Payroll & Employment Guide Colombia

Employment contracts in Colombia must be documented in writing and must clearly state the terms of employment, including job responsibilities, compensation, benefits, and termination conditions.

Notice periods: 15 - 30 days

Termination of employment: Requires just cause or a mutual agreement and may involve severance payments depending on the reason and length of employment.

Colombian labour laws require employers to provide a mix of mandatory and common employee benefits. These are essential for attracting and retaining talent.

Mandatory benefits: Social security (Health, pension, and occupational hazard insurance contributions), severance pay.
Common perks: Flexible work arrangements, health and wellness programs, transportation allowances, meal vouchers, professional development, and bonuses.

Leave policies: Annual leave, sick leave, maternity leave, paternity leave, bereavement leave, and family leave.

Colombia’s tax system includes mandatory contributions for health, pension, and employment risk. Employers are responsible for withholding these from employee salaries and contributing a portion themselves.

• Income tax: Progressive rates for individuals, with employers withholding taxes from salaries.
• Social security contributions: Employers contribute 20.5% of salary for health and pension insurance, plus 0.348% to 8.7% for occupational hazard insurance. Employees contribute up to 10% for health and pension.
• Payroll taxes: Additional contributions for SENA, ICBF, and the Family Subsidy Fund.
• Allowances: Employees who earn up to two minimum wages are entitled to a mandatory transportation or connectivity allowance and three annual provisions of clothing and footwear.
• Value Added Tax (VAT): 19%

Colombian employers must pay employees in accordance with the labour code and contract terms. Salaries are generally paid once a month.

Salary payment deadline: Usually by the 10th of the following month

Taxes and contributions payment deadline: Monthly, specific dates vary

Payroll declarations deadline: Annual summary of contributions is mandatory

Payroll currency: Colombian Peso

Employment in Colombia is governed by the national Labour Code, which covers working conditions, compensation, contracts, social security, and employee protections.

Total employment cost:

• Employer’s social security contributions: 20.85% - 29.2%
• Employer’s health insurance costs: 8.5%
• Employees’ social security contributions: 11% - 12%
• Employee’s health insurance costs:

Minimum wage: COP 1,750,905 per month

Probation period: 1 - 2 months

Using EOR services in Colombia allows you to legally employ individuals in the country without opening legal entities there. The EOR takes over all the legal responsibilities as an official employer, including:

• Legal employment and contracts
• Payroll processing
• Tax withholding
• Benefits administration
• Onboarding/offboarding employees

Using PEO services in Colombia provides HR and administrative support, while you remain the legal employer. PEO services are ideal for employers who already have legal entities in Colombia but need support to manage their workforce operations, including:

• HR support and workforce administration
• Payroll and benefits management
• Compliance and local labour law guidance
• Employment contracts assistance

Native Teams provides a payroll calculator adjusted per Colombia’s labour laws. Estimate gross-to-net salaries, tax withholdings, and employer costs in Colombia with our localised calculator. Designed to meet all payroll and compliance requirements.

Here is a list of public holidays in Colombia: