Colombia Confirms Minimum Salary for 2026
January 8, 2026
The Colombian government has implemented crucial updates to the minimum wage and UVT (Tax Value Unit), effective January 1, 2026.
Employer of Record (EOR) in Colombia: Onboard, pay and manage employees with Europortage
Everything you need to know about hiring employees in Colombia through an Employer of Record
What is an Employer of Record in Colombia?
An Employer of Record (EOR) in Colombia is a third-party organization that becomes the legal employer of your workforce in Colombia, allowing you to hire employees without establishing your own legal entity in the country.
When you partner with an EOR like Europortage, we handle all employment-related responsibilities including contracts, payroll, taxes, benefits, and compliance with Colombian labor laws (FLT). Your company maintains full operational control over day-to-day work and management of your team.
This arrangement is particularly valuable in Colombia, where labor laws are complex and constantly evolving. The EOR assumes all legal risks and ensures your operations remain 100% compliant with Colombian regulations, including mandatory benefits, tax withholdings, and termination procedures.
Key EOR Responsibilities
- Legal employer status and liability
- Benefits administration (mandatory& optional)
- Payroll processing and tax filing
- Employment contracts and compliance
What Our Colombia Employer of Record (EOR) Service Includes
Colombia's labor framework is governed by the CST (Código Sustantivo del Trabajo), one of the most comprehensive and employee-protective labor codes in the world. An EOR navigates this complex system on your behalf.
Under CST regulations, the EOR ensures full compliance with all mandatory requirements while you maintain complete control over your employees' daily work, performance management, and business objectives.
How EOR Works Managed by Europortage
- Employment contracts compliant with CST regulations
- 13th salary (aguinaldo) calculation and payment
- Social security management
- Termination process handling with all legal obligations
- Accurate payroll processing including all mandatory benefits
- cesantías (pension fund) contributions
- Vacation and PTO tracking per CST requirements
When to Use an EOR in Colombia
An Employer of Record is the ideal solution for various business scenarios
No Local Entity
You want to hire in Colombia without establishing a legal entity
Speed to Market
You need to onboard employees quickly (within 48 hours)
Compliance Concerns
You want to ensure 100% compliance with Colombian labor laws
Testing the Market
You're exploring the Colombian market before full commitment
Colombia at a glance
Essential facts for hiring in Colombia
Time Zone
GMT-5
Language
Spanish
Work Week (⚠️ Gradual Reduction Reformt)
42 hours (2026)
Business Climate
Stable & investor-friendly
- 3rd largest economy in Latin America
- Competitive labor costs across major cities
- Strong talent pool in tech, BPO, finance & engineering
Ready to Expand Your Team to Colombia?
Europortage’s Colombia EOR service handles all the complexity of CST compliance, so you can focus on growing your business.
Cost of Hiring in Colombia
Understanding the total cost of employment in Colombia is crucial for budgeting. Here’s a transparent breakdown of what to expect.
Employer Contributions
Total Employment Cost
Expect total employment costs to be approximately 35-45% on top of base salary
Europortage Service Fee
Transparent monthly fee starting from USD 400/employee
Save on Setup
Avoid USD 30,000+ in entity setup costs
Important Note
These costs are estimates and can vary based on industry, location, and specific employee arrangements. Contact us for a detailed cost calculation tailored to your hiring needs.
Colombia Employment Guide
Navigate Colombia’s comprehensive labor laws with confidence. Here are the essential employment regulations you need to know.
Important Note
This Employment Guide is provided for informational purposes only. When hiring through Europortage’s Employer of Record (EOR) service in Colombia, all payroll processing, tax withholdings, social security contributions, employment contracts, and compliance with Colombia labor law are managed directly by our local partner.
Payroll in Colombia: Taxes, EPS, AFP & more
Partner with an employer of record (EOR) is quite a game changer and can help you hire globally. The EOR will be the legal employer, which means they will handle employment contracts, onboarding process, compliance, benefits, payroll and more.
