up to 38.2%
Colombian Peso (COP)
bi-weekly or monthly
Scale your global team
About our platform
Grow your business
Book a demo
Scale your global team
About our platform
Grow your business
Low wages and modest annual leave requirements make Colombia an attractive hiring destination for international companies looking to grow their remote teams. With an average weekly working time of 48 hours, employees in Columbia are used to working more than employees in other countries and are generally known for their good work ethic. Although Columbia itself is lacking qualified workers, the country has attracted many highly skilled professionals from Venezuela in recent years.
Although verbal employment agreements are also possible, it is best practice to draft a written employment contract when hiring an employee in Colombia. Colombian labour law distinguishes between permanent and fixed-term employment contracts – the latter need to be in writing and must not be concluded for a period longer than three years (but renewable).
Employment contracts should include the following information:
Identification of both parties
Date of commencement (and employment duration for temporary contracts)
Job description, duties and responsibilities
Salary and benefits (if applicable, information on whether an integrated salary is paid)
Total number of holidays
Notice periods for employment termination
Probation periods for employees hired under a permanent contract should not exceed two months – one fifth of the employment duration for fixed-term contracts.
Get expert guidance from the Lano team to compare your options and keep growing.
An employee’s standard working week should not exceed 48 hours, i.e. eight hours per day over a six-day workweek. Every employee must have one day off per week which is usually Sunday but may be shifted to another day if detailed in the employment contract.
As of July 2023, the standard weekly working time will be reduced to 47 hours.
Overtime work must not exceed two hours per day, i.e. twelve hours per week, and must be paid at a rate of at least 125% for daytime work and 175% for work at night or on public holidays.
Colombian law distinguishes between three different types of payment: minimum wage, ordinary salary (payments higher than the minimum wage which do not include any additional payments such as bonuses or other) and integrated salary (fixed monthly salary which is higher than ten times the minimum wage and set at a rate 30% higher than usual, thus including all additional payments such as bonuses).
In the beginning of 2023, the national minimum wage rose to COP 1.16 million per month. In addition, the employer has to pay a transportation/connectivity allowance equal to COP 140,606 if the employee earns less than twice the minimum wage.
If an employee is unable to work because of sickness or injury, the employer is obligated to provide sick pay equal to the employee’s usual wages for the first two days of absence. Starting with the third day of sick leave, sick pay is covered by Social Security at a rate of 66.67%. However, payments are limited to 180 days.
Except for those earning an integrated salary, employees in Colombia are entitled to a 13th salary (Prima de Servicios) which is to be paid out in two installments, one in June and the other one in December.
Learn about tax reporting, compensation laws, registration requirements and more in our free Payroll Guide for Colombia.
Employees and employers in Colombia are subject to the following tax and social security contribution rates (last review February 2023):
35% corporate tax rate
19% VAT (standard rate)
up to 39% *
Individual income tax rates range from
19% to 39%
up to 38.2%
8.5% health insurance
12% pension plan
4% or 9% payroll tax (depending on employee's income level) which go towards different social security funds
Plus 0.348% - 8.7% for coverage against professional risks.
Please note that social security contributions for integrated salaries are calculated based on 70% of the employee’s income.
up to 10%
4% health insurance
4% pension plan
1% - 2% solidarity pension fund contribution (only on income exceeding 16 times the minimum wage)
* Read more
Individual income is taxed progressively based on the following tax brackets (percentage rates given only apply to income exceeding the respective tax bracket threshold):
up to 1,090 TVU: 0%
1,090 TVU to 1,700 TVU: 19%
1,700 TVU to 4,100 TVU: 28% + 116 TVU
4,100 TVU to 8,670 TVU: 33% + 788 TVU
8,670 TVU to 18,970 TVU: 35% + 2,296 TVU
18,970 TVU to 31,000 TVU: 37% + 5,901 TVU
above 31,000 TVU: 39% + 10,352 TVU
The “TVU” is the tax unit used by the Colombian government to reset tax thresholds. In 2023, the value of the TVU stands at COP 42,412.
Please note that the social security contributions indicated above do not necessarily reflect the actual employment costs. These may differ depending on the employment contract and due to other factors (e.g. 13th and 14th salary, health insurance allowances, accrual for severance pay, etc.).
Colombian employees earn 15 days of paid annual leave per year. In addition, the country observes 18 public holidays on which employees are not required to work.
A new law is expected to enter into force which will increase the number of paid vacation days to 20 days per year.
Female employees can take 18 weeks of fully paid maternity leave which can start up to two weeks before birth. Payments are made by the employer who is later reimbursed by Social Security.
Fathers of newborn children can take 2 weeks of paternity leave, which is paid in the same way as maternity leave. It is also possible for fathers to share the last 6 weeks of the mother's maternity leave.
Colombian labour law does not provide for further parental leave.
In addition to the leave entitlements mentioned above, employees in Colombia are entitled to paid time off under the following circumstances:
trade union leave
bereavement leave (5 days)
burial leave for co-workers
Both employees and employers can terminate the employment relationship at any given moment without having to respect a notice period. Recognised causes for employment termination include:
death of employee
employment termination by default, i.e. in case of a fixed-term contract
collective dismissal (previous authorisation required)
termination without a fair cause
The only time an employer has to give notice to his employee is when the concluded fixed-term contract is about to expire and no extension of the contract is intended. In this case, the notice period is 30 days.
Severance pay is required if the employee is dismissed without cause as well as in cases where the employee voluntarily ends the employment relationship. Its amount depends on the employee’s seniority and usual salary:
30 days of salary during the first year and 20 days of salary for every year thereafter – employees earning less than ten times the minimum wage
20 days of salary during the first year and 15 days of salary for every year thereafter – employees earning more than ten times the minimum wage
severance pay equal to any outstanding payments until the initially agreed end date for employees hired under a fixed-term employment contract
As there is no unemployment insurance in Colombia, employers must transfer an annual amount equal to one month’s salary (Cesantías) to a special fund for this purpose, which is paid out to the employee under special circumstances – including a 12% interest rate. However, this only applies to employees who do not receive an integrated salary.
This country guide is for informational purposes only and should not be construed as legal advice. The content of this guide contains general information, and although we update this guide regularly, it may not reflect current legal developments. Lano Software GmbH disclaims any liability for any actions you take or refrain from taking based on the content contained in this country guide.
From compliant contracts to seamless onboarding, get everything you need to build the best team on the planet.
Get professional advice and tips on hiring remote talent and scaling businesses globally. Join over 50 000 subscribers now.
© Lano Software GmbH 2023