You want to know How is the isr calculated?, because it is important for you that at the same time you know what its function is, what it is, the table for the calculation, the percentage that corresponds to it, the income tax withheld and on the income in Guatemala, among other information that is relevant to you whether you are an employee or an employer.
What is the function and how is the isr calculated?
Besides knowing how isr is calculated, you need to know what its function is, because:
- Its main function is to tax the salary and income you receive as a worker.
- Regarding its calculation, it complies with the provisions of the Income Tax Law in its article 96.
- It is a withholding calculated from applying a table to all the income that was obtained in a calendar month.
Step by step how isr is calculated
The calculation will be useful to you whether you are an employer or an employee because in this way you will know if what was deducted from this direct income tax is correct, therefore:
Step 1: As a first step, you must know the table that is taken into account to make the calculation, which considers the lower limit, the upper limit, the fixed fee and the rate (these are the four elements that you must consider when making the calculation):
- From $ 0.01 to the upper limit of $ 496.07, fixed fee $ 0, 1.92%
- From $ 496.08 to $ 4210.41, fixed fee: $ 9.52, 6.40%
- From $ 4210.42 to $ 7399.42, fixed fee: 247.24, 10.88%
- From $ 7399.43 to 8601.50, fixed fee: $ 594.21, 16%
- From 8601.51 to $ 10298.35, fixed fee: 786.54, 17.92%
- From $ 10298.36 to $ 20770.29, fixed fee: $ 1090.61, 21.36%
- From $ 20770.30 to $ 32736.83, fixed fee: $ 3327.42, 23.52%
- From $ 32736.84 to $ 62500.00, fixed fee: 6141.95, 30.00%
- From 62500.01 to $ 83 333.33, fixed fee: $ 15070.90, 32.00%
- From $ 83,333.34 to $ 250,000.00, fixed fee: $ 21,737.57, 34.00%
- From $ 250,000.01 onwards, fixed fee $ 78040.23, 35.00%
What is the percentage of income tax?
- To know What is the percentage of income tax? It is the second step because known as provisional it can be from 1.9 to 35%, it is measured taking into account the previous table according to the lower and upper limits.
- It is also important that you take into account the above table because it is the one that marks the profit range with a percentage that rises according to the income, because the higher the profit, the greater the contribution.
What is the income tax withheld?
- You want to know What is the income tax withheld? Because when you collect your salary, you realize that what you planned to collect was reduced due to the amount of taxes withheld.
- In principle, they are taxes that are far from your control because it is the accountant of the company where you work who is in charge of withholding taxes according to the information you have provided.
- For example, gambling, winnings, commissions, bonuses and pensions are subject to withholding tax.
- The ISR is the percentage withheld by the legal person who has paid you your fees.
- It is a withholding that you will see both in your annual return and in the monthly provisional payment.
- In the case of the annual return, you will pay if it exceeds the amount withheld, since you may discover that you have a balance in favor that will be returned by the Treasury or you will offset it against future ISR payments.
What is the ISR?
- Then What is the ISR? It is a direct tax, the income tax that is obtained in the year.
- Earnings are considered to be the difference between income and deductions that are authorized.
- It is a tax that is paid every month to the Tax Administration Service or to the offices authorized by the states as indicated by law.
What is income tax in Guatemala?
You want to know What is income tax in Guatemala?
- It is the ISR, the income tax that is calculated on profits or income obtained by national patrimonies, national entities, legal entities, individuals and includes foreigners residing in Guatemala or outside of Guatemalan territory.
- The profits subject to the payment of the tax are the lucrative activities that include the commercialization of goods, sale and production of goods, export and provision of services.
- Earnings subject to tax are also those derived from work that implies income in Guatemala or outside the territory.
- It considers profits and capital at all value derived from royalties, leases, money investments, lottery prizes and rental of real estate or furniture among many more.
- Workers with incomes less than 60,000 are not subject to the payment of ISR in Guatemala.
- To calculate the income tax, first of all it is necessary to calculate the net income (the annual income of the worker)
- Then the commissions that the worker received in the year are added.
- When the net income is obtained, the deductions are subtracted (it is a percentage that cannot exceed 5% of the gross income) that are applicable and the taxable income is obtained.
- The deductions are: The fee as a contribution to the Guatemalan Social Security Institute, personal expenses of up to Q48000.00 without verification, life insurance, donations granted to non-profit foundations or associations, scientific or cultural entities, universities, the State , but they must be checked.
- After subtracting the deductions and obtaining the taxable income, the income range is considered.
- In the event that this range is less than Q300000.00, it is taxable and then it is multiplied by 5% and the tax that must be paid is obtained.
- But if that range is higher than Q300000.01, it is taxable and it is multiplied by 7% on the surplus, which is Q300000.00 and even in this case, the fixed amount that is contributed will be Q15000.00.