Minimum Wage
For 2026, the Colombian national government set the minimum monthly salary at 1.750.905 pesos, effective January 1, 2026. In the following table we present the values to be paid monthly and daily, per hour and night shift:
| Amount | Description | |
|---|---|---|
| Monthly minimum wage | COP 1,423,500 | Normal working day: 44 hours per week the first semester (42 hours from July 2026). |
| Minimum daily wage | COP 58.363 | Ordinary daytime working hours: 8 hours a day |
| Min. hourly wage | COP 7.959 | Regular working hours from 6 a.m. to 9 p.m. |
| Minimum hourly nightime wage | COP 10.744 | From 9 p.m. to 6 a.m. |
If you’re planning to hire in Colombia, it’s essential to stay updated on the latest minimum wage regulations. Check out our comprehensive article on the minimum wage in Colombia for all the details: Minimum Wage in Colombia.
Payroll cycle and frequency
In Colombia there is no rule that regulates the frequency of payroll payments. Employment contracts stipulate the form and frequency of payroll payments.
If the payday falls on a Saturday, or Sunday, or on a Public Holiday, then the salary must be paid before.
Bonus payments in Colombia
Colombia labor law mandates a 13th-month salary (Prima de servicio) for all employees. This extra payment equals to at least 30 days’ base salary. Under Colombian law (Law 50 of 1990, Article 306), employers must pay the 13th-month salary in two installments: 50% by June 30 and the remaining 50% by December 20.
Payday
If paid once a month, employees are usually paid on the last working day of the month.
Payment requirements
Salary payment must be done on a local bank account.
Payroll taxes
Colombia’s payroll system requires both employers and employees to make mandatory contributions to fund social security, severance, and other benefits.
EPS - Healthcare contribution (8,5%)
EPS, also known as Entidades Promotoras de Salud is Colombia public health system. All legal residents in Colombia must register with EPS. Both employers and employees contribute towards this program.
Employers must provide this coverage for all permanent employees, and employer contributions equal 8.5% of an employee’s income.
AFP - Pension fund contribution (12%)
Employers are also required to pay pension fund contribution on a monthly basis.
ARL - Professional Risks Insurance (0,3% - 8,7%)
In addition, legal employers must pay Professional Risks Insurance. Contributions to professional risks insurance (known as ARL contribution) depends on the company’s risk classification.
SENA - Gov. Education Program (2%)
SENA, which stands for Servicio Nacional de Aprendizaje, is the institution in charge of professional training in Colombia. Servicio Nacional de Aprendizaje is financed by a mandatory contribution from organizations, amounting to 2% of the wage payroll.
ICBF - Family Health Services Tax (3%)
The ICBF is the organ in charge of the children and vulnerable young citizen protection. The employer must contribute to this fund for each employee hired
CCF - Employee Benefit Fund (4%)
Furthermore, the employer must contribute 4% of the employee’s base salary to the compensation fund.
Family Compensation Fund: entities that promote social policies and administer the family subsidy, in order to provide benefits to employees (Law 21 of 1982).
The company is free to choose the entity in which it will affiliate its workers.
Employee Taxes
Residents of Colombia and individuals living abroad but earning income in Colombia are subject to tax on a monthly basis. Employees usually spend an average of 9% to 10% of their salaries on taxes and social security contributions.
Health care contribution (Salud Empleado) - 4%
Every employee whose work contract is governed by Colombian labour regulations must be affiliated to the integral social security system.
As such, for the mandatory health system, the employee should contribute 4%.
Pension fund contribution (Pensión Empleado) - 4%
In regards to the mandatory contribution to the pension system, the employee should contribute 4%.
Pension Solidarity Fund (Fondo de Solidaridad) - 1% to 2%
Employees who earn more than four minimum legal monthly salaries must contribute an additional 1% to cover the risks of workers with scarce resources. If the employee earn more than 16 minimum salaries, then the rate is 2%.
