Venezuela Payroll Primer – Deel Global Payroll

Updated on: 2025/01/20 11:49 (UTC)

Overview

Venezuela, which officially is known as the Bolivarian Republic of Venezuela, is located in the northern part of South America, with its mainland bordered to its north by the Caribbean Sea. The countries that share a land border with Venezuela are Guyana to the east, Brazil to the south, and Colombia to the west. The Caribbean Sea island countries of Grenada, Trinidad and Tobago, Aruba, and Curaçao, the latter two of which are constituent countries that are part of the Kingdom of the Netherlands, are relatively close to the coast of mainland Venezuela and are located less than 175 kilometers from the coast. Venezuela’s name in Spanish, the predominant language of the country, is the same as its name in English.

As a federation, Venezuela consists of its capital district of Caracas, 23 states, and numerous federal dependencies. The 23 states of Venezuela are Amazonas, Anzoátegui, Apure, Aragua, Barinas, Bolívar, Carabobo, Cojedes, Delta Amacuro, Falcón, Guárico, Lara, Mérida, Miranda, Monagas, Nueva Esparta, Portuguesa, Sucre, Táchira, Trujillo, Vargas, Yaracuy, and Zulia. All of these states, except Nueva Esparta, are primarily located in mainland Venezuela, while Nueva Esparta is a series of islands located to the northwest of Sucre, with Nueva Esparta’s closest point to the mainland fewer than 15 kilometers afar. Nueva Esparta includes Venezuela’s largest and most populous island, Margarita Island. The federal dependencies of Venezuela consist of numerous islands in the Caribbean Sea. The most populous group of islands within the federal dependencies of Venezuela is Los Roques Archipelago.

Venezuela’s currency is the bolívar soberano.

Employers in Venezuela must withhold income taxes and payroll taxes from employees, and contribute to social taxes on behalf of workers. Employers also are required to uphold standards for compensation and benefits.

Foreign workers are subject to a flat income tax rate and are treated the same as resident workers in most other payroll related issues.

CURRENCY DETAILS

Bolívar Digital (currency in use since Oct. 1, 2021): Effective since Oct. 1, 2021, the currency of Venezuela is the bolívar digital. The currency’s name in English is the digital bolivar. The plural form of bolívar digital is bolívares digitales. The bolivar digital replaced the bolívar soberano, in which amounts of bolívares soberanos were exchangeable for equivalent amounts of bolívares digitales, with 1 bolívar digital equivalent to 1,000,000 bolívares soberanos.

Bolívar soberano (currency in use from Aug. 20, 2018, to Sept. 30, 2021): Effective from Aug. 20, 2018, to Sept. 30, 2021, the currency of Venezuela was the bolívar soberano (Bs.S.), which also was colloquially referred to as the bolívar, although the bolívar fuerte currency it replaced also was colloquially referred to as the bolívar, and although a currency known as the bolívar preceded the bolívar fuerte. The currency’s name in English was sovereign bolivar. The internationally recognized three-letter currency code for the bolívar soberano was VES. The plural form of bolívar soberano was bolívares soberanos.

The bolívar soberano replaced the bolívar fuerte through redenomination, in which amounts of bolívares fuertes were exchangeable for equivalent amounts of bolívares soberanos, with 1 bolívar soberano equivalent to 100,000 bolívares fuertes. Relevant exchange rate data between the bolívar soberano and other countries’ currencies are not available because of the recentness of the redenomination. However, the estimated relative values of amounts of bolívares soberanos compared with other currencies may be calculated by using currency conversion resources for the bolívar fuerte and then dividing the applicable amount of bolívares fuertes by 100,000 to determine the applicable amount of bolívares soberanos.

When an amount of bolívares soberanos is written using the currency symbol Bs.S., the symbol generally precedes the numerical value with a space, or less commonly no space, between the numerical value and symbol, although the currency symbol occasionally is placed after the numerical value with a space between the numerical value and symbol.

Other currency symbols used to refer to the bolívar soberano include Bs.S, Bs.s., BS.S., BsS, Bs S, Bs. S, Bs. S., bss, bss., Bss., BsS., BSS., Bs., Bs, B., and B, and have the same placement treatment as the Bs.S. currency symbol. The currency symbols Bs., Bs, B., and B also are used for the bolívar fuerte and were used for the bolívar currency that the bolívar fuerte replaced.

