Easily manage employment in Colombia

Payroll services in Colombia

Colombia has a diverse economy with key industries in oil, mining, agriculture, and manufacturing. With specific labor laws and tax regulations, employers in Colombia must ensure compliance with local payroll requirements, including social security contributions, employment contracts, and tax obligations. Understanding these regulations is essential for smooth payroll operations and legal compliance.

Payroll breakdown in Colombia

Employers in Colombia must adhere to national payroll regulations regarding wages, taxes, and social contributions. Below is an overview of key payroll components:

Minimum wage and working hours

• Minimum wage: Colombia’s minimum wage is COP 1,300,000 per month.
• Payroll frequency: Salaries are generally paid monthly.
• Standard working hours: The normal workweek in Colombia is 48 hours, typically spread over five or six days.
• Overtime: Employees are entitled to additional pay for overtime work, calculated at 125% of the regular wage for extra hours and 175% for work on Sundays or public holidays.

Taxation and social security contributions

• Personal income tax: Colombia has a progressive income tax system with rates ranging from 0% to 39% depending on income levels.
• Employer contributions:
• Pension fund: 12% of the gross salary.
• Health insurance: 8.5% of the gross salary.
• Labor risks: 0.348% to 8.7% depending on risk level.
• Employee contributions:
• Pension fund: 4% of the gross salary.
• Health insurance: 4% of the gross salary.
• Corporate tax: The corporate income tax rate in Colombia is 35%.
• Tax reporting: Employers must file payroll taxes and contributions with the Colombian tax authorities regularly.

Payroll compliance in Colombia

• Employment contracts must be provided in writing and specify terms such as salary, working hours, and job responsibilities.
• Payroll deductions: Employers must ensure accurate deductions for social security and income tax.
• Employers must stay updated on changes to Colombia’s labor laws and tax regulations to avoid penalties.

Quick facts: Important considerations for employers

• Payroll frequency: Salaries are generally paid monthly.
• Currency: Payroll in Colombia is processed in Colombian Peso (COP).
• Tax reporting: Employers must file payroll taxes and contributions with the Colombian tax authorities.
• Payroll deductions: Employers must ensure accurate deductions for social security and income tax.
• Payroll compliance: Employers must stay updated on changes to tax rates and reporting requirements.

Run payroll in Colombia with Remote

Managing payroll in Colombia requires careful attention to tax regulations, employment laws, and social security requirements. Employers must stay informed about tax rates, wage laws, and reporting deadlines to ensure smooth payroll processing and avoid penalties.

The good news is, you can pay anyone, anywhere — from your team in the office to your team abroad, all with Remote Payroll. To see just how easy global payroll can be with Remote, book a demo today.