Income tax (Retención en la Fuente)
Employers in Colombia must withhold income tax (Retención en la Fuente) from their employees’ monthly salaries. This withholding works as an advance payment toward the employee’s annual tax obligation. The calculation is based on the employee’s monthly taxable income and follows a progressive tax scale.
Taxable income is determined after subtracting mandatory social security contributions (health and pension) and specific allowable deductions or exemptions from the gross salary. Common deductions and exemptions include:
Mandatory employee contributions to health and pension
Limited deductions for dependents
Limited deductions for mortgage loan interest
Limited voluntary contributions to pension funds
Limited voluntary contributions to health savings accounts
A general exemption equivalent to 25% of gross labor income (up to legal caps)
Monthly income tax withholding is calculated using a table based on Unidad de Valor Tributario (UVT) values. As taxable income crosses higher UVT thresholds, the corresponding marginal tax rate increases.
Retención en la Fuente Table for 2025 (Using Updated UVT Ranges)
| Taxable Income (UVT) | Approx. COP Range (2025) | Withholding Rate |
|---|---|---|
| 0 – 95 UVT | $0 – $4,731,000 | 0% (no withholding applied) |
| >95 – 150 UVT | >$4,731,000 – $7,470,000 | 19% on income exceeding 95 UVT |
| >150 – 360 UVT | >$7,470,000 – $17,928,000 | 28% on income exceeding 150 UVT |
| >360 – 640 UVT | >$17,928,000 – $31,872,000 | 33% on income exceeding 360 UVT |
| >640 – 945 UVT | >$31,872,000 – $47,060,000 | 35% on income exceeding 640 UVT |
| >945 – 2,300 UVT | >$47,060,000 – $114,538,000 | 37% on income exceeding 945 UVT |
| >2,300 UVT | >$114,538,000 | 39% on income exceeding 2,300 UVT |
Working Hours and Overtime Rules in Colombia
Working hours
Article 161 of the CST, as amended by Article 2 of Law 2101 of 2021, states that the maximum duration of the ordinary workday is forty-two (42) hours per week, which may be distributed by mutual agreement between the parties in 5 or 6 days per week, always guaranteeing a day of rest.
Law 2101 of 2021 reduced the maximum working day from 48 to 42 hours per week. The gradual reduction began on July 15, 2023 and will end on July 15, 2026.
Learn more about 🔗Working hours in Colombia.
Overtime
Overtime is paid at 1.25 times the normal wage, while overtime on public holidays is paid at 1.75 times.
Colombia Employee Benefits: Mandatory and Optional (According to CST)
Mandatory benefits
Colombia has a well-defined legal framework that protects workers and ensures fair compensation beyond base salary. Because of this, employers operating in Colombia must understand both mandatory benefits required by law.
13th month salary (Prima de servicios)
13th-month salary is a mandatory benefit in Colombia.
The legal employer must pay the 13th month salary in two installments: the first half paid within the first 15 days of June and the other half paid within the first 20 days of December.
These will be pro-rated when a full year has not been worked.
Statutory Severance Savings (Cesantiás)
Cesantías are statutory severance savings in Colombia that employers must fund for every employees. For each year worked, the employer must set aside one full monthly salary, calculated proportionally if the employee works less than a year.
In addition, employers must pay interest on cesantías at 12% per year (1% per month) directly to the employee.
Learn more about Staturory Severance Savings (Cesantiás).
Common Non-mandatory Benefits in Colombia
Employee mandatory benefits and conditions are legal rights. Then employer are not allowed to make change to the employment terms. However, the can add extra common benefits to attract and retain talents.
Note that depending on the company CBA, some non-mandatory benefits can actually be mandatory.
Private Health Insurance
Colombia’s social security system covers health insurance under a government plan.
Medical assistance is one of the benefits most valued by professionals. Then, employer can offer premium quality care through private health insurance to attract and retain talents.
Employer can offer their own plan or provide employees with stipends to subscribe to their own private health plan.
