How to hire and pay EMPLOYEES IN

Colombia

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Before hiring

EMPLOYEES IN
Colombia

Before hiring employees in Colombia, there are a few important things you’ll need to know. Firstly, it’s important for employers to understand the unique income tax structure. Employee income is taxed in “units” and there’s a breakdown of units for each salary range. 

As an employer in Colombia, it’s important to know that the probationary period differs between fixed-term contracts and indefinite contracts. For fixed-term, probation periods can be no longer than one fifth of the initially agreed employment term.

We know this might sound overwhelming—but it doesn’t have to be. A solution like Oyster eliminates the barriers for you. With Oyster, you can automate compliance across 180+ countries, easily managing HR and payroll—all in one, easy-to-use platform. 

Get an overview of what you need to know when hiring in Colombia below.

At a Glance

CURRENCY

COP

OFFICIAL LANGUAGE

SPANISH

PAYROLL FREQUENCY

BI-WEEKLY / MONTHLY

PUBLIC HOLIDAYS

18

(based on region;
see here
)

EMPLOYER TAXES

25%

of gross salary

13th / 14th SALARY

Employees are entitled to a 13th salary equivalent to one month's salary.

Good to know

  • In Colombia, employee income is taxed in "units.” One tax unit is equal to 35,607 COP.
  • Employees are entitled to a 13th salary equivalent to one month's salary. This is generally split in two instalments and paid out half in June and half in December.
  • Post-employment non-compete agreements are generally invalid and unenforceable in Colombia.

Employment in

Colombia

Working hours and overtime

In Colombia, employees work eight hours daily, six days per week, and 48 hours weekly. However, the 8-hour daily limit does not apply to managerial and supervisory workers.

Overtime work is paid at 125% of the regular pay rate during the day and at 175% during the night. Overtime is limited to two hours per day and 12 hours per week.

Employment contracts
Probationary period

In Colombia, the probationary period for fixed-term contracts is no longer than 1/5th of the initially agreed-upon employment term. For indefinite contracts, the probationary period is two months.

Pensions
Notice period

The notice period for dismissal of employees with fixed-term contracts is 30 days. But when the employee is dismissed for poor performance, the required notice is just 15 days. In the case of misconduct or dismissal with a just cause, no notice is required.

IP protection and non-compete agreements

Post-employment non-compete agreements are generally invalid and unenforceable in Colombia.

Employment cost calculator

Holidays

01 Jan

New Year's Day

05 Jul

Feast of St Peter and St Paul

11 Jan

Epiphany Holiday

20 Jul

Independence Day

22 Mar

St Joseph's Day

07 Aug

Battle of Boyacá Day

01 Apr

Maundy Thursday

16 Aug

Assumption Day Holiday

02 Apr

Good Friday

18 Oct

Columbus Day Holiday

01 May

Labour Day

01 Nov

All Saints' Day Holiday

17 May

Ascension Day Holiday

15 Nov

Independence of Cartagena Holiday

03 Jun

Corpus Christi Holiday

08 Dec

Immaculate Conception

14 Jun

Sacred Heart Day

25 Dec

Christmas Day

01 Jan

New Year's Day

11 Jan

Epiphany Holiday

22 Mar

St Joseph's Day

01 Apr

Maundy Thursday

02 Apr

Good Friday

01 May

Labour Day

17 May

Ascension Day Holiday

03 Jun

Corpus Christi Holiday

14 Jun

Sacred Heart Day

05 Jul

Feast of St Peter and St Paul

20 Jul

Independence Day

07 Aug

Battle of Boyacá Day

16 Aug

Assumption Day Holiday

18 Oct

Columbus Day Holiday

01 Nov

All Saints' Day Holiday

Employer tax

In Colombia, an employer’s social contributions total 25% and include contributions to the pension fund, medical plan, labor risks, and family compensation funds. 

Individual tax

The income tax structure in Colombia, including the breakdown of tax units, is as follows:

Income between 0-1,090 tax units: 0

Income between 1,090-1,700 tax units + 116 tax units: 19%

Income between 1,090-1,700 tax units + 116 tax units: 19%

Income between 1,700- 4,100 tax units + 788 tax units: 28%

Income between 4,100- 8,670 tax units + 788 tax units: 33%

Income between 8,670- 18,970 tax units + 2,296 tax units: 35%

Income between 18,970- 31,000 tax units + 5,901 tax units: 37%

Income above 31,000 tax units + 10,352 tax units: 39%

Employees also make social security contributions of 8%.

Termination of employment

For employees with fixed-term agreements, severance pay should be equal to the salary owed to them until the end of agreement period.

For employees with an indefinite term agreement, earning more than 10 minimum legal monthly wages (COP 8,778,030), severance pay is equal to 20 days of salary for the first year of service and 15 days of salary for each additional year of service (proportional to the fraction of a year).

Start hiring employees in

Colombia

Setting up a business entity everywhere you want to hire a new employee isn’t scalable—it takes too long and the legal fees are high. At the same time, understanding and adhering to the local labor laws and employee expectations can be complex and time consuming. And it’s hard to find reliable information on up-to-date employment information for all the countries where you’re considering hiring. Not to mention tracking down invoices and managing employee contracts over email and spreadsheets—that gets messy fast. 

We can’t afford to take risks when it comes to compliance—we need to make sure we follow the local guidelines, especially when it comes to taxes and legalities. 

With Oyster, you can manage HR and payroll, and automate compliance across 180+ countries—all in one, easy-to-use platform.

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wherever they work in the world.

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