2025 pay adjustment guide: what to consider in Latin America from July to December

Companies operating across Latin America will face critical decisions around pay adjustments throughout the year. This guide compiles the latest trends and key considerations to help you build realistic and competitive compensation strategies.

Salaries in tech: more than just numbers

Talking about salaries isn’t just about figures; it’s about real purchasing power, competitive pressure in a distributed market, and strategic decisions that determine whether you retain, attract, or lose top talent.
This report isn’t about speculating on the future — it’s a data-backed analysis of salary trends across Argentina, Mexico, Colombia, and the broader LATAM region.
It’s designed to serve as an essential reference for planning your compensation policies.

TL;DR

Here are the key steps to carry out a smooth, effective salary adjustment process:

1. Track local inflation quarterly.

2. Define clear periods and policies for adjustments (quarterly, semi-annual, or annual).

3. Communicate salary review policies early.

4. Adjust salaries based on CPI plus a strategic differential (where applicable).

5. Benchmark against at least two reliable salary datasets every six months.

6. Conduct salary perception surveys before and after adjustments.

7. Update USD salary bands if inflation exceeds 10% annually.

8. Maintain transparent records of all salary adjustments.
   
   
   

Risks of not adjusting for cost of living

• Talent loss: Especially among senior and bilingual technical profiles.

• Employee disengagement: Lower commitment and higher voluntary turnover.

• Loss of competitiveness: Falling behind companies that already apply COLA standards.

• High replacement costs: The expenses of backfilling and retraining new employees often far exceed the cost of a proactive salary adjustment.
  
  
  

Data sources

This report is based on information from:

• Argentina: INDEC (National Institute of Statistics and Census) — monthly and cumulative inflation rates.

• Mexico: INEGI (National Institute of Statistics and Geography) — minimum wage changes.

• Colombia: DANE (National Administrative Department of Statistics) — CPI and minimum wage updates.

• LATAM: ECLAC (Economic Commission for Latin America and the Caribbean) — average inflation across the region.

• Remote tech companies in LATAM: Internal salary benchmarks.

• Additional sources: Interfell, Deel, Bloomberg Línea, Statista.
  
  

Note: salaries are listed in USD/month for remote tech roles, following global hiring trends and prioritizing purchasing power parity (PPP) relative to local living costs.

What is COLA and how is it calculated remotely?

COLA (Cost of Living Adjustment) is a mechanism to adjust salaries based on the rising cost of living in an employee’s country or city, helping preserve real purchasing power against inflation.

COLA calculation process:

1. Monitor annual or quarterly inflation via official CPI.

2. Define an adjustment percentage (equal to or greater than accumulated inflation).

3. Apply differentiated adjustments by country.

Salary adjustment formula:

Inflation Rate + Market Premium + Experience Adjustment = Total Salary Increase (%)

Examples:

Mexico: If annual inflation is 5% and an employee earns USD 2,000, the COLA adjustment would be at least $100 per year.

Argentina: If quarterly inflation hits 12%, salaries should be raised by that amount within the same quarter.

Important notes:

• In Argentina, adjustments are quarterly, based on inflation and currency fluctuations.

• In Mexico and Colombia, adjustments are typically annual, based on CPI.

• These examples show minimum COLA increases, excluding promotions or performance bonuses.

A well-implemented cost-of-living adjustment helps maintain the financial stability of teams, reflects each employee’s economic reality, and strengthens the perception of internal equity.

Country-specific strategies

Mexico: Growth and external pressures

Mexico combines controlled inflation with steady growth in the minimum wage, establishing itself as an attractive tech hub. However, its proximity to the U.S. is creating growing pressure, as more companies are hiring Mexican talent and paying in dollars. At the same time, the country serves as a tempting launchpad for expanding into the rest of Latin America.

Key drivers for adjustment:

• Growing external demand.

• Expansion of nearshoring practices.

• Cost of Living Index (Numbeo 2024, NYC = 100%): Mexico City ~45.
  
  

When to adjust:

• Annual adjustments based on inflation and market trends, especially in Mexico City, Guadalajara, and Monterrey.
  
  

Adjustment components:

• Market premium: 3% (Customer Experience/Marketing), 5% (Product/Development).

• Experience adjustment: 2% (Mid-level), 4% (Senior-level).

• Projected inflation 2025: 4%-5% (INEGI).
  
  

Baseline salary increase expectations:

• Customer Experience: 9%-14%

• Product: 11%-16%

• Development: 11%-16%

• Marketing: 9%-14%

  
  

Risks of not adjusting: Without adjustments, turnover tends to spike in Q4, with employees preferring U.S. companies viewed as the “gold standard.”

Additional notes:

• Developers and Product managers see larger increases due to demand for AWS and AI skills.

• CX and Marketing roles track closely with minimum wage trends but are boosted by bilingual skills.

• Northern border regions, like Tijuana, may require ~15% higher adjustments.
  
  

Argentina: managing constant inflation

Argentina is experiencing one of the highest inflation rates in the region, with the cost of living rising sharply. Argentine tech talent remains highly competitive, but the volatility demands agile and frequent salary adjustment policies.

Key drivers for adjustment:

• Increasing export of tech talent.

• Cost of living tripled compared to 2024.
  
  

When to adjust:

• Quarterly, based on real inflation, exchange rates, and market trends.

• Option for bi-monthly adjustments to better manage cash flow.
  
  

Adjustment components:

• Market premium: 5% (Customer Experience/Marketing), 8% (Product/Development).

• Experience adjustment: 3% (Mid-level), 5% (Senior-level).