One hundredth ( ¹ ⁄ ₁₀₀ ) of a bolívar soberano is referred to as a céntimo, with the plural form of céntimos.

When amounts of bolívares soberanos are written in Spanish, the comma that in English separates the thousands place from the hundreds place instead is rendered as a dot (.), and the dot that in English separates the ones place from the tenths place instead is rendered as a comma.

Bolívar fuerte (currency in use until Aug. 19, 2018): Effective until Aug. 19, 2018, the currency of Venezuela was the bolívar fuerte (Bs.F.), which also was colloquially referred to as the bolívar. The currency’s name in English is strong bolivar. The internationally recognized three-letter currency code for the bolívar fuerte is VEF. The plural form of bolívar fuerte is bolívares fuertes.

Hyperinflation of the bolívar fuerte caused evaluation of data regarding black-market exchange rates for the bolívar fuerte to be relevant for determining the currency’s relative value, and some applicable exchange rates of this kind are available from DolarToday.

When an amount of bolívares fuertes is written using the currency symbol Bs.F., which is one among many currency symbols used by Venezuelan governmental entities for the bolívar fuerte, the symbol generally precedes the numerical value with a space, or less commonly no space, between the numerical value and symbol, although some governmental entities occasionally place the currency symbol after the numerical value with a space between the numerical value and symbol.

The other currency symbols used by the Venezuelan government to refer to the bolívar fuerte, which include Bs.F, Bs.f., BS.F., BsF, Bs F, Bs. F, Bs. F., bsf, bsf., Bsf., BsF., BSF., Bs., Bs, B., and B, have the same placement treatment as the Bs.F. currency symbol. The currency symbols Bs., Bs, B., and B also were used for the bolívar currency that the bolívar fuerte replaced.

One hundredth ( ¹ ⁄ ₁₀₀ ) of a bolívar fuerte is referred to as a céntimo, with the plural form of céntimos.

When amounts of bolívares fuertes are written in Spanish the comma that in English separates the thousands place from the hundreds place instead is rendered as a dot (.), and the dot that in English separates the ones place from the tenths place instead is rendered as a comma.

Digital Currencies: Venezuela has a government-run cryptocurrency known as the Petro. The value of the bolívar soberano is influenced by the Petro.

TAXES

The federal government generally is responsible for enacting laws related to income tax and social tax. None of Venezuela’s states have state-specific taxes applicable to employment.

Taxable amounts and fines are often denominated in Tax Units (TU), The value of one TU is subject to adjustment, factoring in inflation. The Spanish equivalent of the term Tax Unit is Unidad Tributaria, with the associated abbreviation U.T. commonly used in Venezuela.

Effective starting April 6, 2021, the value of one Tax Unit is Bs.S. 20,000. Effective from March 13, 2020, to April 5, 2021, the value of one Tax Unit was Bs.S. 1,500. Effective from March 7, 2019, to March 12, 2020, the value of one Tax Unit was Bs.S. 50. Effective from Sept. 11, 2018, to March 6, 2019, the value of one Tax Unit was Bs.S. 17. Effective from June 20, 2018, to Sept. 10, 2018, the value of one Tax Unit was Bs.S. 0.012 (Bs.F. 1,200). Effective from May 1, 2018, to June 19, 2018, the value of one TU was Bs.S. 0.0085 (Bs.F. 850).

The tax year is the calendar year from Jan. 1 through Dec. 31.

Income Taxes

Venezuela’s Income Tax Law is administered by the National Integrated Service of Customs and Tax Administration (Servicio Nacional Integrado de Administracion Aduanera y Tributaria, abbreviated as SENIAT). Residents and nonresidents both are subject to withholding of income tax of wages by the employer.

Coverage: For tax purposes, individuals are considered a resident if they are physically present in Venezuela 183 days or more in the current or previous calendar year or have established their residency within Venezuela. Residents are subject to taxes on worldwide income. Nonresidents only are subject to taxes on income from Venezuelan sources.

Employees: The Labor Law defines a worker as a person who does any kind of work on behalf and dependent on another where the provision of service must be paid.

