Payroll in Colombia

In Colombia, salaries must be paid in equal, completed periods no longer than one month. Daily wages have a maximum weekly payment interval. Monthly payroll is common, and it is also the longest gap the law allows for salaried staff.

Payday and payslips

Agree the actual payroll dates in the contract and keep them in writing. Keep salary, employee deductions, allowances and employer charges clear in the payroll records, so each payslip shows its pay components and deductions on separate lines.

Overtime and night premiums are due with the relevant period's salary or, at the latest, the following period's salary. The employee's payday is one date. Your remittance deadlines are different dates. Keep them apart in your payroll calendar.

Extra payments: prima, cesantías and interest

There is no universal fourteenth-month salary. The statutory extra payments are the prima de servicios, cesantías and interest on cesantías, and they sit alongside the ordinary monthly salaries.

Keep the interest calculation and payment separate from the fund deposit. Additional Christmas or performance bonuses depend on the applicable agreements and policies.

Remitting contributions and tax

Employees pay 4% for pension and 4% for health, withheld from gross pay. Employer pension is 12%, and the family compensation fund is 4%. Employers also pay occupational-risk insurance at the rate assigned to the activity and risk class. Qualifying employers may be exempt from employer health, SENA and ICBF contributions for employees earning below ten monthly minimum wages. Ask the employing entity to document that eligibility.

Health and pension contributions use a statutory base, generally bounded by one and twenty-five monthly minimum wages. At the 2026 wage floor those amounts are COP 1,750,905 and COP 43,772,625. UGPP checks omitted registrations, an understated base and late monthly payments.

For income tax, employment withholding follows the Article 383 table, with marginal rates from 0% to 39%. No withholding applies under that table up to 95 UVT of the relevant monthly base, which is COP 4,975,530 in 2026. The base is not necessarily gross salary. Remittance deadlines and filing forms are not covered here, so confirm the current calendar with the tax authority (DIAN) and the contribution operator before your first pay run.

Working-time rules that affect pay

From 15 July 2026 the ordinary weekly maximum is forty-two hours, without reducing salary or benefits. The general daily maximum is eight hours, with flexible arrangements allowing four to nine daily hours within the weekly conditions.

• Daytime overtime carries a 25% premium and night overtime a 75% premium over the ordinary daytime rate. Ordinary night and night-overtime premiums are not added together.
• Night work runs from 7 p.m. to 6 a.m. and attracts a 35% premium, subject to statutory exceptions.
• Overtime is generally limited to two hours a day and twelve a week, with sector exceptions. Keep the required overtime record.
• From 1 July 2026, work on the mandatory rest day or a public holiday carries a phased premium of 90%. Calculate the actual shift rather than applying one flat multiplier.

A remote location does not remove night premiums. Plan the actual Colombian schedule before agreeing to cover another country's business hours.

Colombia taxes employment income through a withholding table applied by the employer each month. There is no single flat rate that fits every employee. The top personal income tax rate is 39%, and the amount withheld depends on the employee's taxable base and tax position.

How income tax withholding works

The employment-withholding table (Article 383) has marginal rates from 0% to 39%. It is expressed in UVT, the tax unit, which is COP 52,374 in 2026. No withholding applies under this table up to 95 UVT of the relevant taxable monthly base. That is COP 4,975,530 in 2026.

The base is not necessarily gross salary. Permitted deductions, exemptions, the chosen withholding procedure and the employee's tax status all matter. The dossier for this guide does not give the individual band thresholds above the zero band, so take them from the current official table rather than from a calculator or another employee's payslip.

Payroll withholding is also separate from the final annual income-tax calculation. Withholding is an advance on that liability, not the final figure.

Allowances and credits

Permitted deductions and exemptions reduce the base before the table is applied. The dossier does not list which deductions or credits an employee can claim, or their limits. Confirm the employee's eligible items and the withholding procedure they have chosen before you run payroll.

Employee deductions

Ordinary employee deductions are taken from gross pay. They are 4% for pension and 4% for health on the applicable contribution base, which makes 8% in total. Some higher-paid employees also owe a solidarity-fund contribution, and income-tax withholding comes on top.

The contribution base is generally bounded by one and twenty-five monthly minimum wages. At the 2026 wage floor of COP 1,750,905, those limits are COP 1,750,905 and COP 43,772,625. Special arrangements and payroll events can change the calculation.

Employer contributions are additional employer costs. They are not deducted from the employee's pay.

