Colombia Payroll Information – Deel Global Payroll

Updated on: 2025/08/04 14:26 (UTC)

Overview

Colombia, which officially is known as the Republic of Colombia, is located in South America. Colombia is the only country in South America that borders both the Caribbean Sea and the Pacific Ocean. Colombia also is bordered by Panama to the northwest, Ecuador to the south, Peru to the southwest, and Venezuela and Brazil to the East. In addition to its capital city of Bogotá, Colombia has 32 administrative divisions, or departments, that are divided up into municipalities.

Colombia’s currency is the Colombian peso.

Employers in Colombia are required to withhold taxes at source for income tax and social tax contributions for employees, in addition to making their own contributions to social taxes. A tax on total payroll also is assessed. Employers must also uphold labor laws that affect compensation and benefits for employees.

Even though the Colombian peso is the currency of Colombia, some components of Colombia’s tax system are denoted in a unit other than the Colombian peso. To calculate applicable amounts for tax purposes, the National Tax and Customs Directorate (Dirección de Impuestos y Aduanas Nacionales, abbreviated as DIAN) of Colombia uses a system of measurement known the Tax Value Unit (Unidad de Valor Tributario, abbreviated as UVT). The amount of Colombian pesos that equals one UVT is annually determined by the directorate.

Foreign workers in Colombia are subject to different income taxation than Colombian citizens. Foreign workers are subject to income tax on Colombian sourced income at a flat rate instead of on a progressive scale. Foreign workers generally are subject to the same social tax rates and labor laws as Colombia nationals.

Colombian citizens working in the United States are covered by U.S. tax law with possible work status exclusions applying. Work within the U.S. states and territories is covered by various labor laws.

CURRENCY DETAILS

The currency of Colombia is the Colombian peso (COL$), also known in Colombia simply as the peso. The internationally recognized three-letter currency code for the Colombian peso is COP. The plural form of Colombian peso is Colombian pesos.

In Colombia, amounts of Colombian pesos are commonly written using the general dollar currency symbol $, which in addition to being used for all dollar currencies is used for some, but not all peso currencies. When an amount of Colombian pesos is written in Spanish, the most prevalent language in Colombia, using the currency symbol $, the symbol precedes the numerical value with no space between the numerical value and symbol.

When an amount of Colombian pesos is written using the currency symbol COL$, which is commonly done in Spanish and which is the predominant currency symbol used in English for the Colombian peso, the symbol precedes the numerical value with no space between the numerical value and symbol. The variants of the currency symbol COL$, which include Col$, Col.$, $COL, $Col, $Col., and COL $ have the same placement treatment as the currency symbol COL$. The currency symbol COP$ and its variants COP $ and $COP sometimes are used for the Colombian peso, and these symbols have the same placement treatment as the currency symbol COL$.

One hundredth ( ¹ ⁄ ₁₀₀ ) of a Colombian peso is referred to as a centavo, with the plural form of centavos, although transactions involving Colombian currency do not typically include amounts other than whole numbers of Colombian pesos.

When amounts of Colombian pesos are written in Spanish, the comma that in English separates the thousands place from the hundreds place instead usually is rendered as a dot (.), although in some Colombian dialects of Spanish, the numbers in the thousands place and hundreds place are adjacent to each other with no symbol or space between them.

TAXES

The federal government generally enacts laws relating to income tax, social taxes and other taxes in Colombia.

The tax year is the calendar year, from Jan. 1 to Dec. 31.

Coronavirus (Covid-19) Guidance: Employers may reduce the pension contribution rate for wages paid in April and May 2020 to 3%, consisting of a 2.25% employer contribution rate and a 0.75% employee contribution rate.

Income Taxes

Income tax in Colombia is administered by the National Tax and Customs Directorate (Dirección de Impuestos y Aduanas Nacionales, abbreviated as DIAN) and the Ministry of Finance and Public Credit (Ministerio de Hacienda y Crédito Público).

Coverage: Individuals are considered tax residents in Colombia if they are present for 183 days or more in the country within a period of 365 days. Colombian residents are taxed on global income. All employees in the public and private sector, including nonresidents, are subject to the income tax law. Employees are defined as individuals receiving 80% of their total income from economic activities under the supervision of an employer.

Rates and Thresholds: Income tax rates are levied on a progressive scale, with rates ranging from zero to 39%. Colombia has a set of progressive personal income tax brackets applicable to income tax withholding from employment income that differs from its general set of progressive personal income tax brackets.

Each of Colombia’s personal income tax brackets contains a range of income based on the Tax Value Unit, known in Spanish as a Unidad de Valor Tributario (UVT). The equivalent worth of a Tax Value Unit in Colombian pesos is subject to annual adjustment, with the valuations available from the National Tax and Customs Directorate.

Effective for 2021, the worth of one UVT is equal to COL$36,308. Effective for 2020, the worth of one UVT was equal to COL$35,607.

The income tax withholding brackets use ranges of monthly income instead of ranges of annual income, which are used by the brackets generally in effect for employment income.

