Guatemala
The country profile includes data on the income taxes paid by workers, their social security contributions, the family benefits they receive in the form of cash transfers as well as the social security contributions and payroll taxes paid by the employers. Results reported include the average and marginal tax burdens for eight different family types.
It also describes the personal income tax systems, all compulsory social security contribution schemes and universal cash transfers as well as recent changes in the tax/benefit system.
The national currency is the Quetzal (GTQ). In 2013, the average exchange rate was GTQ 7.86 to USD 1. In that year, the average worker earned GTQ 46 562.97.
The Report includes estimates of the tax wedge over the whole of the income distribution ordered by deciles of total labour income of formal wage earners derived from the household surveys.
1. Personal income tax system
The fiscal year is the calendar year.
1.1. Central government income tax
The personal income tax is applicable to all labour and capital income. Labour income arises from any fee or income derived from personal work carried out under a dependency relationship with the employer either within or outside of Guatemala (Decree 10-2012, Art. 4). When such activities take place within Guatemala, the tax is withheld and treated as an advance on the total amount of the tax liability for the individual taxpayer.
An individual’s tax liability is calculated on his/her total income less the allowable deductions and income exemptions.
Exempt income provisions include:
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The annual bonus paid to workers up to 100% of the ordinary monthly salary or wage.
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Single or periodic payments of indemnities or pensions relating to death or disability caused by accident or illness.
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Severance payments received by workers in both the public and private sector.
1.1.1. Tax unit
Members of the family are taxed separately.
1.1.2. Tax allowances and tax credits
1.1.1.1. Standard tax allowances and tax credits
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A basic allowance of GTQ 48 000.00.
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Employee social security contributions paid to the IGSS.
1.1.1.2. Main non-standard tax allowances and tax credits
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Donations to charitable institutions for which proof can be provided.
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Insurance premiums covering the accidental death of a worker.
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Verified amounts granted to cover travel and expenses both inside and outside the country.
1.1.3. Tax schedule
The annual personal income tax liability was calculated according to the following schedule in 2013:
1.2. State and local taxes
There is no state or local tax levied on wages.
2. Compulsory social security contribution to schemes operated within the government sector
2.1. Employee contributions
Employee social security contributions are levied on the gross wage. The lower threshold is the national minimum wage, which was equal to GTQ 2 363.25 in 2013. The bonus that acts as an incentive to workers in the private sector (GTQ 250) is exempt from contributions. The annual bonus paid to workers at the end of year is also exempt from contributions.
2.2. Employer contributions
Employers are required to contribute to the following public programs.
The employer social security contribution rates are applied to the payroll.
3. Universal cash transfer
3.1. Amount for spouse and for dependent children
None.
4. Main changes in tax/benefit since 2013
None.
5. Memorandum items
5.1. Identification of an AW
The data refer to the earnings of workers within the formal sector. The average worker’s wage was calculated using microdata from the national household surveys.