Ultimate 2024 Guide to Payroll and Hiring in
COLOMBIA
Currency
Colombian Peso (COP)
Employer Taxes
21.02% - 27.46%
Payroll
Bi-Weekly / Monthly
Employee Costs
10%
Cities
All cities across Colombia
Date Format
dd/mm/yyyy
Type of Contracts
Apprenticeship contracts
Not exceeding 2 years.
It’s a work relationship where a Colombian student is allowed to work in a company to gain work experience.
Monthly economical support:
- During the academic phase equivalent to 50% of one (1) current minimum monthly salary.
- During the practical phase will be equivalent to seventy-five percent (75%) of a current minimum monthly salary.
Fixed-term
Defined start and defined end, this contract cannot exceed 3 months and needs to be in writing.
To avoid automatic renewal, either party must give written notice at least 30 days before the contract expiration.
If the initial term of the fixed-term employment contract is less than one (1) year, the contract may only be renewed successively for up to three (3) equal or lesser periods. After these three renewal periods, the renewal term cannot be less than one (1) year.
Contract for work or labor
It’s for a specific task and ends when the work is completed. Mostly used in construction jobs.
This contract is equal in terms of benefits and discounts, to the indefinite and definite contracts, since it is a labor contract.
Temporary or accidental contract
This contract cannot exceed 30 days.
It’s the contract used to perform tasks different from the normal activities of the company.
Indefinite term employment
Defined start and undefined end, An indefinite term contract has no set termination date, but the company can terminate it if the employee fails to meet their duties or obligations.
The indefinite term contract may be executed verbally or in writing. However, when the time comes, either party may request that the agreement be formalized in writing, with a traditional or certified electronic signature.
The permanent contract can also attract talent, as it creates an environment of trust in which workers are more productive and turnover is avoided.
Hiring in Colombia with an indefinite-term contract has a limit on working hours per week. Some shifts include surcharges, and you can hire for either part-time or full-time shifts.
- Holiday surcharges.
- Night shift surcharges.
- NO holiday surcharges.
- NO night shift surcharges.
- Holiday surcharges.
- Night shift surcharges.
Working Hours and Surcharges
Overview
By law in Colombia, the maximum working hours are set between 8 to 10 hours per day and 47 hours per week, effective from July 2023.
Employers must respect workers’ non-working hours and should not contact them outside of these times.
Starting in summer 2023, the workweek will gradually be reduced. Colombians will work one less hour per week each year without any negative impact on their salary, benefits, or hourly wage.
The goal is to reduce the workweek to 42 hours by 2026. This will begin with a reduction of one hour per week in the first two years (2023 and 2024) and then two hours per week in the following years (2025 and 2026).
Overtime
Night shifts goes from 9:00 p.m. to 6:00 a.m. Nighttime overtime commands a 175% surcharge.
Employees work overtime on sundays or legal public holidays 200% surcharge of the daytime value.
Compensation for work on Sundays and holidays includes a 250% surcharge on the ordinary salary, proportionate to hours worked.
Surcharges
Night work entails a 35% surcharge on the value of daytime work, except for the provision of a 36-hour workweek.
Surcharge percentage of 25% for regular shift
Surcharge percentage of 110%
Give a look to national Colombian public holidays in 2024.
| Date | Day | Holiday |
|---|---|---|
| 1 Jan 2024 | Sunday | New Year’s Day |
| 8 Jan 2024 | Monday | Three Kings Day |
| 25 Mar 2024 | Monday | St. Joseph’s Day |
| 28 Mar 2024 | Thursday | Holy Thursday |
| 29 Mar 2024 | Friday | Good Friday |
| 1 May 2024 | Wednesday | Labor Day |
| 13 May 2024 | Monday | Ascension Day |
| 3 Jun 2024 | Monday | Corpus Christi |
| 10 Jun 2024 | Monday | Sacred Heart |
| 1 Jul 2024 | Monday | Feast of St. Peter & St. Paul |
| 20 Jul 2024 | Saturday | Independence Day |
| 7 Aug 2024 | Wednesday | Battle of Boyaca |
| 19 Aug 2024 | Monday | Assumption Day |
| 14 Oct 2024 | Monday | Columbus Day Celebration |
| 4 Nov 2024 | Monday | All Saints’ Day |
| 11 Nov 2024 | Monday | Independence of Cartagena |
| 8 Dec 2024 | Sunday | Immaculate Conception |
| 25 Dec 2024 | Wednesday | Christmas |
Note: Some regional holidays are not included in the calendar because their observance depends on the region. These regional celebrations may alter the on-site work schedule or result in a surcharge fee, such as the Carnival of Barranquilla in February.