Effective for 2021, with regard to income tax withholding on employment income, Colombia’s personal income tax rates for employment income paid to residents and minimum and maximum amounts of monthly income for each tax bracket are as follows:

Range of Monthly Income in Tax Value Units	Income Tax Rate Rendered with Tax Value Units	Range of Monthly Income Based on Colombian Peso Equivalence	Income Tax Rate Rendered with Colombian Pesos
Up to 95 UVT	Zero	Up to COL$3,449,260	Zero
More than 95 UVT and up to 150 UVT	19%	More than COL$3,449,260 and up to COL$5,446,200	19%
More than 150 UVT and up to 360 UVT	10 UVT, plus 28% on the amount in excess of 150 UVT	More than COL$5,446,200 and up to COL$13,070,880	COL$363,080, plus 28% on the amount in excess of COL$5,446,200
More than 360 UVT and up to 640 UVT	69 UVT, plus 33% on the amount in excess of 360 UVT	More than COL$13,070,880 and up to COL$23,237,120	COL$2,505,252, plus 33% on the amount in excess of COL$12,163,180
More than 640 UVT and up to 945 UVT	162 UVT, plus 35% on the amount in excess of 640 UVT	More than COL$23,237,120 and up to COL$34,311,060	COL$5,881,896, plus 35% on the amount in excess of COL$23,237,120
More than 945 UVT and up to 2,300 UVT	268 UVT, plus 37% on the amount in excess of 945 UVT	More than COL$34,311,060 and up to COL$83,508,400	COL$9,730,544, plus 37% on the amount in excess of COL$34,311,060
More than 2,300 UVT	770 UVT, plus 39% on the amount in excess of 2,300 UVT	More than COL$83,508,400	COL$27,957,160, plus 39% on the amount in excess of COL$83,508,400

Effective for 2020, with regard to income tax withholding on employment income, Colombia’s personal income tax rates for employment income paid to residents and minimum and maximum amounts of monthly income for each tax bracket were as follows:

Range of Monthly Income in Tax Value Units	Income Tax Rate Rendered with Tax Value Units	Range of Monthly Income Based on Colombian Peso Equivalence	Income Tax Rate Rendered with Colombian Pesos
Up to 95 UVT	Zero	Up to COL$3,382,665	Zero
More than 95 UVT and up to 150 UVT	19%	More than COL$3,382,665 and up to COL$5,341,050	19%
More than 150 UVT and up to 360 UVT	10 UVT, plus 28% on the amount in excess of 150 UVT	More than COL$5,341,050 and up to COL$12,818,520	COL$356,070, plus 28% on the amount in excess of COL$5,341,050
More than 360 UVT and up to 640 UVT	69 UVT, plus 33% on the amount in excess of 360 UVT	More than COL$12,818,520 and up to COL$22,788,480	COL$2,456,883, plus 33% on the amount in excess of COL$12,818,520
More than 640 UVT and up to 945 UVT	162 UVT, plus 35% on the amount in excess of 640 UVT	More than COL$22,788,480 and up to COL$33,648,615	COL$5,768,334, plus 35% on the amount in excess of COL$22,788,480
More than 945 UVT and up to 2,300 UVT	268 UVT, plus 37% on the amount in excess of 945 UVT	More than COL$33,648,615 and up to COL$81,896,100	COL$9,542,676, plus 37% on the amount in excess of COL$33,648,615
More than 2,300 UVT	770 UVT, plus 39% on the amount in excess of 2,300 UVT	More than COL$81,896,100	COL$27,417,390, plus 39% on the amount in excess of COL$81,896,100

Effective since Jan. 1, 2019, Colombia has a unified set of progressive personal income tax brackets for residents that generally are in effect outside the context of income tax withholding on employment income. Effective until Dec. 31, 2018, Colombia had a set of progressive personal income tax brackets for residents’ income from labor and pensions and had a separate set of progressive personal income tax brackets for residents’ capital income and income from non-labor activities. The general personal income tax brackets in effect since Jan. 1, 2019, like the predecessor brackets for labor and pensions income and the predecessor brackets for capital income and non-labor income, use ranges of annual income instead of ranges of monthly income, which are used by the income tax withholding brackets.

Effective for 2021, Colombia’s progressive personal income tax rates that generally are in effect for residents’ income and minimum and maximum amounts of annual income for each tax bracket are as follows:

Range of Annual Income in Tax Value Units	Income Tax Rate Rendered with Tax Value Units	Range of Annual Income Based on Colombian Peso Equivalence	Income Tax Rate Rendered with Colombian Pesos
Up to 1,090 UVT	Zero	Up to COL$39,575,720	Zero
More than 1,090 UVT and up to 1,700 UVT	19%	More than COL$39,575,720 and up to COL$61,723,600	19%
More than 1,700 UVT and up to 4,100 UVT	116 UVT, plus 28% on the amount in excess of 1,700 UVT	More than COL$61,723,600 and up to COL$148,862,800	COL$4,211,728, plus 28% on the amount in excess of COL$61,723,600
More than 4,100 UVT and up to 8,670 UVT	788 UVT, plus 33% on the amount in excess of 4,100 UVT	More than COL$148,862,800 and up to COL$314,790,360	COL$28,610,704, plus 33% on the amount in excess of COL$148,862,800
More than 8,670 UVT and up to 18,970 UVT	2,296 UVT, plus 35% on the amount in excess of 8,670 UVT	More than COL$314,790,360 and up to COL$688,762,760	COL$83,363,168, plus 35% on the amount in excess of COL$314,790,360
More than 18,970 UVT and up to 31,000 UVT	5,901 UVT, plus 37% on the amount in excess of 18,970 UVT	More than COL$688,762,760 and up to COL$1,125,548,000	COL$214,253,508 plus 37% on the amount in excess of COL$688,762,760
More than 31,000 UVT	10,352 UVT, plus 39% on the amount in excess of 31,000 UVT	More than COL$1,125,548,000	COL$375,850,416, plus 39% on the amount in excess of COL$1,125,548,000

Effective for 2020, Colombia’s progressive personal income tax rates that generally are in effect for residents’ income and minimum and maximum amounts of annual income for each tax bracket were as follows:

