Integral Payroll

[Emelia Lute]

Thesecond-most populous country in South America, Colombia is the only country on the continent with beaches on both the Caribbean Sea and the Atlantic Ocean. Colombia is well known for its coffee and its vibrant arts scene. With many public holidays (the second-most in the world, behind only India), plentiful natural resources, and a large population, Colombia is home to expert workers in a variety of important fields.

Looking to employ workers in Colombia? Companies hiring in Colombia must either own a legal entity in the country or work with a global employment solutions provider, usually one that provides employer of record services.

Remote can employ your team in Colombia on your behalf through our local legal entity in the country and handle payroll, benefits, taxes, and compliance for your Colombia team. You can also pay contractors now in Colombia with Remote.

Employment contracts are required for both fixed-term employment and permanent employment agreements. Remote recommends employment contracts for every hire, and every contract must adhere to Colombian employment and labour laws. Usually, fixed-term contracts in Colombia cannot be for more than three years, though there is a provision to extend them to a later date. The contracts are usually drafted in Spanish.

Our team ensures your employees are onboarded and paid as quickly as possible while keeping your business compliant with all local employment legislation. The minimum onboarding time begins after the employee submits all required information onto the Remote platform. The onboarding timeline is also dependent upon registration with local authorities.

For all non-nationals of the country of employment, the Right to Work assessment (if applicable) will add three extra days to the total time to onboard. There may be extra time required if we need to follow-up on the right to work assessment.

Colombia is bordered by Panama in the northwest, Venezuela and Brazil to the east and Peru and Ecuador to the south. It hosts a coastline to the north with the Caribbean Sea and to the west with the Pacific Ocean. Colombia has a total land mass of over 1.1 million square kilometers.

Geography has been an important factor as Colombia sits at the crossroads of Central and South America, bringing together Native American, Spanish influences and other European influences. Colombians are proud of their diverse culture, both traditional and modern elements.

Employment in Colombia is governed primarily by the Colombian Labor Code (CST) of 1950 and its subsequent modifications. It regulates the terms and conditions of employment, such as the form and duration of employment contracts, probationary periods, salaries, working hours, holiday time, termination of employment and collective bargaining.

Employment contracts can be either verbal or in writing. There are no statutory requirements for writing up a contract. However, Spanish is recommended as Colombian authorities will require any employment document to be in Spanish or translated into Spanish.

With an Ordinary salary, the ordinary wage is calculated and paid separately from statutory benefits contributions. On top of that, the employer must provide the employee with certain legally defined fringe benefits:

The integral salary is where all statutory benefits and contributions are packaged into a fixed salary payment. This means that the integral salary includes fringe benefits and potential surcharges, such as overtime for evening hours, Sunday hours, public holiday hours, and extra-legal bonuses. In order for an employee to be eligible for an Integral salary, the employee must be paid at least the Integral monthly minimum wage or more, which in 2024 is COP 16,900,000 (10 monthly legal minimum salary + 30% surcharge). The minimum wage in Colombia in 2024 equals COP 1,300,000.

Fixed-term contracts are required to be in writing in order to be deemed valid. The labor code establishes that the fixed-term contract length is free for the parties to determine. However, it cannot exceed three years. Additionally, there are no limitations on the possibility of successive fixed-term contracts or renewals.

However, when a fixed-term contract is agreed upon for an initial period of less than one year, the law establishes a limitation of three successive renewals of the initial contract. Following this, the period of the contract will be considered indefinite.

Employees hired under a fixed-term employment agreement can be subject to a probationary period of up to one-fifth the time of the fixed term agreed upon. This may not exceed two months. When considering the existence of successive fixed-term contracts, the parties cannot agree to trial periods except for in the first contract.

Both the employer and the employee are free to agree to the working hours without exceeding the legal limit of hours per week. The ordinary working time cannot exceed eight hours per day and 47 hours per week. Employees are entitled to a mandatory rest day, typically on Sunday. However, the law allows for the parties to agree that the daily working time can be distributed between four and 10 hours per day, ensuring the maximum working week.

