2024 Salary Guide: US vs. Latin America

United States

The US is known for its robust and dynamic business environment, diverse industries, and competitive market. With its strong economy and numerous growth opportunities, it is no surprise that businesses worldwide set up shop in the US. However, with a high cost of living and expensive healthcare and taxes, businesses must also factor in these costs when deciding between local and international remote talent.

Economic Snapshot:

Housing

Given the vast area of the US, housing costs vary greatly depending on the location. New York City, the largest city in the US, has a higher cost of living than smaller cities. As shown in the table below, renting in the second or third most populated cities, Los Angeles and Chicago, is obviously cheaper. Prices also differ based on the location relative to the city center, with NYC displaying the greatest variation between urban and suburban offerings.

Food

Food costs in the US are 2–3 times higher than in LatAm. The daily spend for the recommended minimum amount of food per person is around USD 12.78, which amounts to a monthly recommended minimum of around USD 396.10. Of course, this will vary some depending on location in the US.

Healthcare

The medical costs are incredibly high, with an estimated three-day stay at the hospital costing approximately 30,000 USD. The US is the only developed country without a universal healthcare system. Thus, access to public healthcare is not free. However, the government provides some public insurance options for seniors and low-income individuals through the Medicare and Medicaid programs, which cover most medical expenses. However, the selection of medical health providers under these plans is more limited than private healthcare as co-pays are lower (or non-existent), and many institutions refuse to accept these plans.

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Because not everyone has access to these public programs, many people have to pay for private health insurance. It is estimated that around 60% of Americans pay for some kind of private health insurance. These plans can be paid for by the individuals themselves or sponsored by an employer. The costs for individual health care plans vary greatly. However, on average, they can be anywhere from USD 400 to 800, depending on location and the type of coverage.

Taxes

When it comes to taxes, it is important to note that the US tax system is complex and varies depending on many factors, such as income level, state of residence, and type of business. The corporate income tax (CIT) rate is 21% at the federal level, with additional state taxes ranging from 1% to 12% depending on the state (which are deductible from the federal CIT). The personal income tax rate is 37%, and the individual capital gains tax is 20%. Unlike some LatAm countries, there is no standard value-added tax (VAT) or net worth/wealth tax of any kind.

Argentina

Argentina is known for its rich culture, history, and diverse landscapes. It is also known for its resilience in the face of a fluctuating economy, headlined by the unstable valuation of the Argentine peso. Despite its economic troubles, Argentina has an immense entrepreneurial spirit, making the country home to more than ten unicorns, second in the region only to Brazil. 

Economic Snapshot:

Housing

The cost of housing in Argentina varies depending on the location, with Buenos Aires, the highest-populated city, having the highest cost of living. Cities located in the interior of the country have lower housing costs. In line with this, living in the second or third most populated cities, Cordoba and Rosario, can be much cheaper. Prices also differ based on the location relative to the city center.

Food

The cost of food in Argentina is relatively affordable. Based on a Western diet and the daily recommended minimum amount of calories and nutrients, the cost of food per person in Argentina is USD 4.78 per day or USD 148.26 per month.

Healthcare

Argentina offers both public and private healthcare options. The public healthcare system provides free hospital, medical, dental, and palliative care. It also offers free rehab, medical transport, and prosthetics. 

However, waiting lists for public healthcare can be long, which is why many Argentines opt for private health insurance. In major cities such as Buenos Aires, La Plata, Rosario, Mendoza, Cordoba, and Salta, private healthcare options provide excellent professional care and facilities at a reasonable price, with the most basic plans starting at USD 50 per month.

Taxes

In Argentina, the CIT rate is 35%, and it’s paid in monthly installments. The personal income tax rate is 35%, which is paid in mid-June, following the return filing due date. Meanwhile, the net wealth/worth tax rate is 0.50% to 1.75% for all assets held in Argentina and 0.7% to 2.25% for assets held abroad. The standard VAT rate is 21%.

Brazil

Brazil is the fifth most populous country in the world and the largest country in South America. Brazil also has the highest GDP in LatAm, making it a major player in the global economy. It is home to a large number of multinational corporations and is a popular destination for tourists and business travelers alike. 

Economic Snapshot:

Housing

Similar to its southern neighbor, the cost of housing in Brazil can vary depending on the location and type of accommodation. São Paulo, the largest city in Brazil, has the highest rent prices in the nation. Apartments in Rio de Janeiro and Salvador, the second and third largest cities, respectively, tend to cost much less.

Food

When it comes to food, Brazil offers a variety of options for its residents and visitors. The average minimum cost for a balanced diet per person per day is USD 5.61. As such, each person spends an average of USD 173.80 monthly on food.

Healthcare

Brazil also offers both public and private healthcare options for its residents. The public healthcare system, the SUS, offers universal health coverage and many free services, such as preventive, primary, and maternity care. 

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Nonetheless, public hospitals may be overcrowded and lack the infrastructure and conditions of private hospitals. Private healthcare options are usually offered through employer-provided employee benefits programs. The average cost of medical insurance for the most basic individual plans hovers around USD 55.

Taxes

When it comes to taxes, Brazil has a varied array. The overall CIT rate is 34%, composed of their corporate income tax, IRPJ, at the rate of 25% and their social contribution on net income, CSLL, at the rate of 9%.

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The personal income tax rate is 27.5%, and the standard VAT rate is 18%. Federal VATs (PIS/COFINS) have a combined rate of 3.65% (cumulative) or 9.25% (non-cumulative). Meanwhile, state VAT (ICMS) ranges from 17% to 20% (lower rates apply to inter-state transactions, varying between 4%, 7%, and 12%).