Range of Annual Income in Tax Value Units	Income Tax Rate Rendered with Tax Value Units	Range of Annual Income Based on Colombian Peso Equivalence	Income Tax Rate Rendered with Colombian Pesos
Up to 1,090 UVT	Zero	Up to COL$38,811,630	Zero
More than 1,090 UVT and up to 1,700 UVT	19%	More than COL$38,811,630 and up to COL$60,531,900	19%
More than 1,700 UVT and up to 4,100 UVT	116 UVT, plus 28% on the amount in excess of 1,700 UVT	More than COL$60,531,900 and up to COL$145,988,700	COL$4,130,412, plus 28% on the amount in excess of COL$60,531,900
More than 4,100 UVT and up to 8,670 UVT	788 UVT, plus 33% on the amount in excess of 4,100 UVT	More than COL$145,988,700 and up to COL$308,712,690	COL$28,058,316, plus 33% on the amount in excess of COL$145,988,700
More than 8,670 UVT and up to 18,970 UVT	2,296 UVT, plus 35% on the amount in excess of 8,670 UVT	More than COL$308,712,690 and up to COL$675,464,790	COL$81,753,672, plus 35% on the amount in excess of COL$308,712,690
More than 18,970 UVT and up to 31,000 UVT	5,901 UVT, plus 37% on the amount in excess of 18,970 UVT	More than COL$675,464,790 and up to COL$1,103,817,000	COL$210,116,907, plus 37% on the amount in excess of COL$675,464,790
More than 31,000 UVT	10,352 UVT, plus 39% on the amount in excess of 31,000 UVT	More than COL$1,103,817,000	COL$368,603,664, plus 39% on the amount in excess of COL$1,103,817,000

Colombia’s general flat income tax rate for employment income paid to nonresidents is 35%.

Effective since Jan. 1, 2017, the National Alternative Minimum Tax (Impuesto Mínimo Alternativo Nacional, abbreviated as IMAN) and the Alternative Simplified Minimum Tax (Impuesto Mínimo Alternativo Simple, abbreviated as IMAS) no longer are in effect. Colombia has adopted a schedular system of taxes designed to determine tax liability based on the type of revenue. The categories of revenue include, earned income, pensions, capital gains, non-labor income or unearned income, and dividends, shares and participating interests. The calculation of income tax payable is computed by separating the income received under each revenue category and aggregating the tax payable for each source of income.

Registration: Prior to the start of economic activity, employers must register with the Unified Tax Registry (Registro Único Tributario, abbreviated as RUT) which is used to identify and classify taxpayers. Once a company is registered, they must register with the National Tax and Customs Directorate (Dirección de Impuestos y Aduanas Nacionales, abbreviated as DIAN) within two days to receive a Tax Identification Number (número de identificación tributaria, abbreviated as NIT). Employers must file a certificate of initiation with DIAN upon hiring new employees and must present employees with a copy. Individuals also must register with DIAN and receive an NIT.

Taxable Amounts: Taxable income includes salaries, commissions, benefits, allowances, expenses, fees, church fees, and compensation for personal services.

Taxable amounts do not include mandatory and voluntary pension contributions, deposits to savings accounts dedicated to the purchase of housing, certain charitable contributions, or severance pay. Health insurance contributions also can be deducted.

Withholding Methods: Employers are required to withhold income taxes according to the corresponding income tax rates from employees’ paychecks at the time of payment.

Returns and Remittance: Employers must submit returns monthly using Form 350, Statement of Withholding at the Source (Declaración de Retención en la Fuente). Employers also are required to remit taxes each month. Due dates vary and are set for each month based on the last digit of employers’ NIT numbers.

The due dates for months in 2021 are indicated in Decree Number 1680 of 2020. The due dates for months in 2020 were indicated in Decree Number 2345 of 2019, which was modified by Decree Number 401 of 2020.

Payments must be made at authorized banks.

Effective by Dec. 1, 2021, all employers must file wage statements reporting payments made and income and social taxes withheld electronically with the country’s National Tax and Customs Directorate (Dirección de Impuestos y Aduanas Nacionales, or DIAN). The statements must be filed by the 10th day of the month following the month reported. The requirement will be phased in according to an employer’s number of employees.

Employers may start submitting the payroll payment documents (Documento Soporte de Pago de Nomina Electrónica) electronically on May 31, 2021; the deadline to submit electronically is:

July 1, 2021, for employers with at least 251 employees;
Aug. 1, 2021, for employers with 101 to 250 employees;
Sept. 1, 2021, for employers with 11 to 100 employees;
Oct. 1, 2021, for employers with 4 to 10 employees;
Nov. 1, 2021 for employers with 2 to 3 employees; and
Dec. 1, 2021 for employers with 1 employee.

After these dates, new businesses have two months after first making payments to employees to register to file the statements and submit the first one.

Employers must provide every employee with a certificate of amounts withheld each year. The certificate is Form 220, Certificate of Income and Withholding for Work and Pension Income (Certificado de Ingresos y Retenciones por Rentas de Trabajo y de Pensiones).

Individual returns are due on different dates depending on the individual’s specific RUT number. The exact dates are determined and published by the DIAN each year.

Recordkeeping: Tax records generally must be kept for at least 10 years.

Penalties: Penalties for late filings, inconsistencies, information falsification, omission of information and other violations of the income tax law can range from 15 UVT to 20,000 UVT a day.