Rates and Thresholds: Income tax rates are levied on a progressive scale for residents, with rates ranging from 6% to 34%. In the country’s progressive income tax system, portions of an individual’s income are allocated to the country’s personal income tax brackets, and each portion of income allocated to a tax bracket is taxed at the tax rate applicable to that tax bracket.

Individuals must earn at least 1,000 TU of net income or 1,500 TU of gross income to be subject to income tax.

Venezuela’s personal income tax rates for residents and minimum and maximum amounts of annual income for each tax bracket are as follows:

Range of Annual Taxable Income in Tax Units (TU)	Income Tax Rate
Up to 1,000 TU	6%
More than 1,000 TU and up to 1,500 TU	9%
More than 1,500 TU and up to 2,000 TU	12%
More than 2,000 TU and up to 2,500 TU	16%
More than 2,500 TU and up to 3,000 TU	20%
More than 3,000 TU and up to 4,000 TU	24%
More than 4,000 TU and up to 6,000 TU	29%
More than 6,000 TU	34%

Registration: Employers and resident individuals are required to register with the SENIAT and obtain a Taxpayer Identification Number. The requirement also applies to individuals without a permanent establishment in Venezuela that carry on economic activities in Venezuela or own property that generates income which is subject to tax in Venezuela. The certificate of registration has a three year validity.

Taxable Amounts: Salary and bonuses paid on a regular basis are taxable. Revenues exempt from income tax include contributions made on behalf of employees by employers to savings institutions; pension, disability or retirement payments; gifts; and cooperatives, retirement, and disability funds.

Withholding Methods: Employers are to withhold on pay based on the method and tables included in Form AR-I, Impuesto Sobre la Renta. Withholding is performed monthly.

Returns and Remittance: Tax withheld by the employer on taxable wages and salaries must be sent to SENIAT within three business days following the month in which the salary was paid.

Employers also are required to file electronically withholding tax returns with SENIAT within three months following the end of the year. Income tax returns are prepared on official forms and must include taxable income, details of income, costs, and deductions.

Annual tax returns for individuals are due within the first three months following the close of the year. Individuals without income tax due may file their return electronically through SENIAT’s portal www.seniat.gob.ve . If income tax is due, individuals have the option of filing the return manually or electronically. Resident individuals are required to attach annual withholding tax receipts to the final income tax return provided by employers on the last pay day of the calendar year showing annual compensation in withheld income tax.

Employee Share Plans: According to law firms White & Case LLP and DLA Piper, employees are taxed on the spread on purchase of the stock. However, if the purchase rights are not granted on a regular basis, it can be argued that they are extraordinary benefits and the spread would not be subject to tax. The gain from the sale of stock is subject to tax.

The spread income is not subject to social insurance.

Recordkeeping: An employer must keep corresponding physical documentation for a period of 10 years. All documentation must be in Spanish.

Penalties: Penalties may be imposed if the employer fails to withhold tax, remits to SENIAT after the due date or does not keep the necessary supporting documents required by SENIAT. Penalties for late filing of the return can be up to 200% of the amount due. Fines also can be imposed. If the employer fails to withhold tax from a payment, the employee and the employer are jointly liable to pay the tax.

Social Taxes

Social Security is a public service that Venezuela offers to resident Venezuelans and foreigners legally residing in the country. The Social Security system is governed by the Social Security System Organic Law (SSSOL), known in Spanish as Ley Orgánica del Sistema de Seguridad Social.

The Social Security system, which is administered by the Superintendence of the Social Security System, encompasses public pension, health, social benefits, retirement, training, unemployment disability benefits, and housing. Payments are made monthly by employers and employees. Some program administration involves the Venezuelan Institute of Social Security (IVSS). The Treasury of Social Security soon will unify all existing social security services in Venezuela.

Coverage: All workers are covered by Venezuela’s social security system.

Rates and Thresholds: Employers are required to pay between 9% and 11% of an employee’s salary, depending on the risk associated with activities undertaken. The employee pays 4%. Employers are required to pay 2% of covered payroll for unemployment benefits and employees are required to contribute 0.5% of covered earnings.

The maximum amount on which social security contributions are assessed is five minimum salaries for urban workers. The maximum amount on which unemployment benefits are assessed is ten minimum salaries for urban workers.