• Projected inflation 2025: 30%-40% (INDEC).
  
  

Baseline salary increase expectations:

• Customer Experience: 38%-45%

• Product: 41%-48%

• Development: 41%-48%

• Marketing: 38%-45%

  
  

Risks of not adjusting: Failure to adjust leads to an accelerated loss of mid-level and senior talent.

Additional notes:

• Product and Developer roles receive higher increases, reflecting tech demand.

• Seniors see an extra 5% premium for experience (e.g., Agile, Cloud services).

• Bilingualism (English) boosts salaries by up to 50%.

• Salaries must be maintained in USD to preserve purchasing power.
  
  

Colombia: strengthening tech hubs

Colombia’s tech ecosystem continues growing, with strong hubs in Bogotá, Medellín, and Barranquilla. While inflation remains moderate, Colombian talent is increasingly attractive to global companies.

Key drivers for adjustment:

• Minimum wage increased by 9.54%.

• Bogotá’s cost of living is ~40% compared to NYC (Numbeo 2024).
  
  

When to adjust:

• Annually, to stay competitive internationally.
  
  

Adjustment components:

• Market premium: 3% (Customer Experience/Marketing), 5% (Product/Development).

• Experience adjustment: 2% (Mid-level), 4% (Senior-level).

• Projected inflation 2025: 5%-6% (DANE).

Baseline salary increase expectations:

• Customer Experience: 10%-15%

• Product: 12%-17%

• Development: 7%-12%

• Marketing: 10%-15%
  
  

Risks of not adjusting: Gradual loss of specialized talent to international companies.

Regional trends across LATAM

There is no single, uniform salary scenario across Latin America. Each market presents unique opportunities and challenges that must be carefully understood. No two LATAM markets are identical, but some trends repeat across the region:

Regional drivers for adjustments:

• Average projected inflation 2025: 3%-8% (ECLAC).

• Strong tech ecosystems in Brazil and Chile (expected raises are 12%-17%).

• High salary pressure in Product and Development roles.

• Cost of Living Index (Numbeo 2024, NYC = 100%): São Paulo ~50, Lima ~35.

• Minimum wage increases across multiple countries.
  
  
  

Risks of not adjusting:

• Loss of bilingual and senior talent.

• Reduced employee engagement.

• Falling behind global competitors.

• High costs of replacing talent versus preventive salary increases.
  
  
  

Regional expected increases:

At the regional level, salary adjustments for tech talent in LATAM (excluding Mexico, Argentina, and Colombia) are expected to range between 8% and 20% in 2025, depending on the country, role, and seniority level. Software development and product management roles are experiencing the greatest salary pressures due to high global demand.

Salary adjustments made without considering cost-of-living increases (COLA) could result in a loss of up to 30% in competitiveness compared to international offers.

An updated salary strategy that is responsive to the regional landscape will be critical to retaining talent in an environment of increasing mobility and international competition.

Additional notes:

• Peru and Ecuador are experiencing more moderate dynamics, with inflation between 3% and 5%.

• Countries with lower inflation, such as Bolivia and Guatemala, are seeing smaller salary adjustments.

• Peru and Ecuador are aligning with Colombia’s salary trends, while Bolivia and Guatemala are lower due to minimal inflation.

• Brazil and Chile are showing higher increases (12%–17%), driven by their strong tech ecosystems.

• Senior professionals in Product and Development are benefiting from global demand (e.g., AWS certifications).
  
  

  
  

Action plan

• Apply effective, differentiated COLA strategies.

• Complete salary adjustments before Q4 (except in Argentina).

• Set USD salary bands for Argentina.

• Communicate salary policies clearly and predictably.

• May 2025: Gather employee feedback, analyze inflation and exchange rate data, benchmark with Interfell, Deel, and LinkedIn Salary.

• June 2025: Apply salary adjustments to payroll.

• July 2025: Measure employee satisfaction through surveys.

• Surveys should be run before and after each adjustment to monitor changes in salary satisfaction, perceived competitiveness, retention intention, and benefits preference.

FAQ

Why are June and July critical for pay adjustments in LATAM?

These months mark major market movements: salary reviews, collective agreement renewals, inflation updates, and mid-year trends that shape the rest of 2025.

What’s affecting 2025 salary adjustments?

Persistent inflation, active union negotiations, partial devaluations, and competition from international remote job offers.

What should companies do right now?

Implement COLA tailored to each country, adjust salaries early (especially in Mexico and Colombia), and update salary bands to match market benchmarks.

How does COLA strengthen compensation strategies?

It safeguards employees’ purchasing power and strengthens a company’s competitive advantage.

How should companies handle Mexico, Colombia, and Argentina differently?

• Mexico: Adjust proactively despite moderate inflation.

• Colombia: Expect salary renegotiations starting Q2.

• Argentina: Plan for multiple inflation-based adjustments annually and purchasing power.
  
  
  

What are the risks of not adjusting salaries?

Critical talent loss, internal dissatisfaction, and difficulty hiring without aggressive salary negotiations.

How can People Ops and Finance align?

By basing adjustments on up-to-date market data, sync COLA projections, and preparing budget scenarios to avoid chaotic renegotiations in Q3 and Q4.

Final thoughts

The remote tech market in Latin America shows no signs of slowing down. Adjusting salaries on time isn’t just a defensive move; it’s a competitive necessity.

Making data-driven decisions, staying ahead of market shifts, and acting decisively will set apart those who attract and retain talent from those who lose it.

Have you started planning your team’s pay adjustments yet?