Employers that fail to register with the RUT before commencing business activities may be subject to the closure of their businesses for one day each month or a fine equivalent to one UVT a day. Employers that fail to update information entered in the RUT within the month the update occurs shall be subject to a fine up to the equivalent of two UVT for each day of delay.

Social Taxes

Social taxes in Colombia cover benefits for retirement, old age, disability, survivor’s benefits, workers’ compensation, and sickness. The Ministry of Health and Social Protection (Ministerio de Salud y Protección Social, abbreviated as MinSalud) provides general supervision for all funds that are funded by social taxes. Pensions are administered by Colpensiones, which more formally is known as the Colombian Pensions Administrator (Administradora Colombiana de Pensiones), and Pension Fund Administrators (Administradoras de Fondos de Pensiones, abbreviaed as AFPs), while health insurance is administered by health promoting organizations (Entidades Promotoras de Salud, abbreviated as EPS).

Colombia’s social security system often is referred to in the country as the Social Protection System (Sistema de la Protección Social, abbreviated as SPS) and as the Integrated Social Security System (Sistema de Seguridad Social Integral).

Social taxes are commonly referred to in Colombia as parafiscal contributions (aportes parafiscales), and their description as parafiscal has the connotation that they are assessed for a specified purpose. Colombia’s Pension and Parafiscal Management Unit (Unidad de Gestión Pensional y Parafiscales, abbreviated as UGPP) has a role in overseeing the assessment of social taxes in Colombia.

Coverage: All Colombian residents, defined for fiscal matters as being present in Colombia 183 days or more during a tax year or having a permanent residence in Colombia, are covered by the social security law. All employees entered into an employment contract are covered by the social security law. Self-employed individuals may also contribute to social taxes voluntarily.

The types of coverage that are funded through the payroll process in Colombia are those for pensions (pensiones), health (salud), occupational hazards (riesgos laborales), the National Training Service (Servicio Nacional de Aprendizaje, abbreviated as SENA), the Colombian Family Welfare Institute (Instituto Colombiano de Bienestar Familiar, abbreviated as ICBF), the Family Compensation Fund (Cajas de Compensación Familiar, abbreviated as CCF and often referred to simply as cajas de compensación), and the Pension Solidarity Fund (Fondo de Solidaridad Pensional, abbreviated as FSP).

Rates and Thresholds: Employers and employees in Colombia are jointly assessed some times of social taxes, but are not jointly assessed others. Employees who are compensated in accordance with the integral salary system have in some regards social taxation provisions that are different from those of employees in general. More details regarding qualifications for the integral salary system are available in the Minimum Wage section of this primer.

Contributions for pensions, health care, occupational hazards, SENA, ICBF, and the CCF are subject to a minimum and maximum contribution income base (ingreso base de cotización, abbreviated as IBC), and these respectively are the minimum and maximum monthly amount per employee upon which contributions for pensions and health care may be assessed on an employee and the employer.

In general, the monthly minimum contribution income base is equivalent to the monthly minimum wage and the monthly maximum contribution base is equivalent to 25 times the monthly minimum wage.

Effective for 2021, based on the monthly minimum wage in effect, the minimum contribution income base is COL$908,526 and the monthly maximum contribution base generally is COL$22,713,150. Effective for 2020, based on the monthly minimum wage in effect, the minimum contribution income base was COL$877,803 and the monthly maximum contribution base generally was COL$21,945,075.

The method for determining the monthly maximum contribution income base applicable to an employee compensated in accordance with the integral salary system differs from the general method. Employee and employer social tax assessments on payments to an employee compensated in accordance with the integral salary system are subject to a monthly maximum contribution income base that is 70% of the employee’s monthly income, or 25 times the monthly minimum wage, whichever is lower.

Pensions: The pension contributions rate for employers is 12% and the pension contributions rate for employees is 4%.

Health care: The health care contributions rate for employers is 8.5% and the health care contributions rate for employees is 4%. If an employee is paid less than 10 times the minimum monthly wage during a month, the employee’s employer is exempt from being assessed the health care contributions rate of 8.5% on the wages paid to the employee during that month.

Occupational hazards: Employers, but not employees, are required to pay contributions to fund replacement compensation programs for employees who in the course of employment become injured or ill. An employer’s occupational hazards contribution rate is based on the risk class of its industry sector and the employer’s experience record regarding risk, with lower rates assessed on employers with comparatively favorable risk experience records and higher rates assessed on employers with comparatively unfavorable risk experience records.

The occupational hazard contribution rates for employers in Colombia’s five risk classes are as follows:

Risk Class 1: new employer rate of 0.522%, experience-rated employer range of rates from 0.348% to 0.696%;
Risk Class 2: new employer rate of 1.044%, experience-rated employer range of rates from 0.435% to 1.653%;
Risk Class 3: new employer rate of 2.436%, experience-rated employer range of rates from 0.783% to 4.089%;
Risk Class 4: new employer rate of 4.35%, experience-rated employer range of rates from 1.74% to 6.96%; and
Risk Class 5: new employer rate of 6.96%, experience-rated employer range of rates from 3.219% to 8.7%.

SENA, ICBF, and CCF: Employers, but not employees, are subject to assessments to fund the National Training Service (SENA), the Colombian Family Welfare Institute (ICBF), and the Family Compensation Fund (CCF), but each month, they are subject to these assessments only on payments to employees who were paid at least 10 times the minimum monthly wage.

Effective for 2021, the monthly minimum wage in effect multiplied by 10 is COL$9,085,260. Effective for 2020, the monthly minimum wage in effect multiplied by 10 was COL$8,778,030.