Registration: All employers are required to register with the Venezuelan Institute of Social Security (Instituto Venezolano de los Seguros Sociales, abbreviated as IVSS) within three working days of beginning operations. Employers also are required to register its employees within the first three working days of the commencement of their employment.

Taxable Amounts: Social Security contributions are deducted from wages, salaries, regular bonuses, commissions and any advances from payroll, among other sources. Benefits in kind also are valued, such as non-regular lodging or travel expenses, as well as remuneration received while on vacation, furlough or sick leave. Revenues exempt from social tax include pension, disability or retirement payments and retirement and disability funds.

Returns and Remittance: Employers are required to submit contributions, along with the employee portion of contributions, to the IVSS each month.

Recordkeeping: Employers are expected to keep their payroll information updated with the IVSS. The statute of limitations for social security contributions is five years.

Penalties: Late payment of contributions is subject to interest charges at a rate established by the Venezuelan Central Bank.

Failure to remit to the IVSS will result in a fine of 5 Tax Units per week per employee up to a maximum of 52 weeks per employee.

Other Taxes

National Institute of Training and Socialist Education (INCES): Employers with more than five employees pay 2% of employees’ salary and withhold 0.5% of employees’ salary every three months as contributions for the National Institute of Training and Socialist Education (Instituto Nacional de Capacitación y Educación Socialista, abbreviated as INCES). The contributions are used for providing professional training to workers and improving national illiteracy.

National Bank of Housing and Habitat (BANAVIH): Employers are required to pay a contribution equivalent to 2% of each employee’s salary and must withhold 1% of each employee’s salary for the National Bank of Housing and Habitat (Banco Nacional de Vivienda y Hábitat, abbreviated as BANAVIH), and these contributions are required to be paid on a monthly basis. The specific BANAVIH fund for which these contributions are allocated is the Mandatory Savings Fund for Housing (Fondo de Ahorro Obligatorio para la Vivienda, abbreviated as FAOV). This savings fund finances housing programs for workers. Employers that fail to fulfill these contribution obligations are subject to a penalty of 10 Tax Units per contribution in addition to other civil and criminal penalties. These contributions are treated as savings and not as tax-related contributions.

Organic Law on Prevention, Conditions, and Work Environment (LOPCYMAT): Employers are required to pay contributions to fund compensation for workers who are injured in the course of employment. These contributions are required under the Organic Law on Prevention, Conditions, and Work Environment (Ley Orgánica de Prevención, Condiciones y Medio Ambiente de Trabajo, abbreviated as LOPCYMAT). The contribution rate ranges from 0.75% to 10% of payroll, with contribution rates varying among employers based on risk factors associated with their industry sectors.

State/Jurisdiction Taxes

Taxes on employment income are not assessed by Venezuela’s capital district, states, numerous federal dependencies, or local jurisdictions.

COMPENSATION AND BENEFITS

The main legislative source for employment law is the Venezuelan Labor Law (LOTTT). The law encompasses all workers within Venezuela. The Venezuelan Labor Law covers minimum wage, overtime, hours of work, holidays, leave, wage payment, profit sharing and termination pay.

Retirement plans are covered under social taxes.

The Labor Law is administered by the Ministry of Popular Power for Social Work Process.

Minimum Wage

Venezuela’s minimum payment that employers are required to provide to employees consists of a general minimum wage amount and a required food bonus. The food bonus, also known as a food ticket, is known in Spanish as a ticket de alimentación, and also is colloquially referred to as a cesta ticket, which alternatively is rendered without the space as cestaticket.

In an effort to address hyperinflation, the Venezuelan government recently has increased the minimum wage numerous times. Effective since Sept. 1, 2018, adjustments to the monthly minimum wage are designed to correlate the value of the monthly minimum wage to half of the value of one unit of the Petro, a cryptocurrency administered by the Venezuelan government.

