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Taxed Income in Colombia

 
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manholecover



Joined: 14 Oct 2011
Posts: 7

PostPosted: Fri Jan 27, 2012 10:06 am    Post subject: Taxed Income in Colombia Reply with quote

Hi,

I am considering working in Colombia later this year and wanted to know what kind of tax employers take out for foreign employees. Can anybody working in Colombia speak to this question?

For example, if my salary is 1 million pesos per month (to keep things mathematically simple) what would be the net income roughly?


What about living expenses? If I want to live alone in a safe, 1-bedroom condo in one of the big cities, could I expect to pay $500 USD/month, or much more?

Gracias,

MHC
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CarolinaTHeels



Joined: 03 May 2011
Posts: 130

PostPosted: Fri Jan 27, 2012 4:21 pm    Post subject: Reply with quote

I hope you dont plan on eating out, going out, and much other stuff because a 1 bedroom condo in a safe/nicer area is gonna cost a very big chunk of your pay.

Most NETs live with people/together to cut down on the costs/rent.
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spanglish



Joined: 21 May 2009
Posts: 584
Location: working on that

PostPosted: Fri Jan 27, 2012 9:28 pm    Post subject: Reply with quote

It depends on what type of contract you get. If you are hired as an independent contractor (prestación de servicios), you'll get taxes taken out of your paycheck; I think it's about 10%. You'll also pay a mandatory contribution to a private pension fund and for health insurance. On a 'real contract,' where you're contracted to work as an employee of the organization you won't pay income taxes (on an English teacher's salary). On either contract, as an English teacher, you'll typically see 200.000-300.000 pesos taken out of your paycheck.

A 1 bedroom apartment in a decent to nice part of Bogota will run you $500.00 - $700.00 USD (900.000 - 1.3 million pesos) including utilities and building admin costs. You can pay a bit less than that or far more up to nearly London/NYC prices. Keep in mind that that is for an unfurnished place, and you'll typically need to sign a 1 year contract with a co-signer who has their own house and you'll need to pay an extra month's deposit.

Carolina is correct: living alone is probably not practical as an English teacher. When I worked at International House, I knew a couple of teachers who managed to rent their own place, but it was very difficult to do on that salary (1.5 million/month 3 years ago). A teacher at one of the best paying universities in the country has a modest 1 bedroom apartment in a not particularly nice part of Bogota and all his savings go toward flying home once a year.

If you want your own place in a nice part of the city, to visit home once or twice a year, live comfortably (go out every week and travel the country a bit) and save a few hundred dollars each month on top of that, you'll need to earn a bare minimum of 4 million/month. Very few people can earn that without working 2 or 3 jobs and/or taking on a lot of private students.
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MNguy



Joined: 01 Feb 2010
Posts: 124

PostPosted: Sat Jan 28, 2012 10:40 am    Post subject: Reply with quote

Spanlish is spot on, but I will add that in my contracted job (legit, working visa) I recieved some sort of tax rebate in December that amouted to about one month's salary. You are also supposed to get one in July.
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windowlicker



Joined: 05 Jun 2008
Posts: 183
Location: Bogotá, Colombia

PostPosted: Sat Jan 28, 2012 2:36 pm    Post subject: Reply with quote

MNguy wrote:
I recieved some sort of tax rebate in December that amouted to about one month's salary. You are also supposed to get one in July.


What type of contract were you on? If you were under a full contract, that's not a tax rebate. It's called a "prima bonus." Half a month's salary around July and a full month's salary in December.


Another thing to add is that depending on where you are from, you may have to pay taxes in your home country. For example, most countries don't tax you on worldwide income, but the USA does. You should be able to find the rules if you google it, but if you're American, whether or not you pay taxes on earned income in Colombia depends on how much time you spent in Colombia that year (so watch how much vacation time you spend in the USA...it could turn into a VERY expensive vacation if you stay too long), your total income, and a few other factors.
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manholecover



Joined: 14 Oct 2011
Posts: 7

PostPosted: Sun Jan 29, 2012 6:24 am    Post subject: Reply with quote

Thanks for all your replies. I think it would be a full contract with work visa. i was told about the "prima" bonus but didn't know it was tied to gov't tax rebate.

So Spanglish, was the 200-300K of taxes per month a flat estimate or based on the 1 million of income I mentioned? If I made more would they take out more if I'm under contract with the employer?

Thx,

MHC
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