Meal vouchers
Even if meal voucher is not a statutory benefits in Colombia, it is a really common benefits. In general, the benefit is offered as a card with a cash value that can be used in the company’s canteen or in partner restaurants. Also, it enables the employee to buy food in grocery stores and supermarket. Today, food vouchers exist on reloadable chip cards similar to debit cards.
Learn more about 🔗 Benefits in Colombia
Paid Time Off, Leaves & Public Holidays in Colombia
Annual Leave & PTO
As most of countries, every company and employer in Colombia grant paid time off to their employees. Employees acquires the days at a rate of 1,25 day for each month of work totaling up to 15 days for the full year of work the first year.
Check our complete article: 🔗 PTO in Colombia.
Public holidays
Public holidays
| DATE | HOLIDAY NAME | STATUTORY HOLIDAY |
| 01/jan | New Year | Statutory |
| 08/jan | Three Kings Day | Statutory |
| 25/mar | St. Joseph’s Day | Statutory |
| 28/mar | Maundy Thursday | Statutory |
| 29/mar | Good Friday | Statutory |
| 01/mai | Labor Day | Statutory |
| 13/mai | Ascension Day | Statutory |
| 03/jun | Corpus Christi | Statutory |
| 10/jun | Sacred Heart Day | Statutory |
| 01/jul | St. Peter and St. Paul’s Day | Statutory |
| 20/jul | Independance Day | Statutory |
| 07/ago | Battle of Boyacá Day | Statutory |
| 19/ago | Assumption of the Virgin Mary | Statutory |
| 14/out | Columbus Day | Statutory |
| 04/nov | All Saints Day | Statutory |
| 11/nov | Cartagena Independence Day | Statutory |
| 08/dez | Immaculate Conception Day | Statutory |
| 25/dez | Christmas day | Statutory |
Sickness and disability leave
Employees in Colombia are entitled to maximum 180 days of sick leave.
During the leave period, the employee is entitled to receive:
- Two-thirds (67%) of their earnings for the first 90 days
- Half (50%) of their earnings for the remainder of the sick leave
In Colombia, the employer must cover the cost of the first two days of an employee’s sick leave. From the third day until the end of the leave, payments are handled by the Colombian health system.
To qualify for these benefits, applicants must provide a medical certificate from social security confirming their inability to work.
Learn more:🔗 Navigating Sick Leave in Colombia.
Paternity and maternity leave
Female pregnant employee are entitled to 18 weeks of maternity leave. During that time, they receive their regular wage.
Male employees are entitled to enjoy a paid paternity leave of two weeks when the child is born.
Learn more about 🔗 Parental leave in Colombia.
Onboarding regulations in Colombia
Employment agreements in Colombia
In Colombia, employment contracts can be either written or verbal, but having a written employment agreement is strongly recommended to clearly define employment terms and avoid disputes. Written contracts typically specify salary, job duties, working hours, benefits, and contract duration.
All employees must be registered with the Colombian social security system, including health insurance (EPS), pension funds, and occupational risk insurance (ARL). This registration is mandatory and establishes the legal employment relationship.
Colombian labor regulations also require pre-employment and periodic medical exams to ensure that employees are physically and mentally fit for their roles, particularly in positions involving occupational risks.
To stay compliant when hiring in Colombia, companies should:
Provide a written employment agreement (strongly recommended)
Register employees with social security entities (EPS, pension, ARL) (mandatory)
Conduct required occupational medical exams (mandatory)
Termination, Notice & Severance in Colombia
Termination Requirements
Termination in Colombia demands strict compliance.
The process starts with identifying the legal reason for termination. Employers must document the cause clearly and communicate it to the employee in a transparent way.
Additionally, companies must calculate and pay all mandatory items on the final payroll. Employers must also ensure social security contributions are paid up to the last day worked. The settlement must be delivered immediately to avoid sanctions.
Because mistakes often trigger UGPP investigations, businesses must handle terminations with precision.
Termination notice period
Unlike many countries, Colombia does not use a universal notice period for most dismissals.