Effective starting May 1, 2021, to April 30, 2021, the monthly minimum wage is Bs.S. 7 million and the monthly required food bonus is Bs.S. 3 million. Effective from May 1, 2020, the monthly minimum wage is Bs.S. 400,000 (Bs.F. 40 billion) and the monthly required food bonus was Bs.S. 400,000 (Bs.F. 40 billion). Effective from Jan. 1, 2020, to April 30, 2020, the monthly minimum wage was Bs.S. 250,000 (Bs.F. 25 billion) and the monthly required food bonus was Bs.S. 200,000 (Bs.F. 20 billion). Effective from Oct. 1, 2019, to Dec. 31, 2019, the monthly minimum wage was Bs.S. 150,000 (Bs.F. 15 billion) and the monthly required food bonus was Bs.S. 150,000 (Bs.F. 15 billion). Effective from April 16, 2019, to Sept. 30, 2019, the monthly minimum wage was Bs.S. 40,000 (Bs.F. 4 billion) and the monthly required food bonus was Bs.S. 25,000 (Bs.F. 2.5 billion).

Overtime

Under the Venezuelan Labor Law (Ley Orgánica del Trabajo, los Trabajadores y las Trabajadoras, abbreviated as LOTTT), overtime work can be performed only by previous authorization. Worked performed in excess of normal work hours are considered overtime hours. Overtime is limited to 10 hours a week and 100 hours per year. Overtime work is compensated at 1.5 times the hourly wage for a normal workday.

Hours of Work

Work hours are subject to the following limits:

daytime employees (5 a.m. to 7 p.m.) are limited to eight hours daily or 40 hours weekly;
night time employees (7 p.m. to 5 a.m.) are limited to seven hours daily and 35 hours weekly;
mixed positions (with fewer than four hours of night work) are limited to 7.5 hours daily and 37.5 hours weekly.

Workers that work in shifts are limited to 42 hours per week. If six days are worked in a week period, the worker will receive an extra day of paid vacation.

Employees working nights (7 p.m. to 5 a.m.) receive an additional 30% of the hourly normal workday wage.

Management employees, confidential employees, inspectors, guards, workers who perform intermittent or discontinuous tasks are limited to 11 hours per day and are entitled to two days of rest per week, and work hours must average 40 hours per week over an eight-week period.

In order for employees to have two full days of rest each week, the workday may be extended to nine hours, subject to a maximum of 44 hours per week.

If the employee’s workplace is 30 kilometers or more from the nearest town, the employer is required to provide free round-trip transportation to the employees. Half the duration of the journey should be treated as working hours.

Holidays

The Labor Law establishes Sunday as a weekly day of rest. When an employee must work on a holiday or rest day, they are entitled to remuneration corresponding with those days and an additional 50% over their normal daily salary. Employees must receive a full day’s salary and a compensatory day off in the next week if they work for at least four hours on Sunday. Employees are not required to receive compensatory time off for working on a holiday unless the holiday falls on the employee’s weekly rest day. In addition, the following are paid holidays:

Jan. 1: New Year’s Day
Monday and Tuesday of Carnival (the two days before Ash Wednesday)
Holy Thursday and Good Friday
April 19: Signing of the Declaration of Independence
May 1: Labor Day
June 24: Anniversary of the Battle of Carabobo and St. John’s Day
July 5: Independence Day
July 24: Birthday of Simón Bolívar
Oct. 12: Indigenous Resistance Day
Dec. 24: Christmas Eve
Dec. 25: Christmas
Dec. 31: New Year’s Eve

Holidays are listed both in the Labor Law and the Law on National Holidays (Ley de Fiestas Nacionales). Up to three additional holidays each year may be declared by the national government, the states, or municipalities.

Leave

All employers must give employees 15 paid vacation days (three weeks) after one year. For each additional year employees can accrue one additional day, up to a maximum of 15 additional days.

In general, annual vacations must be taken within six months of the time the vacation was earned, unless employees have requested to postpone up to two years of earned vacation days.

Sick leave: Employers must pay the salary of employees for the first three days of their sick leave. Unless otherwise specified in an employment contract, the social insurance program will pay sickness benefits beginning on the fourth day of an illness.

Adoption leave: Female employees who adopt children younger than three years of age are entitled to 26 weeks’ adoption leave effective the date the child is placed. Women also are entitled to compensation for the maintenance of both parent and child.

Maternity leave: Employers are required to give female employees six week’s paid maternity leave with full salary and benefits before the birth of a child and 20 weeks afterward. If an illness is contracted during pregnancy, this time can be extended. An employee also is allowed to use her accrued vacation time immediately after maternity leave.

The Law on Prevention, Work Conditions, and Work Environment Regulations allows one day or two half-days of paid time off during each month the employee is pregnant to attend medical appointments.