An employer’s total contribution rate for the SENA, ICBF, and CCF is 9%, distributed as follows:

2% to the SENA;
3% to the ICBF; and
4% to the CCF.

Employers that hire new staff who are from 18 to 28 years of age and who are paid a monthly level of income that normally would cause contributions for the SENA, ICBF, and CCF to be applicable are exempt from CCF contributions, but not SENA and ICBF contributions, for such workers during their first year of employment.

Pension Solidarity Fund: Employees who during a month are paid at least four times the monthly minimum wage are assessed a contribution of at least 1% for the Pension Solidarity Fund, and the contribution rate may be up to 2%, with the assessable rate increasing as income increases. The Pension Solidarity Fund contribution rates for an employee earning the following amounts of income during a month are as follows:

at least four times but less than 16 times the monthly minimum wage: 1%;
at least 16 times but less than 17 times the monthly minimum wage: 1.2%;
at least 17 times but less than 18 times the monthly minimum wage: 1.4%;
at least 18 times but less than 19 times the monthly minimum wage: 1.6%;
at least 19 times but less than 20 times the monthly minimum wage: 1.8%; and
at least 20 times the monthly minimum wage: 2%.

Employers are not subject to Pension Solidarity Fund contributions.

Registration: Employers must register all employees for social security, and all self-employed individuals making at least minimum wage need to register for social security. Employers must also register with an information operator to take part in the Integrated Form for Contribution Settlement (PILA) to be able to submit all social security payments at once. Official information operators for PILA can be found on the ColPensiones website and include the Bank of Colombia, Aportes en Linea, Asopagos S.A., and Mi Planilla.

Taxable Amounts: Amounts subject to social taxes comprise of salary and all benefits, including overtime work, bonuses, severance pay, allowances, and payments in kind.

Withholding: Employers are required to withhold employee social security contributions from paychecks at the time of each payment.

Returns and Remittance: Employers must use PILA, the Integrated Form for Contribution Settlement, to submit all returns and remittances for social contributions. Returns and remittances must be made monthly. The exact day of the month that payments and returns are due depends on the number of employees an employer has and the NIT. Payments can be made online on the PILA website.

Effective Dec. 1, 2021, all employers must file electronically wage statements reporting payments made and income and social taxes withheld with the country’s National Tax and Customs Directorate (Dirección de Impuestos y Aduanas Nacionales, or DIAN). The statements must be filed by the 10th day of the month following the month reported. The requirement will be phased in according to an employer’s number of employees.

Recordkeeping: Tax records generally must be kept for at least 10 years.

Penalties: Fines for violating the Social Security Law can vary between the amount of the monthly minimum wage and 50 times the amount of the monthly minimum wage.

Other Taxes

Colombia’s national government does not assess any taxes on employment income other than those covered in the Income Taxes and Social Taxes sections of this primer.

State/Jurisdiction Taxes

Taxes on employment income are not assessed by any of Colombia’s departments or local jurisdictions.

COMPENSATION AND BENEFITS

The Labor Code in Colombia regulates labor issues in regards to minimum wage, overtime, hours of work, holidays, leave, wage payment, and termination pay. Workers’ compensation and retirement plans are covered under social taxes.

The Ministry of Labor generally administers labor issues in Colombia.

Coronavirus (Covid-19) Guidance: Employers may apply for a wage-subsidy program, the Formal Employment Support Program (Programa de Apoyo al Empleo Formal, abbreviated as PAEF), which is to provide a subsidy of 40% of the monthly minimum wage per employee per month from May 2020 to Dec. 2021. Female employees and all employees in certain sectors, including tourism, hotels and restaurants, arts and entertainment, and recreation instead receive a subsidy of 50% of the monthly minimum wage per month. To apply, employers must have been established before Jan. 1, 2020, and must have suffered a decrease in income of at least 20% because of the new coronavirus pandemic.

While Colombia’s officially-declared public health emergency is in effect, employers and employees may agree to spread the normal 48-hour work week over four days instead of six, with a maximum of 12 hours per day. Employers may also agree with employees to organize continuous shifts, as long as these employees do not work more than eight hours in a shift or 36 hours per week. Surcharges for night, Sunday, and holiday work must still be paid if applicable, but employers and employees may agree to postpone payment of the surcharges to Dec. 20, 2020, at the latest.

Employers and employees may agree to postpone the first prima for 2020, due June 30, to Dec. 20, 2020, at the latest, made either in one payment or in up to three equal installments. Employers may apply for a program that provides subsidies for both primas paid in 2020, the Prima Payment Support Program (Programa de Apoyo a para el Pago de la Prima de Servicios, abbreviated as PAP). The program applies to employees who earn up to COL$1 million per month, and provides COL$220,000 per eligible employee reported on the PILA social tax returns for April to June 2020 for the first prima, or for October and November 2020 for the second prima. Employers must apply through their financial institution, must have been established before Jan. 1, 2020, and must have suffered a decrease in income of at least 20% because of the new coronavirus pandemic.

Effective from June 3, 2020, to the end of Colombia’s officially-declared public health emergency, the monthly public transportation assistance was renamed the connectivity assistance (auxilio de conectividad), but remains the same amount, and must be paid to employees who normally would receive public transportation assistance but are temporarily working from home.

The Ministry of Labor is recommending private sector employers promote the vaccination of its workers. Employers must give their workers permission to get vaccinated during working hours.

Minimum Wage

Effective for 2021, the monthly minimum wage in Colombia is COL$908,526. Effective for 2020, the monthly minimum wage in Colombia is COL$877,803.