Severance & Severance pay in Brazil
Severance pay (cesantías) is a core benefit in Colombia. Employers must calculate and pay it at contract termination:
Employees earn one month of salary per year of service. The amount is proportional for incomplete years.
- Employers must also pay 12% annual interest on severance, proportional to time worked.
If termination happens without just cause, the employer owes an additional indemnity.
Severance is highly regulated, and mistakes often lead to fines or labor claims. Europortage ensures accurate calculations and full compliance.
Check our complete guide on end of employment in Colombia
Important notes
CST Law
All employment relationships in Colombia are governed by the Colombian Labor Law (Código Sustantivo del Trabajo – CST).
Important exemption note
Employers are exempt from paying SENA and ICBF contributions for employees earning up to 10 times the monthly minimum wage (10 SMMLV).
Labor Courts
Specialized justice system handles all employment disputes
EOR vs Entity Setup vs Independent Contractor in Colombia
Understanding your options is crucial for success in Colombia. Compare the three main approaches to hiring Colombian talent and discover which solution fits your business needs.
EOR (Employer of Record)
Setup Time
24-48 hours
Compliance risk
Very Low
Cost
$400/month per employee
Best Scenarios
✔ Testing the Colombian market
✔ Hiring 1-50 employees quickly
✔ Need immediate compliance
✔ No long-term commitment yet
✔ Remote teams across Colombia
Entity
Setup
Setup Time
3-6 months
Compliance risk
Medium
Cost
$15,000-$50,000 setup + ongoing costs
Best Scenarios
✔ Long-term commitment to Colombia
✔ Large team (>50 employees)
✔ Physical office needed
✔ Significant local operations
✔ Strategic market presence
Independent Contractor
Setup Time
1-2 weeks
Compliance risk
Very High
Cost
$0 setup (contractor rates vary)
Best Scenarios
✔ Short-term projects only
✔ Specialized consulting work
✔ True independence required
✔ Limited engagement scope
✔ Accepts classification risks
Critical Warning about Independent Contractors in Colombia
Colombian labor law is extremely protective of workers. Misclassifying employees as independent contractors can result in severe penalties, back payments, and legal disputes. Courts often reclassify contractors as employees if there's evidence of:
❌ Regular working hours or schedules
❌ Direct supervision or management control
❌ Exclusivity or non-compete requirements
❌ Using company equipment or working from company premises
Latest Colombia HR, Payroll & Compliance Insights
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Why Choose Europortage?
Expanding into Colombia requires a partner who understands both local complexities and international business needs. Europortage combines deep local expertise with global standards to deliver exceptional employer of record services. Our Colombia EOR solution is built on years of experience helping companies successfully enter and scale in the Colombian market. We handle the complexity so you can focus on what matters most—growing your business and managing your team.
Local Expertise
Deep knowledge of Colombian employment law and business culture
Fast Deployment
Hire employees in as little as 24 hours
Proven Track Record
15+ years of experience in international employment
Dedicated Support
Bilingual support team (Spanish / English) available during business hours
Transparent Pricing
No hidden fees or surprise charges
100% Compliance Guarantee
Full FLT adherence with continuous legal monitoring and updates
Frequently Asked Questions (FAQ)
Get answers to common questions about hiring in Colombia with an Employer of Record
What are my options to hire workers in Colombia?
Companies expanding to Colombia usually have four hiring options:
1. Hire and pay from HQ: The worker stays in Colombia but is paid directly by the parent company.
👉 Cons: This may seem easy, but it’s not compliant long-term. Payroll and taxes can’t be managed correctly if the worker isn’t a tax resident of the HQ country.
2. Engage independent contractors: Workers register locally as freelancers and invoice your company.
👉 Cons: This is not compliant for full-time or exclusive work. Misclassification can trigger audits, fines, and back payments.
3. Create a local entity: You establish a subsidiary or branch in Colombia, register with tax authorities, and manage payroll internally.