An employee who adopts a child under the age of three is allowed up to 26 weeks’ of adoption leave beginning the date the child is placed.

Paternity leave: Employers are required to give male employees 14 day’s paid paternity leave, effective the date the child is born. The employee is required to provide an employer with the child’s birth certificate certifying that he is the father.

Paternity leave can be extended up to 14 days if the child or the mother suffers from a severe illness and by 21 days in the case of multiple births. If the mother dies, the father is entitled to the same postnatal leave that would have been given to the mother.

If a male employee adopts a child, he is entitled to paid paternity leave for 14 days following placement of the child.

Wage Payment

Salaries must be paid in cash, not in-kind. Salary must be paid to an employee every two weeks and during working days and hours. The employer must notify the employee in writing the salary paid and deductions, such as Social Security contributions and withholding taxes, each time the salary is paid. The employer is required to pay interest if the salary is paid after the due date.

Bonuses and Special Benefits

Employers are required to share with all of their employees at least 15% of their annual net profits. Annual profit-sharing distributions per employee may not be less than 30 days’ salary or more than four months’ salary. Profit-sharing contributions must be paid to employees within two months following the end of the taxable year.

If profit-sharing is not carried out then employers are mandated to provide a 13th month bonus to employees at year-end.

Vacation bonus: A vacation bonus must be paid to employees in addition to their 15 days of paid vacation leave. Employees must receive a vacation bonus of at least 15 days of salary, plus one additional day for each year of up to 15 years of service.

Termination Pay

There are no specific provisions that regulated notice periods for termination. For justified dismissals, employers must provide a detailed written notice to the employee with specific reasons for the dismissal. Employers also must give reasons for the dismissal to the Court of First Instance for Labor Cases within a five day period of the employee’s dismissal. Employers not providing timely notice can result in the dismissal being considered unjustified.

A seniority payment is a benefit paid to employees upon termination of employment for any reason. In accordance with the 2012 Labor Law, employees may choose to have their payment calculated under a system based on 30 days’ salary (calculated using the employee’s final salary) for each year of service since June 19, 1997, or under the old system, in which seniority payments are earned by all employees and begin to accrue as soon as employees reach three continuous months of employment.

Under this system, seniority payments are earned in accordance with the following schedule:

five days’ wages for each month of service and
after the first six months of service, two additional days’ wages for each subsequent year up to a total of 30 days’ wages.

Seniority payments earned by employees are payable at the time of termination. For the year in which employment ends, employees are entitled to a seniority payment calculated in accordance with the following schedule:

employees who have three to six months’ continuous service, 15 days’ wages;
employees who have six months to one year of continuous service, 45 days’ wages; or
employees who have more than one year of continuous service and who have been employed for at least six months during the year in which the employment relationship ends, 60 days’ wages.

When an employee is dismissed, they are entitled to receive a work certificate from the employer including the duration of employment, the last salary received and the job performed.

Workers’ Compensation

Workers’ Compensation is covered under social taxes.

Recordkeeping

The statute of limitations for labor actions is five years.

FOREIGN WORKERS

Foreign workers are entitled to the same rights as Venezuelan citizens and are generally covered by the same tax and workplace laws. Under the Labor Law, at least 90% of workers in each company must be Venezuelan.

Visas: A working visa is required for a foreign national to work in Venezuela. A visa must be obtained prior to entering Venezuela. The most common visa for an employee hired on a temporary or indefinite basis is the nonresident employee visa (TR-L). The company must apply for the visa through the Administrative Service of Identification, Migration and Immigration (Servicio Administrativo de Identificación, Migración y Extranjería, abbreviated as SAIME). The SAIME usually takes about 20 days to review and process the visa application but timing can vary. Following SAIME approval, the employee must attend the Venezuelan diplomatic post that has jurisdiction over the employee’s place of residence so that the visa may be attached to the employee’s passport.

The visa is dependent on obtaining a work permit. A Venezuelan-based company must apply for a work permit on behalf of an employee with the Ministry of the People’s Power of Internal Affairs and Justice. This permit is valid for one year. The period can be extended by one year as many times as required while the employee is working in Venezuela.

Taxes: Nonresidents are taxed at a flat rate of 34% for all Venezuelan-sourced income.