For civil servants and private sector employees earning up to twice the minimum wage, a monthly transportation assistance (auxilio de transporte) amount is required to be paid. Public transportation assistance is required to be paid by all employers in areas where public transportation is available.

Effective for 2021, the monthly transportation assistance amount is COL$106,454. Effective for 2020, the monthly transportation assistance amount was COL$102,854.

In Colombia, the term minimum salary (salario mínimo) is equivalent to the term minimum wage, and the term minimum salary is used more often than the term minimum wage. Colombia often refers to its minimum wage with the acronym SMMLV, which stands for salario mínimo legal vigente, a phrase with the English translation of current legal minimum wage.

Employees may enter into agreements with their employers to be compensated in accordance with the integral salary system (régimen de salario integral), also known as the all-inclusive salary system. Under the integral salary system, an employee’s monthly compensation must be at least 13 times the monthly minimum wage, with this amount including base compensation of at least 10 times the monthly minimum wage plus 30% of the base compensation provided as a benefit factor. The benefit factor is an advance payment in lieu of benefits in general, overtime premiums, shift premiums, and severance pay, but the benefit factor cannot include advance amounts of annual leave pay.

Effective for 2021, the minimum monthly amount that an employee could be compensated for the employee to be paid in accordance with the integral salary system is the monthly minimum wage multiplied by 13, which is COL$11,810,838. Effective for 2020, the minimum monthly amount that an employee could be compensated for the employee to be paid in accordance with the integral salary system is the monthly minimum wage multiplied by 13, which was COL$11,411,439.

Minimum wage subsidy: Employers may apply to the Ministry of Finance’s Pension and Parafiscal Unit for a subsidy of 25% of the monthly minimum wage, or COL$227,131 in 2021, for each new employee age 18 to 28 hired after March 2021, provided the hiring increases the employer’s number of employees compared to March 2021. For new employees that are not age 18 to 28 and that earn up to three times the monthly minimum wage, the employer may apply for a subsidy of 10% of the monthly minimum wage, or 15% for women. The first application period was Aug. 12 to 19, 2021, based on July 2021 payroll data, and employers may apply for subsequent months during a portion of the following month. The subsidy may be granted for up to 12 months until August 2023, but an employer must have applied for and received at least one payment by September 2022 to continue applying after September 2022.

Overtime

Overtime generally is required for work more than eight hours in one day or 48 hours in a week. Overtime work is not to exceed two hours in a day or 12 hours in a week. Overtime work during the day is remunerated at a rate of 25% above normal pay, and overtime work done at night is remunerated at a rate of 75% above normal pay. Work done on Sundays or holidays is remunerated at a rate of 75% above normal pay.

Overtime premiums do not need to be provided to employees whose work is governed by a flexible work plan and who fulfill the conditions of the plan. Under a flexible work plan, an employee and employer can agree that the employee may work variable hours each week and work for up to six days each week, with a required day of rest during the week. Employees working under a flexible work plan must, on each of their days of work during a week, perform at least four hours of work but no more than 10 hours of work for daily overtime premiums to be inapplicable. The average number of hours an employee works per week under a flexible work plan must be no more than 48 for weekly overtime premiums to be inapplicable. The avoidance of overtime hours under a flexible work plan may be accomplished only if employees covered by the plan do not work during night work hours from 9 p.m. to 6 a.m.

Hours of Work

The normal working day in Colombia is eight hours per day and 48 hours a week. Night work, which is defined as work done between 9 p.m. and 6 a.m., is remunerated at a rate of 35% above normal pay. The normal day of rest is Sunday, which is paid at a rate of 75% above normal pay.

Law No. 2101 of 2021, which took effect July 15, 2021, gradually reduces the working week to a maximum of 42 hours per week over five or six days, with a general maximum of nine hours per day, by 2026. The reduction is from 48 to 47 hours in 2023; from 47 to 46 hours in 2024; from 46 to 44 hours in 2025; and from 44 to 42 hours in 2026.

Additionally, Law No. 2101 of 2021 limits minors age 15 to 16 to working time of six hours per day and 30 hours per week, with work prohibited after 6 p.m, and limits minors at least age 17 to working time of eight hours per day and 40 hours per week, with work prohibited after 8 p.m.

Holidays

Employers must provide paid leave to employees on the following public holidays:

Jan. 1: New Year’s Day
Jan. 6: Epiphany*
March 19: St. Joseph’s Day*
Holy Thursday
Good Friday
May 1: Labor Day
The Ascension of Christ*
Corpus Christi*
The Sacred Heart of Jesus*
June 29: Saint Peter and Saint Paul*
July 20: Independence Day
Aug. 7: Battle of Boyaca
Aug. 15: The Assumption of Mary*
Oct. 12: Day of the Race/ Columbus Day*
Nov. 1: All Saints’ Day*
Nov. 11: Cartagena Independence Day*
Dec. 8: The Immaculate Conception
Dec. 25: Christmas Day

If holidays marked with an asterisk do not fall on a Monday, then they are celebrated on the following Monday. Holidays without specific dates listed are celebrated according to the Roman Catholic liturgical calendar and fall on different dates of the Gregorian calendar each year.

Leave

Employers must give employees paid annual leave after one year of service. After a year of service, employees may take 15 days of paid leave annually. Employees may request monetary compensation in lieu of annual leave, as long as the compensation does not exceed 50% of the leave period.

Maternity Leave: Social security pays for 18 weeks (using 48-hour work week) of leave if the female employee has contributed to the social security system.

Paternity Leave: Employers must give new fathers eight days of leave with full pay after the birth of a child, which is paid for by social security. To qualify for paternity leave, the employee must have contributed to the social security system for at least 100 weeks prior to taking the leave.

