With the inauguration of 2025 in Guatemala, the new minimum wage for each constituency took effect on 1 January, as established Governmental Agreement No. 264-2024. Additionally, changes to VAT for small taxpayers are expected to be introduced in March. As a result, both workers and businesses must stay informed about the updates made by the government on tax matters.

The minimum wage 

Minimum wages are now defined by two economic districts (EC). EC1, which covers the Department of Guatemala, while EC2 covers the rest of the country’s departments. Wages are divided by three economic activities: agricultural; non-agricultural; and exporting and Maquila.  

Thus, by economic sector and district, agricultural activities see their daily and monthly wage increased by 10%. Thus, in the EC1 zone this daily limit rises to Q118.14 ($15,47); and to Q3,593.55 ($470,64) per month. In EC2 the thresholds are lower, so it is Q112.99 ($14,79) per day and Q3,436.86 ($450,11). Then, the non-agricultural sectors will also grow by 10%: to Q122.40 ($16,03) per day and Q3,723.05 ($487,60) per month in EC1. As for EC2, the values amount to Q116.73 ($15,28) and Q3,550.60 ($465,01), respectively.   

The economic activity that has grown the least has been that of exports and Maquila, barely 6%. Therefore, the lowest values of the three are maintained here. Their situation in EC1 grows to Q107.79 ($14,12) per day and Q3,278.59 ($429,39). Thus, in EC2 it exceeds Q100, because it remains at Q101.83 ($13,34) and Q3,097.21 ($405,63).   

The VAT reform 

The VAT system for small businesses is expected to change later in the year, with the new regulations set to take effect by the end of the first quarter. The VAT Law Decree 27-92 defiens two VAT regimes: 

  • General regime: taxes 12% of the difference between the tax credit and the tax debit. 
  • Small taxpayer regime: taxes 5% on the invoiced amount.  

According to Article 45 of the VAT Law, the latter has a maximum limit for annual invoicing of Q150,000 ($19.380). This new decree seeks to modify this limit and increase it. 

The Decree 31-2024 stipulates that the new amount will no longer be a fixed limit but a variable one, as it will be directly tied to the minimum wage. For the 2025 tax year, the new annual limit for the Small Taxpayer Regime is set at 125 minimum wages. Therefore, given that the new minimum wage is Q3,723.05 ($481,02), the new limit for the Small Taxpayer Regime will be Q465,381.25 ($60.127,26). 

This year sees the introduction of new tax developments in Central America. Therefore, if you would like to manage your company’s payroll in Guatemala, or in other countries in the region, do not hesitate to contact Auxadi. 

Can Auxadi help?

Auxadi can become your ideal partner. We offer a one stop shop value added outsourcing services in the areas of accounting and reporting, tax compliance, payroll management and representation services, among others.

Local Knowledge – International Coverage

Founded in 1979, Auxadi is a family-owned business working for multinational corporations, private equity funds and real estate funds. It’s the leading firm in international accounting, tax compliance and payroll services management connecting Europe and the Americas with the rest of the world, offering services in 50 countries. Its client list includes many of the top 100 PERE companies. Headquartered in Madrid, with offices in US and further 22 international subsidiaries, Auxadi serves 1,500+ SPVs across 50 jurisdictions.

All information contained in this publication is up to date on 2024. This content has been prepared for general guidance on matters of interest only, and does not constitute professional advice. You should not act upon the information contained in this chart without obtaining specific professional advice.No representation or warranty (express or implied) is given as to the accuracy or completeness of the information contained in this content, and, to the extent permitted by law, AUXADI does not accept or assume any liability, responsibility or duty of care for any consequences of you or anyone else acting, or refraining to act, in reliance on the information contained in this chart or for any decision based on it.