Wages/Payments: The Migration Law states that wages must be payable in cash, but does not specify the currency or currencies that may be used.

WORKING IN THE UNITED STATES

Foreign workers from Venezuela must meet general visa requirements and be certified to be employed in the United States. General visa requirements for the U.S. are included in the separate

U.S. employers also must check the names of all new-hires and employees against the Specially Designated Nationals and Blocked Persons List, administered by the Treasury Department’s Office of Foreign Assets Control (OFAC). Because OFAC prohibits financial transactions with individuals on the list, employers cannot employ them and may face fines for failing to comply.

For tax purposes, Venezuelans are subject to U.S. employment-based taxation on income earned in the U.S. unless they can claim an exemption under certain tax treaty provisions or they work under specific visa types that exempt earnings from taxes.

Venezuela has a tax treaty agreement with the U.S.

State and local taxation of Venezuelan workers also can apply, although some states within the U.S. recognize international tax treaties that can eliminate that income tax liability for foreign workers.

The U.S. labor laws apply to all workers employed and providing services in the country.

Work eligibility as an employee is contingent upon Department of Homeland Security and Labor Department approval and the employee receiving a U.S. Social Security number from the Social Security Administration.

Tax Residency: In general, employees working in the U.S. on a temporary basis are considered nonresidents for tax purposes unless they qualify for resident status. Employees can be granted permanent resident status through the so-called green card test or if they meet the substantial presence test under the U.S. tax code. More information on these requirements is in the

Permanent residents are subject to U.S. tax requirements the same as U.S. citizens and are taxed under the U.S. system on their worldwide earnings.

Income Taxes: Generally, nonresidents in the U.S. who are from Venezuela and are working in the U.S. are subject to U.S. taxes based on their U.S.-sourced income. Income is taxed differently based on whether it is categorized as wage income or nonwage income, which includes interest and dividends.

A Form W-4, Employee’s Withholding Certificate, must be filed by each employee with their employer. All nonresidents in the U.S. who are from Venezuela and are working in the U.S. must claim “single” in Step 1c, regardless of marital status; write “Nonresident Alien” or “NRA” in the space under Step 4c of the form; and may not claim “exempt” in the space under Step 4c.

Nonresident alien employees may adjust withholding using Step 2b or 2c of the Form W-4; certain employees also may be able to use Steps 3, 4a, or 4b. More information about Form W-4 requirements for nonresident alien employees is available in the

Although the versions of Form W-4 issued in 2020 or later significantly differ from the versions issued in 2019 or earlier, nonresident employees that filed a valid version of Form W-4 from 2019 or earlier with their employer do not need to file another Form W-4 with the employer unless they need to implement a change for their withholding. On Forms W-4 issued in 2019 or earlier, nonresident alien employees were required to check the “single” box on line 3, regardless of marital status; write “Nonresident Alien” or “NRA” above the dotted line on line 6; and were not permitted to claim “exempt” on line 7 of the form.

An additional amount is added to a nonresident alien employee’s wages for calculating federal income tax withholding, with the amount based on pay period frequency and the date of the employee’s most recently filed Form W-4. The table of additional amounts applicable to Forms W-4 from 2020 or later and the table applicable to Forms W-4 issued before 2020 are available in the

Nonwage income and self-employed foreign workers can be subject to income tax withholding at a flat rate of 30%.

Additionally, foreign workers may be taxed differently based on the specific type of visa they hold.

Tax treaties: Venezuela and the U.S. have a tax treaty addressing host country taxation of the nonresident workers. A summary of those benefits is listed in the Tax Treaty Exemption Comparison Chart. To claim the treaty benefit, the nonresident must file Form 8233, Exemption From Withholding on Compensation for Independent (and Certain Dependent) Personal Services of a Nonresident Alien Individual, with the employer.

Professors, teachers and researchers who are temporarily in the other country primarily to teach or perform research at a recognized educational institution are exempt from host country income tax on income for teaching for not more than two years from the date of arrival.

Students and apprentices who are temporarily in the host country for full-time education, training or research are exempt from host country tax on the following items of income:

payments from abroad, other than compensation for personal services, for maintenance, education, study, research or training;
grants, allowances or awards from a governmental, religious, charitable, scientific, literary or educational institution funding the research or studies; and
income from personal services performed in the other country not in excess of $5,000 for the taxable year.