Bereavement Leave: Employers must give employees 5 days of leave upon the death of any of the following family members: a spouse or permanent partner, a parent, a child, a sibling, a grandparent, a grandchild, a mother- or father-in-law, a son- or daughter-in-law, or a stepchild or a stepparent.

Personal Leave: Employers must give employees 5 days of leave to attend to serious personal matters.

Wage Payment

Employers must specify in the employment contract the amount of remuneration, its form and the schedule for payment.

Bonuses and Special Benefits

Colombian employers are required to pay a premium known as a prima to employees twice a year. The two prima payments together must equal one month of normal salary, with one half of the premium paid June 30 and the other half paid within the first 20 days of December.

Termination Pay

Employers must pay employees the following amounts upon the termination of an employment contract without just cause (for employees earning less than 10 times the minimum wage):

30 days of salary if an employee has worked less than one year;
and 30 days of salary plus 20 days of salary for each year worked if an employee has worked more than one year.
For employees earning more than 10 times the minimum wage, employers are required to pay the following upon termination without just cause:
20 days of salary if the employee has worked less than one year;
and 20 days of salary plus 15 days of salary for each year worked if an employee has worked more than one year.

If a fraction of a year is worked, termination pay will be paid proportionally.

To terminate an employee with just cause, there must be at least 15 days of notice given, but no additional compensation is required.

Pregnant women and/or their partners cannot be dismissed during the pregnancy period and up to four months thereafter without prior approval of the Ministry of Labor.

Separately, employers must make a contribution before Feb. 15 of each year known as severance assistance (auxilio de cesantía) to accounts in employees’ names at funds of employees’ choosing, which include private companies as well as the government’s National Savings Fund (Fondo Nacional del Ahorro). The amount of the contribution is one month of salary each year, or a prorated amount when an employee works for part of a year. Employers must also pay employees 12% interest on the amount saved as of Dec. 31 of each year by Jan. 31 of the following year. The employee must generally be paid the amount saved in their account upon termination of the employment contract.

Workers’ Compensation

Workers’ compensation is fully funded by the employer and covered under social taxes.

Recordkeeping

Colombia’s labor code requires employers to keep data that can be used to establish employees’ length of service and wages earned, but does not specify a length of time for which records must be kept.

FOREIGN WORKERS

Foreign workers are taxed on Colombian sourced income at a flat rate of 35%. Foreign workers generally are subject to the same social tax contributions and labor laws as Colombian nationals.

Visas: Although residents from the Andean Community of Nations (CAN) member countries, including Bolivia, Ecuador and Peru, do not need passports or visas to visit Colombia as tourists, all foreign nationals need a visa to work in Colombia.

For business visas, non-residents must apply for and obtain either an NE1, NE2, NE3 or NE4 business visa. For work visas, non-residents must apply for and obtain a temporary work visa (TP-4). The TP-4 visa is issued for up to three years. Holders of work visas must register at the Migratory Office within 15 days following arrival in Colombia and apply for a Foreign ID Card. Requirements and specifics for each visa can be found on the Colombian Consulate website.

A Working Holiday Visa Scheme is effective for countries that take part in the Pacific Alliance, including Chile, Mexico and Peru. Individuals from these countries who are between the ages of 18 and 30 are now able to receive work visas to live in Colombia for up to a year under the scheme.

Effective since Oct. 9, 2018, newly hired foreign national employees must be registered with the Ministry of Labor within 120 days of the establishment of their employment contract. Their registration data must be submitted to the ministry through the Single Registry of Foreign Workers in Colombia (Registro Único de Trabajadores Extranjeros en Colombia, abbreviated as RUTEC). Data regarding foreign workers whose employment contract was established on or before Oct. 9, the date the resolution was enacted, must be reported by Feb. 5, which is 120 days after the enactment date of the resolution that established the requirement to use the portal. Employers must provide data regarding foreign workers whose date of hire was Oct. 10 or later within 120 days of the date their employment contract was established. The registration is valid for the length of the employment contract, and any changes must be reported within 30 days.

Taxes: Nonresidents are taxed at a flat rate of 35%, which is deducted at source. Nonresidents working as teachers and who do not stay in Colombia for a period of time exceeding four months are subject to income tax at a flat rate of 7%.

Wages/Payments: Wages may be paid in foreign currency. Taxes must be paid in Colombian pesos; taxes owed will be converted into Colombia pesos based on the exchange rate on the last day of the taxable year or period.

WORKING IN THE UNITED STATES

Foreign workers from Colombia must meet general visa requirements and be certified to be employed in the United States. General visa requirements for the U.S. are included in the separate

U.S. employers also must check the names of all new-hires and employees against the Specially Designated Nationals and Blocked Persons List, administered by the Treasury Department’s Office of Foreign Assets Control (OFAC). Because OFAC prohibits financial transactions with individuals on the list, employers cannot employ them and may face fines for failing to comply.

For tax purposes, Colombian citizens are subject to U.S. employment-based taxation on income earned in the U.S. unless they work under specific visa types that exempt earnings from taxes.

State and local taxation of Colombian workers also can apply.

The U.S. labor laws apply to all workers employed and providing services in the country.

Work eligibility as an employee is contingent upon Department of Homeland Security and Labor Department approval and the employee receiving a U.S. Social Security number from the Social Security Administration.

