Mariel (Zona Especial de Desarrolo Mariel, abbreviated as ZED Mariel) in 2013, and it is an area of about 180 square miles that is about 30 miles west of Havana, the capital city of Cuba. ZED Mariel, which also is known as the MDZ, is a special investment enterprise zone designed to attract foreign investment.

Employees working in ZED Mariel must, as a general rule, be permanent residents in Cuba, whether they are Cubans or workers originally from abroad. Instead of the progressive income tax rates that are generally applicable for residents of Cuba, employees ZED Mariel must pay 5 percent in income taxes.

Registration: Before starting operations, joint ventures, foreign and national investors have a term of 30 days from the notification of the authorization to submit necessary documentation. Within 30 days of this date, the deeds will be entered in the Business Register.

Taxable Amounts: Salaries, wages, bonuses, and cash in kind are considered income and are taxable. Allowable deductions include income from pensions, compensation paid by insurance, family support and work travel.

Withholding Methods: The state employment agency, ACOREC, collects from the employer a percentage of the basic wage each month for taxes.

Returns and Remittance: Advanced payments by taxpayers and retainers must be remitted by the 20th of the month following the month in which remuneration was paid.

Employers and individuals are required to submit annual taxes returns on or before April 30 of each year. Filing returns is mandatory, even when amounts are exempted from taxes.

Recordkeeping: Employers are required to keep tax related materials for five years.

Penalties: Failure to pay taxes may result in fines of 30 percent of the amount due. Late payments may result in a penalty of anywhere from 50 CUP to 5,000 CUP.

Social Taxes

Social insurance is administered by the Directorate of Social Assistance and Social Services and the National Institute of Social Security under the oversight of the Ministry of Labor and Social Security.

The social security system manages illness, accident, maternity, invalidity and old age insurance benefits.

Coverage: All salaried workers of the state are covered by social insurance.

Rates and Thresholds: Employers must contribute 14 percent of gross payroll.

A social security tax is not generally assessed on employees, but employees in ZED Mariel are assessed a social security tax rate of 5 percent of wages.

Registration: Employers are required to register with the Taxpayer Registry to obtain a tax identification number within 15 days of receiving work authorization.

Taxable Amounts: Wages, salaries and any form of remuneration accrued by an employee is taxable.

Withholding Methods: The state employment agency, ACOREC, will make all statutory deductions from the amount paid by the foreign company, including social security and pensions.

Returns and Remittance: Institutions should retain and contribute social security to bank branches corresponding to their offices by the 10th of the month following the month in which remuneration was paid.

Recordkeeping: Employers are required to keep social tax related materials for five years.

Penalties: Failure to pay taxes may result in fines of 30 percent of the amount due. Late payments may result in a penalty of anywhere from 50 CUP to 5,000 CUP.

Other Taxes

There is a payroll tax for use of wage labor, which Cuban and foreign companies must pay to the employment agency, ACOREC, of 25 percent. This rate also applies to wholly foreign capital companies. The tax is calculated based on total wages, salaries and other remuneration. The rate for joint ventures is 11 percent.

There is no tax on the use of labor in ZED Mariel.

State/Jurisdiction Taxes

Taxes on employment income are not assessed by any of Cuba’s provincias, municipality or local jurisdictions..

COMPENSATION AND BENEFITS

The Labor Law in Cuba covers minimum wage, overtime, hours of work, holidays, leave, wage payment and termination pay. Workers’ compensation and retirement plans are covered under social taxes.

The Labor Law is administered by the Ministry of Labor and Social Security.

Minimum Wage

The current minimum wage in Cuba is 225 CUP per month.

Overtime

Overtime is any time worked in excess of normal working time. Employees may not work more than four hours of overtime on two consecutive days or 160 hours of overtime in one year.

Hours of Work

The Labor Code provides for an eight hour work day with a limit of 44 hours per week.

Employees are entitled to a full day of rest per week and at least seven calendar days of paid annual leave.

Holidays

The public holidays, paid by the employer and specified in the Labor Law, are:

Jan. 1: Anniversary of the Revolution
Jan. 2: Victory of Armed Forces Day

May 1: International Workers’ Day
July 25: Day Before the Asalto al cuartel Moncada (Assault on the Moncada Barracks)
July 26: Day of National Revolt
July 27: Day after the Asalto al cuartel Moncada
Oct. 10: War of Independence
Dec. 25: Christmas
Dec. 31: New Year’s Eve

Leave

Employees are granted 30 days of paid leave for each 11 months of work.