Contribution and Expenses
| Percentage | Colombia Payroll Description | |
|---|---|---|
|
Employer |
Employer Payroll Contributions |
– |
|
|
12.00% |
Pension Fund (applied on salary up to 25 minimum monthly salaries (SMMLV)). |
|
|
8.50% |
Medical Plan (applied on salary up to 25 minimum monthly salaries (SMMLV)). |
|
|
0.52% – 6.96% |
Labor Risks (applied on salary up to 25 minimum monthly salaries (SMMLV)). |
|
|
4.00% |
Family Compensation Funds (applied on salary up to 25 minimum monthly salaries (SMMLV)). |
|
|
3.00% |
Family Welfare (ICBF) (applied on salary up to 25 minimum monthly salaries (SMMLV)). |
|
|
2.00% |
National Apprenticeship Service (SENA) (applied only on integral salary) (applied on salary up to 25 minimum monthly salaries (SMMLV)). |
|
|
21.02% – 27.46% |
Total Employment Cost |
|
Employee |
Employee Payroll Contributions |
|
|
|
4.00% |
Pension Fund (applied on salary up to 25 minimum monthly salaries (SMMLV)). |
|
|
1.00%-2.00% |
Pension Solidarity Fund (employees who earn more than four minimum legal monthly salaries must contribute an additional 1%, to the pension solidarity fund, created by law, employees who earn more than 16 minimum monthly salaries (COP 18,560,000) must contribute an additional percentage (between 0.2% and 1%), depending on the amount of salary received.) |
|
|
4.00% |
Medical Plan |
|
|
9.00%-10.00% |
Total Employee Cost |
Other Expenses in Colombia payroll
Comissions
Depending on the nature of the employment agreement, employees may receive commissions as part of their compensation.
Per Diem
It refers to a daily allowance or funds provided to cover expenses incurred during business travel. These expenses may include meals, accommodation, transportation, and other incidental costs.
Surcharges
This is an extra payment for working Sundays, national holidays. Also for working in night shift and overtime
Transportation Allowance
This allowance is applicable to employees earning an ordinary salary of up to $2,600,000 pesos per month, or twice the current legal monthly minimum wage.
Indemnity
If an employee is terminated without just cause, they are entitled to receive compensation equal to 20 days of salary for each year worked. In cases of dismissal due to contested business objectives or disciplinary reasons, the compensation ranges between 33 to 45 days for each year of service.
Supplies
This support helps employees fulfill their job duties and may include physical items such as jeans, shoes, t-shirts, or hoodies. Alternatively, employers may provide coupons redeemable at stores exclusively for clothing purchases.
Social Security
Leaves
In Colombia, employees are entitled to a minimum of 15 days of paid leave per year, as specified in their employment contract. This leave becomes available after completing one year of service.
All employees are entitled to paid sick leave from their employer for the first two days at 100% of their regular pay. To receive sick leave payments, employees must obtain medical authorization from a Colombian social security entity. From the third day onwards, payments are covered by the social security system at a rate of 66.67%. However, the law mandates that the employer pays from day three to day 180, with reimbursement from the social security system. These regulations also apply to disability leave.
Maternity Leave
Employees are entitled to 18 weeks of paid maternity leave at 100.00% of the regular salary rate of pay. The employer pays this and is then fully reimbursed by social security.
Paternity Leave
Employees are entitled to two weeks of paid paternity leave of 100.00% of the regular salary rate of pay. The employer pays this and is then fully reimbursed by social security (EPS).
Employees can take five days’ leave in the event of their marriage.
Let's compare other vacation paid days...
Contract Terminations (Payroll in Colombia)
In Colombia, the termination process follows standard labor law requirements unless an employer has a valid reason for immediate dismissal, such as misconduct. Termination notices must be provided in writing and submitted to the relevant government authorities. Employers are required to make all necessary payments to departing employees on their last working day.
There are four main types of employment contract termination in Colombia. Termination with justifiable cause occurs when there is a valid reason for ending the contract, as defined by the Colombian Labor Code. Termination without justifiable cause happens when the employer decides to end the contract without a specific reason. Resignation occurs when the employee decides to end the contract on their own accord. Finally, expiration of term applies to fixed-term contracts that automatically end on the specified date unless renewed beforehand.
Don’t forget to download our free guide on payroll and hiring in Colombia, which includes all details and terms in accordance with Colombian labor laws.
Discharges
A procedure in which an employee is allowed to respond to allegations or disciplinary actions proposed by the employer. During this process, the employee can present their side of the story, provide explanations, and offer evidence to counter the claims made against them. This procedure ensures due process and fair treatment per Colombian labor laws.
Type of Contract Termination
Severance Pay
In Colombia, severance pay is required when applicable and is calculated based on the employee’s length of service and earnings rate.
The calculation of severance pay depends on the employee’s earnings compared to the minimum monthly wage.
Severance pay is an important aspect of employee rights when you hire in Colombia, providing a financial cushion during times of unemployment or career transitions.
- First year: Severance pay is often granted to employees upon termination of employment. It is usually based on length of employment for which an employee is eligible upon termination.
- +1 Year: Severance pay is often granted to employees upon termination of employment. It is usually based on length of employment for which an employee is eligible upon termination.
Hiring in Colombia - Remote Work
Many American companies hiring in Colombia find an excellent pool of professionals. Hiring remote workers in Colombia from the US has become increasingly common, thanks to the global shift towards remote work and Colombia’s growing reputation as a hub for skilled professionals.
Work from home
Remote work (Full-time)
It is implemented voluntarily but the employee’s right to demand a return to face-to-face work is waived.
The employer must provide equipment, software and information technology. A home office and work space must be established.
This new non-face-to-face work modality allows work to be performed entirely remotely. However, it is feasible to migrate existing contracts to this modality.
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