Employer payroll charges and business taxes

Employers also pay 2% to SENA and 3% to ICBF on the relevant payroll base. Qualifying corporate income-tax declarants can be exempt from employer health, SENA and ICBF contributions for employees who earn less than ten monthly minimum wages. The family compensation contribution is not removed by that exemption. Ask your provider or adviser to document your eligibility.

The corporate tax rate is 35% and VAT is 19%. These are business and transaction taxes. Neither is a percentage taken out of an employee's salary.

For an ordinary employment contract in Colombia, the employer contributions in the dossier are pension at 12%, the family compensation fund (caja de compensación) at 4% and occupational risk insurance. The occupational risk rate depends on the activity, so the 0.522% shown below is the class I rate. The headline employer rate in the dossier is 16.5% of gross pay. Employer health, SENA and ICBF contributions apply unless the employer qualifies for an exemption.

Employer and employee rates

The table shows the standard rates. Employee contributions are withheld from gross pay. Employer contributions are an extra cost on top of salary.

Health totals 12.5%, split between 8.5% for the employer and 4% for the employee. Pension totals 16%, split between 12% and 4%. Higher-paid employees may also owe solidarity-fund contributions, and income-tax withholding is separate.

Contribution base: floor and ceiling

Ordinary health and pension contributions use a statutory base, generally bounded by one and twenty-five monthly minimum wages. At the 2026 minimum wage of COP 1,750,905, the reference amounts are COP 1,750,905 and COP 43,772,625. Special arrangements and payroll events can change the calculation. UGPP checks omitted registrations, an understated base and late monthly payments, so a rate alone does not give the correct bill.

The exemption for employer health, SENA and ICBF

Qualifying corporate income-tax declarants can be exempt from employer health, SENA and ICBF contributions for employees who individually earn less than ten monthly minimum wages. Exactly ten minimum wages does not meet the test. The exemption does not remove the family compensation contribution, the employee's 4% health contribution or the duty to arrange coverage and report correctly. Different conditions apply to other employer types. Ask the employing entity to document its eligibility instead of assuming one reduced rate for every hire.

What is not included

The contribution rates above do not cover prima, cesantías and interest, paid leave, fees or agreed benefits. Those are separate costs, and you should add them to any budget. The 0.522% risk rate is a class I figure. The OECD describes the statutory range as 0.348% to 8.7%, so use the rate actually assigned to the employee's work.

Worked cost example

Assume a COP 5,000,000 monthly salary and contribution base, ordinary employment and a 0.522% work-risk rate.

Both subtotals are a floor, not the full budget. Add prima, cesantías, interest, leave-related liabilities, fees and agreed benefits. The example excludes overtime, bonuses and exit compensation.

Annual leave

Ordinary employees earn 15 consecutive working days of paid annual leave for each year of service. Better contractual or collective terms can add to that minimum. Public holidays and non-working rest days are not automatically counted as leave days, so apply the employee's actual working schedule. Certain hazardous occupations have special entitlements.

The employer schedules leave within the following year and gives at least 15 days' advance notice. At least six consecutive working days must be taken each year and cannot be carried over. Other days can generally be carried over by agreement for up to two years, with specified four-year exceptions. On the employee's request, up to half the leave may be paid out under a written agreement. Unused leave is settled proportionately at termination, and variable pay needs the statutory averaging calculation.

Public holidays

The Labour Code lists 18 civil and religious holidays with paid rest, including New Year, Labour Day, Independence Day, Christmas and Easter-related observances. Several religious and commemorative holidays move to the following Monday. Use the observed dates for the payroll year when planning leave and pay.

Work on a mandatory rest day or public holiday carries a premium. From 1 July 2026 the phased premium is 90% over the ordinary rate, and it reaches 100% from 1 July 2027. An employer may adopt 100% earlier. The rest day is Sunday unless another day is agreed in writing. Compensatory rest and any night or overtime treatment depend on the shift, so calculate the actual hours instead of applying one flat multiplier.

Sick leave

For certified incapacity not related to work, the employer normally covers the first two days and the EPS (health fund) covers the qualifying period from day three. The statutory rate is two thirds of the relevant pay base through day ninety, then one half through day 180, subject to the applicable minimum-pay protection.

The employer handles the claim process. Check coverage, contribution eligibility and medical certification. Longer incapacity and work-related illness have separate rules, and the dossier does not set them out, so confirm them before processing those cases.

Maternity, paternity and parental leave

Maternity leave normally lasts 18 weeks at the applicable salary rate. The usual pattern is one week before birth and the remainder after, with medically required adjustments. Premature birth adds the relevant gestational difference. Multiple births or a child with a disability add two weeks. Adoption and specified cases where the father takes over care have corresponding rights. Confirm EPS recognition, contribution history and the required documents.

