Payroll & Employment Guide Colombia flag

Payroll & Employment Guide Colombia

Colombia is a growing talent hub in Latin America, known for its young and skilled workforce, strong tech presence, and cost-effective hiring opportunities. With a favourable time zone for North American businesses and government initiatives supporting remote work, Colombia is a popular destination for companies looking to expand their global teams.

Payroll & Employment Guide Colombia
CurrencyColombian Peso (COP)
LanguagesSpanish
Minimum wageCOP 1,423,500 per month
Employment cost20.5%
Working hours44 hours per week
VAT19%
Probation period1 - 2 months
Paid leave days15 days per year
Categories

Hiring guide

With a thriving economy and a growing tech ecosystem, Colombia offers businesses access to qualified professionals at competitive rates. To hire legally, employers must comply with national labour laws that outline employment contracts, minimum wages, social contributions, and worker protections.

Get details on Colombia’s employment laws, tax obligations, and cost structures in our complete hiring guide before expanding.

Learn more

Employment contracts

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.

Want to learn more about employment contracts in Colombia? Get our full template now!

Employee benefits

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.

Want to learn more about all the employee benefits available in Colombia?

Taxes

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.
  • Value Added Tax (VAT): 19%

Want to find out more about Colombia’s tax allowances and similar tax regulations? Click here to read more now!

Payroll

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

EOR services

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

PEO services

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

Payroll calculator

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.

Note: The information provided above is for general guidance only and should not be considered a substitute for legal advice. We strongly recommend consulting with qualified professionals who specialise in local labour laws before making any hiring decisions. While the data was accurate at the time of writing, labour regulations are subject to change, and it is your responsibility to stay informed about the latest developments.

Last update: July 29, 2025

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Frequently asked questions

Freelancers and gig workers in Colombia are generally considered self-employed and are responsible for managing their own taxes and social security contributions. As a client, you are not required to make contributions on their behalf. 

However, to avoid potential misclassification, it’s important that the working arrangement does not resemble an employer-employee relationship. Always ensure that you have a clearly defined contract that outlines the scope of work, deliverables, payment terms, and other key conditions.