Other residents who are employed by a resident of the same country are who are temporarily in the other country to study at a university or acquire technical, professional and business training from someone other than the home country resident are exempt from taxation for 12 months on income not in excess of $8,000.

Social Taxes: Most foreign workers are subject to paying into the U.S. Social Security system. Foreign nationals who are exempt from paying income tax and who do not have the eligibility to receive a social security number may not be required to pay social taxes. Foreign workers contributing to Social Security for a certain time period may be eligible to receive U.S. Social Security benefits.

Generally, foreign workers in the U.S. that have specific visas as exchange visitors or students or who are temporarily in the U.S. for agricultural work are not subject to social taxes on income that is obtained from the purpose in which they originally entered the U.S.

Totalization Agreements: Venezuela does not have a totalization agreement with the U.S.

Wage Payment: Under certain visas for certain types of employment, employers are required to pay foreign workers the higher of either the prevailing wage or the actual wage that is paid to U.S. workers that have similar skills and qualifications.

There are no particular requirements that employees be paid in U.S. dollars.

TREATY ARRANGEMENTS

Venezuela has entered into more than 30 income tax treaties, including an income tax treaty with the United States.

The countries with which Venezuela has a bilateral income tax treaty in effect are Austria, Barbados, Belarus, Belgium, Brazil, Canada, China, Cuba, Czech Republic, Denmark, France, Germany, Indonesia, Iran, Italy, Kuwait, Malaysia, Netherlands, Norway, Portugal, Qatar, Russia, Saudi Arabia, South Korea, Spain, Sweden, Switzerland, Trinidad and Tobago, the United Arab Emirates, the United Kingdom, the United States, and Vietnam.

Although the text of a multilateral income tax treaty, the Andean Community double taxation avoidance treaty, references applicability to Venezuela and the treaty took effect in 2005, the treaty is not in effect for Venezuela because the country separated from the Andean Community in 2006.

Venezuela has totalization agreements for social tax purposes with more than 20 countries but does not have a totalization agreement with the United States. The countries with which Venezuela has agreements are Andorra, Argentina, Bolivia, Brazil, Chile, Colombia, Costa Rica, Cuba, Dominican Republic, Ecuador, El Salvador, France, Greece, Guatemala, Honduras, Italy, Mexico, Nicaragua, Panama, Paraguay, Peru, Portugal, Spain, and Uruguay.

RESOURCES

All resources are English unless otherwise noted.

General

U.S. State Department: U.S. Relations With Venezuela

CIA World Factbook: Venezuela

Constitution of the Bolivarian Republic of Venezuela

Venezuelanalysis.com

Central Bank of Venezuela (Spanish)

Official Gazette (Spanish)

Currency Details

International Organization for Standardization: Currency Codes - ISO 4217

Unicode Consortium: Currency Symbols

United Nations: United Nations Terminology Database: Venezuela

Venezuela Office of the Presidency: Sovereign Bolivar Entry Into Circulation (Spanish)

Taxes

Income Tax Law (Spanish)

SENIAT: National Integrated Service of Customs and Tax Administration (Spanish)

Social Security System Organic Law (Spanish)

Venezuelan Institute of Social Security (Spanish)

SSA’s Social Security Programs Throughout the World

Compensation and Benefits

Ministry of Popular Power for Social Work Process

Official Gazette No. 40.401 on Minimum Wage (Spanish)

Venezuela’s 2012 Organic Labor Law (Spanish)

Foreign Workers

Administrative Service of Identification, Migration and Immigration (Spanish)

Immigration Law (Spanish)

Working in the United States

U.S. Department of Labor:

Foreign Labor Certification
Hiring Foreign Workers

U.S. Internal Revenue Service:

IRS Notice 1392, Supplemental Form W-4 Instructions for Nonresident Aliens
IRS Publication 15, Circular E, Employer’s Tax Guide
IRS Publication 515, Withholding of Tax on Nonresident Aliens and Foreign Entities
IRS Publication 519, U.S. Tax Guide for Aliens
IRS Publication 901, U.S. Tax Treaties

U.S. Tax Treaties Summaries

Treaty Arrangements

International Agreements to Avoid Double Taxation (Spanish)

Income Tax Treaty with U.S.