Paternity leave is currently two weeks for qualifying births and adoption. A proposal to increase it progressively to twelve weeks has passed a first debate. It is not the current entitlement, so do not apply it.

Eligible parents can distribute the last six weeks of maternity leave under the statutory shared-leave conditions. The mother's first twelve weeks are protected, and the father's own leave cannot be reduced through the arrangement. A separate flexible option exchanges part of the leave for part-time work over a longer period. Neither is automatic extra full-pay leave, and both need employer agreement, medical support and documents.

Other leave and related payroll items

Bereavement leave is five paid working days after the death of a spouse, permanent partner or qualifying relatives, with official evidence due within thirty days. Breastfeeding breaks are two paid 30-minute breaks in the child's first six months, then one paid 30-minute break until age two where the statutory conditions are met. A separate ten-working-day childcare leave applies in specified severe illness, serious accident or palliative-care cases. The 2025 reform also requires paid leave for events such as a proven serious domestic emergency, urgent medical appointments and official legal summonses. Check eligibility and evidence in each case.

The service bonus (prima de servicios) is thirty days of salary per year, paid half by 30 June and half by 20 December. Cesantías accrue at one month of salary per year and are deposited in the employee's chosen fund before 15 February of the following year. Interest of 12% a year on the cesantías balance is paid in January.

Compliance risk in Colombian payroll sits mainly in contract form, social security contributions, the annual benefit cycle, working-time records and exits. Check each against the facts below before you hire or pay anyone.

Employment contracts and written terms

Indefinite employment is the standard hiring form under the 2025 reform. A written contract should identify the parties, role, work location, salary, payment schedule, duration and termination terms, with a copy for each party. Record working hours, remote arrangements, benefits and applicable policies as well. Arrange an appropriate Spanish version for local administration and disputes.

Fixed-term and defined-task contracts must be in writing. Fixed-term contracts cannot run beyond four years through renewals. A defined-task contract must describe the work precisely, because missing conditions or continued work can create indefinite employment.

Probation must be written and cannot exceed 2 months. For a fixed term shorter than one year, it is also limited to one fifth of the initial term. You cannot repeat probation in successive contracts with the same employer.

Registration and contributions

Employees must be registered and contributions reported correctly. Ordinary health and pension contributions use a base generally bounded by one and twenty-five monthly minimum wages. At the 2026 wage floor of COP 1,750,905, those reference amounts are COP 1,750,905 and COP 43,772,625. UGPP checks omitted registrations, an understated contribution base and late monthly payments.

Qualifying employers can be exempt from employer health, SENA and ICBF contributions for employees earning less than ten monthly minimum wages. Exactly ten does not qualify. The exemption never removes the employee's 4% health share or the family compensation contribution. Occupational-risk insurance is paid at the rate assigned to the activity, so use the actual assigned rate.

Payment and filing deadlines

Pay salaries in equal, completed periods no longer than one month and agree the dates in the contract. Overtime and night premiums are due with that period's salary or, at the latest, the next period's.

• Prima de servicios: half by 30 June and half by 20 December.
• Cesantías: calculate the balance at 31 December and deposit it in the employee's chosen fund before 15 February.
• Interest on cesantías: 12% annual interest, paid during January of the following year.

The dossier does not give monthly social security filing dates. Confirm the payment calendar for your contribution reporting before your first payroll.

Records

Keep the overtime record the law requires and provide it with payment evidence when asked. Keep payroll records that show salary, employee deductions, allowances and employer charges separately. Keep the written contract, probation clause and any written benefit terms. For retention periods, check with local counsel, as the dossier gives none.

Notice and termination

An employee ending an indefinite contract gives thirty calendar days' notice. The employer cannot agree a penalty for missing it. There is no general employer notice rule based only on service. A fixed-term non-renewal normally needs at least thirty days' notice before expiry, and specified just-cause grounds under Labour Code Article 62 need at least fifteen days' notice.

Dismissal without just cause normally requires statutory compensation, but paying it does not override protected status or required authorisations. Pregnancy and maternity, qualifying union roles and health or disability circumstances restrict dismissal. Collective dismissals need prior Ministry of Labour authorisation. Disciplinary sanctions need written allegations, access to evidence, at least five days to respond and a reasoned decision.

The final settlement covers outstanding wages, premiums, unused leave, proportionate prima, cesantías and interest, plus any dismissal compensation. Provide the employment certificate and contribution records. Do not assume a universal fifteen-day grace period.