👉 Cons: Complex, expensive, and slow. You’ll need legal representation, accounting support, and continuous regulatory updates.
4. Partner with an Employer of Record (EOR) in Colombia: An EOR like Europortage legally employs your workers on your behalf. We handle payroll, taxes, and HR compliance.
👉 Cons: Slightly higher monthly costs than internal payroll—but full compliance and speed make it worthwhile.
How long does it take to set up a company in Colombia?
Opening a local entity often takes 8–12 weeks.
You must:
- Register the company.
- Obtain the NIT (tax ID).
- Register with social security and pension entities.
- Set up payroll.
- Comply with monthly filings.
Because HR and payroll compliance in Colombia is complex, most foreign companies choose EOR services to avoid delays and risks.
Can I employ people as independent contractors in Colombia?
Yes, but only in very specific cases.
If the contractor:
Works full time,
Reports to a manager,
Follows a schedule,
Uses your tools,
Colombian law can reclassify them as employees.
This may lead to:
Back payments of severance and social benefits,
Social security debts,
Fines from the UGPP,
Legal claims for wrongful classification.
If you need long-term, full-time workers, hiring through Europortage as EOR is safer.
What does HR compliance mean in Colombia?
HR compliance involves respecting all labor, payroll, and social security regulations, including:
Maximum working hours and overtime rules
Mandatory benefits (health, pension, severance, bonus)
Payroll frequency and reporting
Vacation and leave entitlements
Termination procedures and severance calculations
Colombia has strict inspections from the Ministry of Labor and the UGPP.
Non-compliance leads to financial penalties, audits, and potential litigation.
How much does it cost to employ someone in Colombia
Employer costs vary from 30% to 51% above gross salary, including:
Health contribution (8.5%)
Pension contribution (12%)
Occupational hazard insurance (ARL)
Family compensation fund (4%)
Sena + ICBF contributions for large employers
Severance (cesantías)
Interest on severance
Service bonus (prima)
Colombia is cost-competitive, but compliance requires precise calculations.
What does “Employer of Record” mean in Colombia?
An EOR becomes the legal employer of your workers in Colombia.
Europortage:
Issues employment contracts compliant with Colombian law.
Runs payroll and manages taxes.
Registers employees with health, pension, and risk entities.
Manages benefits, leave, and onboarding.
Ensures full labor compliance.
You manage the employee’s day-to-day work.
Europortage manages everything legal and administrative.
Who pays and files employees’ taxes and social security in Colombia?
Europortage handles all employer obligations, including:
Health contributions
Pension contributions
ARL risk insurance
Family compensation funds
Withholding income tax
Mandatory payroll reports
Your role:
Transfer payroll funds before the cutoff date and manage performance and workload.
How does Europortage ensure compliance as an EOR in Colombia?
Europortage works with local legal experts and payroll specialists.
We ensure:
Compliant contracts
Correct onboarding
Accurate payroll and benefit calculations
Proper tax and social security filings
Updated processes aligned with local law
Protection against misclassification
Secure handling of employee data
We stay ahead of legal changes so you stay compliant automatically.
What are my legal responsibilities when using Europortage as EOR?
Your responsibilities include:
Managing the employee’s tasks, goals, and performance
Providing work tools and support
Respecting Colombian workplace guidelines (remote or on-site)
Funding payroll before the processing cutoff
Europortage handles everything else.
Do employees get all their rights and benefits under an EOR in Colombia?
Absolutely.
Employees hired through Europortage receive full statutory rights, including:
Health and pension contributions
Occupational risk coverage
Severance fund
Severance interest
Service bonus
Paid vacation
Paid leave
Protection under Colombian labor law
This ensures employees feel safe, supported, and fully compliant.
Still Have Questions?
Our Colombia EOR specialists are here to help. Schedule a free consultation to discuss your specific needs.
Ready to Expand Your Team in Colombia ?
Join hundreds of companies that trust Europortage to handle their Colombia employment needs. Start hiring in Colombia today without the complexity of setting up a local entity.
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