Maternity Leave: Employers must give pregnant employees 18 weeks (six before the birth and 12 after) at full remuneration.

Parental Leave: Employers must give employees between 12 weeks up to a year of leave at 60 percent of salary.

Wage Payment

Wages are disbursed by the state employment agency, ACOREC. Remuneration must be made in Cuban national pesos or in Cuban convertible pesos.

Compensation in ZED Mariel is to be paid to a designated Cuba entity that pays the salaries of contracted employees in Cuban national pesos.

Bonuses and Special Benefits

Cuba does not mandate employers to provide bonus payments to employees.

Termination Pay

Employers and employees may break a working contract with the following notice: up to 30 days for permanent contracts; up to 15 days for temporary contracts. Employees are entitled to wages for work done, including annual paid leave and social security contributions that correspond with those days.

Workers’ Compensation

Workers’ compensation is covered under social taxes.

Recordkeeping

Cuba’s compensation and benefit recordkeeping laws could not be confirmed.

FOREIGN WORKERS

Joint ventures and other forms of association must employ labor through state-run companies, paying pre-determined wages in convertible currency. The hiring organization then pays Cuban workers in Cuban national pesos. Employers must use Cuban citizens and residents for all positions, with very few exceptions. Exceptions include members of a management board or administration. Employers usually are unable to select their own employees.

Visas: Foreign workers that want to pursue professional employment must apply for a work permit from the National Work Permit Office of the Cuban Ministry of Labor and Social Security. The work permit corresponds to the temporary resident immigration status granted by the Immigration and Nationality Directorate of the Ministry of Interior.

The maximum duration of the work permit is up to one year from the date of issue.

One the work permit is acquired, the Immigration and Nationality Directorate of the Ministry of Interior can grant temporary residence.

A tourist card for a single stay of up to 30 days or a business visa may be issued by the Business Division of the Cuban Interests Section.

Taxes: Foreigners who do not permanently reside in Cuba are subject only to a 15 percent personal income tax on their earnings in Cuba.

Wages/Payments: Workers must be paid in Cuban national pesos or Cuban convertible pesos.

WORKING IN THE UNITED STATES

Generally, Cuban refugees are considered parolees upon arrival in the U.S., classified as nonresident aliens, and should be taxed as such until they become lawful permanent residents or green card holders. Parole is an immigration benefit provided to select Cuban citizens by the U.S. Citizenship & Immigration Services (USCIS) under the Cuban Family Reunification Parole Programs (CP1) and the Family-Based Parole Program (CP3). Applicants granted access to the U.S. are not lawful permanent residents, but are eligible to work upon arrival. In addition, parolees are eligible to apply for a green card (lawful permanent residence) in the U.S. one year after their arrival.

Most Cubans enter the U.S. on a B-2 tourist visa. Since August 2013, the U.S. State Department sets the maximum validity of B-2 visas at five-years, with multiple entries for qualified Cuban nationals. However, Cuban citizens entering the U.S. under this visa are not authorized to work.

TREATY ARRANGEMENTS

Cuba has not entered into an income tax treaty or totalization agreement with the United States.

The countries with which Cuba has a bilateral income tax treaty in effect are Austria, Barbados, China, Portugal, Qatar, Russia, Spain, Venezuela, and Vietnam.

Cuba has totalization agreements for social tax purposes with more than 20 countries. Countries with which it has agreements are Andorra, Argentina, Bolivia, Brazil, Chile, Colombia, Costa Rica, Dominican Republic, Ecuador, El Salvador, Guatemala, Honduras, Mexico, Nicaragua, Panama, Paraguay, Peru, Portugal, Spain, Uruguay, and Venezuela.

RESOURCES

All resources are in English unless otherwise noted.

General

U.S. State Department: U.S. Relations With Cuba

CIA World Factbook: Cuba

Cuban Chamber of Commerce (Spanish)

International Labour Organization

Cuba’s Foreign Investment Act

Currency Details

International Organization for Standardization: Currency Codes - ISO 4217

Unicode Consortium: Currency Symbols

United Nations: United Nations Terminology Database: Cuba

Taxes

Ministry of Finance and Prices (Spanish)

Compensation and Benefits

Cuba’s Maternity Law (Spanish)

Cuba’s Official Gazette

Labor Law (Spanish)

State Department

Foreign Workers