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The municipal service tax (ISS) ranges from 2% to 5% (cumulative). 

Colombia

Colombia, located in the northwest corner of South America, is renowned for its lush rainforests, vibrant cities, and diverse wildlife. In spite of its reputation for political instability and security issues, Colombia has been making significant strides in recent years to improve its economy and infrastructure.

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The country’s efforts to attract foreign investment and encourage entrepreneurship have led to a growing number of successful businesses and a thriving startup scene. Additionally, Colombia’s diverse population and growing middle class have made it a popular destination for international companies looking to expand their operations in the region.

Economic Snapshot:

Housing

In Colombia, rent prices don’t differ much from city to city. Like in most of the cities in the region, in Bogotá and Medellin, the largest and second largest Colombian cities, respectively, suburban apartments are much cheaper than those in the city center. However, Barranquilla is an exception. Rent for centrally-located apartments is cheaper than rent for apartments outside the city center.

Food

The daily food budget for a basic diet is approximately USD 4.03, which amounts to USD 124.94 per person per month. 

Healthcare

Colombia has both public and private healthcare options. Unlike its South American neighbors, access to public health is not 100%. Under the public insurance system, called EPS, the co-pay rates range from USD 1 to 11.15, depending on income. Out-of-pocket costs for a doctor’s appointment without any insurance in the public sector could amount to USD 50 per visit.

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In private health facilities, patients can access services with shorter wait times and direct access to specialists. The cost of health insurance plans to access these facilities range from USD 50 to 100 per month. 

Taxes

The CIT rate in Colombia is 35%, which is paid between April and May in two or three installments (depending on the amount owed). The personal income tax rate is 39%, which is due between August and October, depending on the worker’s tax ID. Meanwhile, the standard VAT rate is 19%.

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Unlike some of its neighbors, individuals don’t have to pay any net worth or wealth tax.

Mexico

Mexico is a vibrant and culturally rich country. It is the 11th largest economy in the world and has a growing workforce of over 58 million people. Despite its large population, Mexico still faces challenges like income inequality and low wages in certain sectors.

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Regardless of these challenges, Mexico has a thriving job market with many opportunities for professionals in various fields.

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Although the cost of living in cities like Mexico City, Monterrey, and Guadalajara is relatively higher than in the rest of LatAm, the average salary in Mexico is still low compared to the US. As such, many qualified professionals seek remote international opportunities to earn a comfortable living. 

Economic Snapshot:

Housing

Out of the countries we explored in this guide, Mexico has the highest rent prices in the LatAm region. Unlike most of its southern neighbors, the costs do not increase the bigger the city, with Monterrey having the highest rent in the country. There is also a big variation in prices when comparing urban to suburban options. 

Food

Similar to rent, Mexico has the most expensive food in LatAm. A person needs to spend around USD 8.34 on food to cover the daily nutritional requirements. Thus, the minimum monthly amount spent on food per person is USD 258.48. 

Healthcare

Mexico has a mixture of public, private, and employer-funded healthcare systems. Depending on which program someone is enrolled in, the employer-sponsored IMSS or the Seguro Popular for those on low incomes or pre-existing conditions, the medical care may be free or at a low cost. 

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For those who do need to pay, the costs vary based on various factors (e.g., medical institution or type of specialist). For example, an emergency room visit can cost between USD 15 and USD 25, and a doctor’s consultation will cost around USD 18. The average cost of private healthcare per month is USD 142, with an annual deductible of approximately USD 5,000.

Taxes

In Mexico, the CIT rate is 30%, and the personal income tax rate for residents is graduated at progressive rates up to 35%. For non-residents, it varies depending on the type of income, with salaries being taxed at progressive rates up to 30%. The standard VAT rate is 16%. 

Peru

Peru offers a relatively low cost of living compared to other countries in the region. With a diverse culture and rich history, it has become a popular destination for those seeking new business opportunities.

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Despite being one of the fastest growing economies in LatAm, the cost of living remains low, making it an attractive option for those looking to hire talent based in Peru. With a well-developed infrastructure, access to natural resources, and a growing middle class, Peru offers a stable and growing business market.

Economic Snapshot:

Housing

In Peru, the housing market offers a diverse range of options for potential renters. The three largest cities in Peru are Lima, Arequipa, and Trujillo, each offering unique features and attractions. The housing market in these cities varies in terms of availability, location, and cost, making for a varied cost of living across the nation. 

Food

The cost of food in Peru can vary greatly depending on personal preferences and dietary restrictions. However, a daily recommended minimum amount to budget for food in Peru is approximately USD 4.84. This translates to a monthly recommended minimum of around USD 150.12.

Healthcare

Peru offers both public and private healthcare options. Public healthcare is provided by the Ministry of Health (MINSA) and EsSalud, which is obtained through employment. MINSA serves uninsured people and impoverished citizens in rural and urban areas. Meanwhile, EsSalud collects a 9% employer contribution to cover the employed population and their families. 

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As in most LatAm nations, public healthcare has long waiting times, and private healthcare is preferred by those who can afford it. Private healthcare provides good standards, and larger cities have multiple private health clinics. Depending on what the private health insurance policy covers, the prices range from USD 26 to 180 per month.

Taxes

In Peru, the corporate sector is subject to a tax rate of 29.5% on their income. Individuals have a personal income tax rate of 30%. The standard VAT rate in the country is set at 18%.