Colombia
Make employment in Colombia easy. Let us handle payroll, benefits, taxes, compliance, and even stock options for your team in Colombia, all in one easy-to-use platform.
- Capital city
Bogota
- Currency
Colombian peso ($, COP)
- Languages
Spanish
- Population size
51,049,498
Facts & Stats
- Capital city
Bogota
- Currency
Colombian peso ($, COP)
- Languages
Spanish
- Population size
51,049,498
- Ease of doing business
Easy
- Cost of living index
$ (131 of 139 nations)
- Payroll frequency
Biweekly/Monthly
- VAT - standard rate
19%
- GDP - real growth rate
3.3%
The second-most populous country in South America, Colombia is the only country on the continent with beaches on both the Caribbean Sea and the Atlantic Ocean. Colombia is well known for its coffee and its vibrant arts scene. With many public holidays (the second-most in the world, behind only India), plentiful natural resources, and a large population, Colombia is home to expert workers in a variety of important fields.
Grow your team in Colombia with Remote
Looking to employ workers in Colombia? Companies hiring in Colombia must either own a legal entity in the country or work with a global employment solutions provider, usually one that provides employer of record services.
Remote can employ your team in Colombia on your behalf through our local legal entity in the country and handle payroll, benefits, taxes, and compliance for your Colombia team. You can also pay contractors now in Colombia with Remote.
Risks of misclassification
Colombia, like many other countries, treats self-employed individuals or contractors and full-time employees differently. Misclassification of contractors in Colombia may lead to fines and penalties for the offending company.
Employing in Colombia
Colombia has many skilled workers, most of whom primarily speak Spanish, the country’s official language. Before you recruit Colombian or expat employees, you should understand the specifics of Colombian employment and labor laws.
Employment contracts are required for both fixed-term employment and permanent employment agreements. Remote recommends employment contracts for every hire, and every contract must adhere to Colombian employment and labour laws. Usually, fixed-term contracts in Colombia cannot be for more than three years, though there is a provision to extend them to a later date. The contracts are usually drafted in Spanish.
To employ workers in Colombia, contact Remote to learn more about your options.
Minimum Wage
Integral Salary: 15,080,000 COP
The CST specifies that integral salaries cannot be less than 10 monthly minimum wages plus a 30% benefit factor. As of January 1st 2023, the minimum wage without benefits in Colombia is 1,160,000 COP per month. Note the transportation subsidy is now $140,606 COP per month.
This means the minimum monthly Integral Salary is calculated as follows:
10 x 1,160,000x 30% = 15,080,000 COP per month
Ordinary Salary monthly minimum: 1,160,000 COP
For Colombian employees earning an Ordinary Salary, the 2023 minimum monthly legal wage is $1,300,606 COP per month. (Note this figure is larger than the 1,160,000 COP per month used to calculate the Integral Salary minimum because the Ordinary Salary also includes mandatory entitlements and contributions).
Colombia labor laws for two types of salaries.
Integral Salary: where salary is paid separately to other benefits and entitlements
Ordinary Salary: where benefits and entitlements are included in the monthly salary payments for the employee
The type of salary must be agreed to by both the employee and employer. This salary type must be outlined in the relevant Employment Agreement.
The CST (Código Sustantivo del Trabajo) specifies that an integral salary cannot be less than 10 monthly minimum wage payments, plus 30% of the benefit factor.
That means in 2023, the benchmark for a gross integral salary in Colombia must be at least 15,080,000 Colombian pesos (COP) as the minimum monthly wage is 1,160,000 COP.
13th Month Pay
Employees in Colombia who are earning an Ordinary Salary are entitled to receive an extra month’s pay each year, calculated by dividing the gross annual salary by 12.
The payment is equally split and delivered 50% in June and 50% in December. These payments are not only customary but are required by law.
If an employee earns less than $15,080,000 COP per month, an Ordinary Salary would apply. Note that the 13th salary should not be included in the total annual gross salary.
If an employee earns a gross salary of $15,080,000 COP per month or more, an 'integral salary' is usually applied. Employees who receive an integral salary, do not receive a 13th salary payment.
Payroll Cycle
For customers of Remote, all employee payments will be made in equal monthly installments on or before the last working day of each calendar month, payable in arrears.
Onboarding Time
We can help you get a new employee started in Colombia fast. The minimum onboarding time we need is only 5 working days.
Our team ensures your employees are onboarded and paid as quickly as possible while keeping your business compliant with all local employment legislation. The minimum onboarding time begins after the employee submits all required information onto the Remote platform. The onboarding timeline is also dependent upon registration with local authorities.
For all non-nationals of the country of employment, the Right to Work assessment (if applicable) will add three extra days to the total time to onboard. There may be extra time required if we need to follow-up on the right to work assessment.
Please note, payroll cut-off dates can impact the actual first day of employment. Remote has a payroll cut-off date of the 10th of the month unless otherwise specified.
20 Public holidays
Competitive benefits package in Colombia
At Remote, we’re obsessed with helping you craft the best possible employee experience for your team. We are leading the way in practicing “fair equity,” which means making sure employees everywhere have access to both the required and supplemental benefits they need to thrive (and that will allow you to attract the best local talent).
Our benefits packages in Colombia are tailored to fulfill the local needs of your employees. Typically, our packages contain some or all of the following benefits:
Health Insurance
Dental Insurance
Vision Insurance
Mental Health Support
Pension or 401(K)
Life and Disability Insurance
Taxes in Colombia
Learn how employment taxes and statutory fees affect your payroll and your employees’ paychecks in Colombia.
12.00%
Pension Fund
8.50%
Healthcare Fund
0.348 - 8.7%
General Labor Risk Pool
4%
Family Allowance Fund
3%
Colombian Institute for Family Welfare (ICBF)
2%
National Learning Service (SENA)
29.848-36.2%
Total Cost of Employment
Types of Leave
All full-time employees are entitled to 15 consecutive working days of paid annual leave. Every employee is also entitled to 18 paid public holidays.
Employment termination
Termination process
Either party unilaterally terminating the employment contract must state in writing at the time of termination the cause or motive that led to the termination, except in some special cases.
The termination process must follow rules and regulations set by employment contract law, salary law, and social security regulations. Employers must offer a “fair” reason for terminating the employee in the eyes of the law or risk penalties and fines.
Notice period
The statutory notice period in Colombia depends on the context:
Notice is not required if an employee is terminated for misconduct.
For workers on a fixed-term contract, written notice must be sent to the employee 30 days before the contract expires.
For employees not on fixed-term contracts, 15 days notice must be given when the employee is dismissed for poor performance. In these cases, the employee can respond to the termination within 24 hours to challenge the decision.
Severance pay
In Colombia, the amount a company must pay as severance depends on the nature of termination, the current salary of the employee, and the type of agreement.
In the case of a fixed-term agreement, the severance must be the balance of salary due to the employee up to the last date of the agreement.
In the case of an indefinite agreement, severance varies based on the number of years of service and the current salary of the employee.
Employees earning less than COP$9,085,260 (10 times the monthly minimum wage) receive 30 days’ salary for the first year of employment and 20 days’ salary for each additional year.
Employees who earn more than 10 times the monthly minimum wage receive 20 days’ salary after one year and 15 days’ salary for every additional year with the company.
Probation periods
Probationary Periods must be in writing. For undefined term contracts and fixed term contracts between one and three years, the maximum probationary period is two months. In fixed-term contracts for less than one year, the probationary period may not exceed one-fifth of the agreed term not exceeding two months.