An employee must not be required to work more than two hours of overtime in a day. In a given week, overtime cannot amount to more than 12 hours. Overtime during the day (6 a.m. to 9 p.m.) is paid at a rate of 25% on top of the ordinary hourly rate. Overtime for night work (9 p.m. to 6 a.m.) is paid at a rate of 75% on top of the ordinary hourly rate.

Post termination non-competes, customer non-solicits and employee non-solicits are not enforceable in Colombia. However, such provisions are typically drafted in employment agreements because they can have a deterrent effect or instill a sense of moral obligation on the part of the employee.

Tax reform incorporated the tax unit (Unidad de Valor Tributario or TVU) to measure the different limits and thresholds originally set in absolute numbers. This is adjusted every year by decree. The value of each tax unit is equivalent to COP 38,004 for 2022 fiscal year and COP 42,412 for the 2023 fiscal year.

The basis to calculate contributions to the social security system (pensions, solidarity pension fund, health and professional risks) is the ordinary monthly salary earned by the employee. However, if the monthly salary exceeds 25 times the minimum wage (COP 1,160,000 in 2023), contributions to the social security system will be calculated on the maximum basis of 25 times the minimum wage.

The minimum holiday entitlement is 15 days each year. This accrues on a basis of 1.25 days per month from the commencement of employment. Employees are required to take at least six annual leave days each year.

Upon agreement, holiday days may be accumulated for a period of two years. The employer and the employee can agree on a monetary compensation calculation for the vacation period. This must not not exceed 50% of the holiday.

Compassionate Leave: While Colombian labor law requires employers to provide employees with a paid compassionate leave, it does not define the scope or length. Employers are recommended to analyze compassionate leave on a case-by-case basis.

Paid maternity leave of 18 weeks is granted to every employed pregnant or adoptive mother in Colombia. At least one week of leave must be taken before the delivery, which is extendable to two weeks when medically necessary. Adoptive mothers, (and fathers in charge of the newborn in case of the sickness or the death of the mother) are also entitled to this maternity leave. An additional two weeks are added for multiple births.

Employees are entitled to be absent from work on the public holidays defined by the law. They are entitled to their regular remuneration on these days. While it is common for municipalities to create other public holidays related to local festivities, private employers are not bound to such holidays. If, under any circumstance, the employer requires an employee to work on a public holiday, such work must be remunerated as if the employee worked on a Sunday (or whatever their weekly rest day is).

Employers and employees make statutory contributions to the Colombian Social Security System, which covers employees against certain social risks. The Colombian system includes the subsystems of healthcare, pension, labor risks and family allowance. As the social security system is managed by different entities (including both private enterprises and public agencies), the employee has the right to choose the agency they want to affiliate with for healthcare and pension.

Initially a foreigner can remain in Colombia as a tourist for a period not exceeding 180 days, as long as the corresponding procedures for the work visa are carried out. Foreigners are not allowed to engage in any paid activities with a Colombia tourist visa.

The employer must act in accordance with Resolution 6045 issued in 2017 by the Ministry of Foreign Affairs of Colombia, for determining the correct type of visa or permit required for their foreign workers.

If the employee enters Colombia with dependents and has been granted a work visa, the dependents also have the right to apply for work visas in Beneficiary Quality. It is worth noting this type of visa does not allow family members to work. Only the visa holder (who has the employment contract) can perform a professional job.

Within 15 days of receiving the visa, the employee must visit the local immigration authorities (Migracin Colombia) to register their stay. For stays longer than three months, a Foreigners ID Card (Cedula de Extranjeria) will be issued upon registration.

With Deel, your business can easily hire employees in Colombia. No more worrying about local laws, complex tax systems, or managing international payroll. Deel takes care of everything in 150+ countries.

The average onboarding time frame in Colombia is 5 days with Deel.

The individual income tax ranges from 0% to 39%. Income tax is calculated according to progressive rates. Multiple additional factors may impact overall rates such as the household status and the number of children.

3a8082e126