Disclaimer: This article is not a substitute for legal nor accounting advice. Look for professional advice before you take action.
Are you a senior developer/engineer based in Colombia? Did you know that by working remotely for companies in the US you can enjoy a great salary, flexible work hours, and many other benefits?
At Nexton, we specialize in helping LATAM-based developers find the best remote software engineer jobs in the US. In this article, we’ll teach you all you need to know about taking on remote work in Colombia.
What Is A Remote Work Contract?
As a remote worker who works for a US company, you’ll typically sign a remote work agreement with your employer. While these contracts obviously vary depending on the specifics of the job and your particular agreement with the employer, they’ll usually outline;
- Eligible reimbursements.
- Compensation and benefits.
- Necessary equipment and services (which usually come at expense of the remote worker).
- The work arrangement (type of work to be done, core work hours or deliverables, key metrics to measure employee performance, mandatory meetings, etc).
Note that some companies hire remote workers on a per-project basis and sign short contracts/proposals that end once a project is completed. Some remote workers also choose to work as freelancers and work for multiple clients at the same time, sometimes without ever signing a contract with the employer. At Nexton, however, we set our talent up with long-term remote jobs governed by remote work contracts.
How To Pay Your Taxes As A Remote Worker In Colombia?
As a remote worker, you are typically responsible for managing your own taxes (unless the agreement you’ve signed with your employer says otherwise).
Under Colombian employment law, all individuals generating income within Colombia are required to pay income tax. As an individual remote worker, you are eligible to pay personal income taxes, whereas remote contractors operating as a business are required to pay corporate income tax.
As of 2006, Colombia uses a taxing unit called Unidad de Valor Tributario or UVT. At the time of writing this article, 1 UVT is equivalent to 36,308 Colombian pesos*. Colombia also has a tax threshold for remote workers, which is 1090 UVT (39,575,720 pesos) per fiscal year**. Any remote workers making less than this amount are exempt from paying taxes.
Remote workers in Colombia should register as monotributistas with the National Directorate of Taxes and Customs (DIAN) and pay a fixed monthly tax rate relative to their income. To find out more about Colombia’s monotributo and calculate your taxes based on your income, click here.
* At the time of writing, 1 Colombian peso = 0.00026 US dollars.
** The Colombian fiscal year is the same as the calendar year.
Do Colombian Remote Contractors Need US Work Visas?
Remote workers do not need a US visa in order to work remotely for American companies. As long as they are not actually located within US territory, remote workers aren’t subject to the same employment laws and regulations as employees working within the US.
Remote workers have a lot of options when it comes to managing their payments. Receiving an international bank transfer is obviously one of the most common ways to get paid remotely, but receiving international payments in a foreign currency can leave you subject to some banking fees.
In order to avoid these fees, consider looking into online payment platforms like Paypal, Payoneer, and Skrill. All three platforms allow remote employees to create online wallets and companies to make payments to foreign contractors for services such as software engineering and coding. In Colombia, users of these services may also be eligible to receive free Visa or Mastercards to easily access their funds in their virtual accounts.
Alternatively, if you prefer to get paid via bank transfer to your local Colombian bank account, consider using Wise (previously Transferwise) to help minimize some of the international transfer fees and enjoy better exchange rates.
Find Your Dream Job Today
As a senior software engineer, there’s never been a better time to look for remote work. As more and more companies embrace more flexible work arrangements, you now have the ability to take on remote payroll jobs at top US companies. Contact us today to kickstart your search for the best remote engineering jobs across the US, and remember to check out our blog for more content like this.