How Employers Set Salaries for Remote Jobs in Latin America

A senior software engineer in the US might make $120,000 to $150,000. That same engineer in Colombia or Mexico? You’ll see ranges from $35,000 to $70,000.

That’s not a typo. It’s just reality.

But here’s where employers mess up: they think they can just pay local market rates and call it a day. Or worse, they lowball because “it’s Latin America.”

Neither approach works.

Latin American professionals working remotely for US, UK, or Australian companies aren’t competing with their local market anymore. They’re competing globally.

Sort of.

The real formula companies use

Let’s say you’re hiring a mid-level customer support manager. In the US, that role might pay $65,000.

Step 1: Start with the US baseline: $65,000.

Step 2: Apply a regional factor: 40–50% of US pay = $26,000 to $32,500.

Step 3: Adjust for country:

• Mexico or Chile: aim toward the higher end ($30,000–$32,500)
• Colombia or Peru: mid-range ($27,000–$30,000)
• Argentina: factor in inflation volatility and USD preference

Step 4: Consider the specifics:

• Fluent English? Add 10–15%.
• Managing a team? Add another tier.
• Contractor vs employee? Contractor rate should be 20–30% higher to offset self-employment costs.

You end up with a range. Not a single number.

That gives you room to negotiate based on experience, portfolio strength, and how badly you need to fill the role.

What workers are actually saying

I spend a lot of time reading what Latin American remote workers say in forums and private conversations.

The pay complaints are consistent.

“I’m doing US-level work for local wages.”

Someone takes a remote job excited about the opportunity, then realizes they’re working US hours, handling US-level responsibility, sometimes even managing teams… but getting paid barely above local market rates.

That breeds resentment fast.

Currency risk is eating their savings.

Imagine negotiating a great salary in Colombian pesos or Argentine pesos. Six months later, your currency tanks and your real income dropped 20% through no fault of your own.

This has happened repeatedly in Argentina, Brazil, and Colombia over the past few years.

Workers who’ve been burned by this now demand USD-denominated contracts. Or at minimum, regular inflation adjustments.

What “fair” actually means

Fair doesn’t mean equal to US salaries.

The cost of living in Medellín is not the same as San Francisco. A competitive salary in one place would be wildly expensive in another.

But fair does mean a few specific things.

It means workers can live comfortably in their local context.

Not just survive. Actually build savings, support their family, maybe travel occasionally.

It means recognizing skill level appropriately.

A senior engineer with 8 years experience shouldn’t be paid junior rates just because they live in Peru. You’re not buying location. You’re buying expertise.

It means stability and predictability.

Pay in USD or peg to USD. Set clear inflation review triggers. Don’t let currency swings silently cut someone’s real income.

It means respecting that contractor rates must be higher.

That employee’s company is paying their taxes, their benefits, their equipment, their social security. A contractor covers all that themselves.

A contractor rate should be 25–40% higher than an equivalent employee’s base salary. Minimum.

What most employers actually do

Let’s talk about how companies who are doing this successfully approach compensation.

They start with a US salary band.

Take that software engineer role. If the US range is $120k–$150k, that’s your baseline. You’re not paying that, but you need to know it.

Then they apply a regional adjustment.

This is where employers typically land at 35–50% of US compensation for the same role. Sometimes as high as 60% for senior positions or in-demand specialties.

So that engineer making $120k in the US? In Latin America, you’re looking at roughly $42,000 to $72,000.

Because the next step is country and city adjustments.

Mexico City costs more than Guadalajara. São Paulo costs more than Florianópolis. Santiago costs more than most other cities in the region.

Workers in these major tech hubs expect higher compensation. And honestly, they should get it.

Then comes the contract type.

If you’re hiring someone as a full employee through an Employer of Record or setting up a local entity, you’re providing benefits and stability. The base salary might be lower.

If you’re hiring a contractor, the rate needs to be higher to account for them covering their own taxes, health insurance, equipment, and the lack of job security.

The biggest mistakes to avoid

Paying local rates for global work.

If you need someone to work US hours, speak fluent English, and handle the same workload as your US team, you can’t pay them what a local company in their city would pay.

Ignoring currency and inflation.

Locking someone into a peso or real salary with no adjustment mechanism during high inflation is essentially giving them a pay cut every quarter.

Treating contractors like employees (or vice versa).

If you control their hours, provide their equipment, and manage them like an employee, you’re risking misclassification.

Scheduling over local holidays without premium pay.

Asking a Mexican worker to skip Día de los Muertos or a Brazilian to work during Carnival without extra compensation tells them you don’t respect their culture.