Tax Residency In general, employees working in the U.S. on a temporary basis are considered nonresidents for tax purposes unless they qualify for resident status. Employees can be granted permanent resident status through the so-called green card test or if they meet the substantial presence test under the U.S. tax code. More information on these requirements is in the

Permanent residents are subject to U.S. tax requirements the same as U.S. citizens and are taxed under the U.S. system on their worldwide earnings.

Income TaxesGenerally, nonresidents in the U.S. who are from Colombia and are working in the U.S. are subject to U.S. taxes based on their U.S.-sourced income. Income is taxed differently based on whether it is categorized as wage income or nonwage income, which includes interest and dividends.

A Form W-4, Employee’s Withholding Certificate, must be filed by each employee with their employer. All nonresidents in the U.S. who are from Colombia and are working in the U.S. must claim “single” in Step 1c, regardless of marital status; write “Nonresident Alien” or “NRA” in the space under Step 4c of the form; and may not claim “exempt” in the space under Step 4c.

Nonresident alien employees may adjust withholding using Step 2b or 2c of the Form W-4; certain employees also may be able to use Steps 3, 4a, or 4b. More information about Form W-4 requirements for nonresident alien employees is available in the

Although the versions of Form W-4 issued in 2020 or later significantly differ from the versions issued in 2019 or earlier, nonresident employees that filed a valid version of Form W-4 from 2019 or earlier with their employer do not need to file another Form W-4 with the employer unless they need to implement a change for their withholding. On Forms W-4 issued in 2019 or earlier, nonresident alien employees were required to check the “single” box on line 3, regardless of marital status; write “Nonresident Alien” or “NRA” above the dotted line on line 6; and were not permitted to claim “exempt” on line 7 of the form.

An additional amount is added to a nonresident alien employee’s wages for calculating federal income tax withholding, with the amount based on pay period frequency and the date of the employee’s most recently filed Form W-4. The table of additional amounts applicable to Forms W-4 from 2020 or later and the table applicable to Forms W-4 issued before 2020 are available in the

Nonwage income and self-employed foreign workers can be subject to income tax withholding at a flat rate of 30%.

Additionally, foreign workers may be taxed differently based on the specific type of visa they hold.

Tax treaties: Colombia and the U.S. do not have a tax treaty.

Social Taxes: Most foreign workers are subject to paying into the U.S. Social Security system. Foreign nationals who are exempt from paying income tax and who do not have the eligibility to receive a social security number may not be required to pay social taxes. Foreign workers contributing to Social Security for a certain time period may be eligible to receive benefits.

Generally, foreign workers in the U.S. that have specific visas as exchange visitors or students or who are temporarily in the U.S. for agricultural work are not subject to social taxes on income that is obtained from the purpose in which they originally entered the U.S.

Totalization Agreements: Colombia and the U.S. have not entered into a social tax totalization agreement.

Wage Payment: Under certain visas for certain types of employment, employers are required to pay foreign workers the higher of either the prevailing wage or the actual wage that is paid to U.S. workers that have similar skills and qualifications.

There are no particular requirements that employees be paid in U.S. dollars.

TREATY ARRANGEMENTS

Colombia has entered into more than 10 income tax treaties, but has not entered into an income tax treaty with the United States. A multilateral income tax treaty, the Andean Community double taxation avoidance treaty, is in effect for Colombia and three other countries. Colombia also has more than 20 totalization agreements for social tax coverage purposes, but does not have an agreement with the United States.

Colombia’s tax treaties are available in

RESOURCES

All Resources are in English unless otherwise noted.

General

U.S. State Department: U.S. Relations With Colombia

CIA World Factbook: Colombia

Currency Details

International Organization for Standardization: Currency Codes - ISO 4217

Unicode Consortium: Currency Symbols

United Nations: United Nations Terminology Database: Colombia

Taxes

National Tax and Customs Directorate (Spanish):

Resolution No. 000111 of Dec. 11, 2020 (Spanish)

National Tax and Customs Directorate (Spanish):

Resolution No. 00013 of Feb. 11, 2021 (Spanish)

Tax Statute (Spanish)

Law No. 2010 of 2019 (Spanish)

Law No. 1819 of 2016 (Spanish)

Law No. 100 of 1993 (Spanish)

Ministry of Finance and Public Credit (Spanish)

Superintendent of Health (Spanish)

Superintendent of Finance (Spanish)

Colombian pension fund manager - Colpensiones (Spanish)

Compensation and Benefits

Ministry of Labor (Spanish):

Decrees No. 1785 and 1786 of Dec. 29, 2020 (Spanish)
Decree No. 688 of June 24, 2021 (Spanish)

Labor Code (Spanish)

Law No. 2155 of Sept. 14, 2021 (Spanish)

Law No. 2060 of Oct. 22, 2020 (Spanish)

Law No. 50 of Dec. 28, 1990 (Spanish)

Law No. 2101 of July 15, 2021 (Spanish)

National Savings Fund (Spanish)

Ministry of Finance: Pension and Parafiscal Unit (Spanish)

Ministry of Labor Circular No. 47 of Aug. 5, 2021 (Spanish)

Foreign Workers

Consulate of Colombia in Washington, DC

Pacific Alliance website

Colombia Labor Ministry Resolution 4386 (Spanish)

Working in the United States

U.S. Internal Revenue Service:

IRS Notice 1392, Supplemental Form W-4 Instructions for Nonresident Aliens
IRS Publication 15, Circular E, Employer’s Tax Guide
IRS Publication 515, Withholding of Tax on Nonresident Aliens and Foreign Entities
IRS Publication 519, U.S. Tax Guide for Aliens
IRS Publication 901, U.S. Tax Treaties

U.S. Labor Department, Foreign Labor Certification