Colombia Employment Guide

Understanding Colombia's Minimum Wage Structure

Colombia's labor market operates with clearly defined compensation floors. The current monthly minimum wage stands at 1,300,000 Colombian pesos, translating to an annual minimum wage of 16,900,000 pesos for full-time employees.

Progressive Income Tax Framework

Colombia employs a progressive income tax system with rates ranging from 0% to 39%. The actual tax liability depends on multiple factors including marital status and number of dependents, making personalized tax planning essential for international employees.

Comprehensive Social Security Contributions

Employers must navigate a structured social security system based on employee classification. For standard salary employees, contributions are calculated on 100% of salary up to a 2024 cap of 32,500,000 pesos. Integrated salary employees have contributions based on 70% of salary with the same ceiling.

Consider the case of SailGlobal's manufacturing client who successfully optimized their Colombian workforce costs by properly classifying employees according to these guidelines.

Monthly Employer Contributions

• Pension Fund: 12% of base salary
• Labor Risk Insurance: 0.52%-6.96% (varies by occupational risk)
• Family Compensation Fund (CCF): 4%
• Health Insurance: 8.5%
• ICBF Family Welfare Institute: 3%
• SENA Training Fund: 2%
• SENA Legal Quota: 34,615 pesos monthly
• Remote Work Allowance: Approximately 32 USD equivalent

Annual and Semi-Annual Obligations

Employers must budget for significant additional costs throughout the year:

1. Legal Service Bonus (13th month salary): Equivalent to one month's pay, distributed equally in June and December
2. Severance Fund Contribution (14th month salary): One month's salary
3. Severance Fund Interest: 12% of the 14th month salary value

Conditional Benefits

Employees earning less than two minimum wages qualify for transportation allowance, currently set at 140,606 pesos, prorated based on actual days worked.

Overtime Regulations and Working Hours

Colombian labor law mandates overtime compensation for employees earning below 13,000,000 pesos monthly. The standard workweek comprises 40 hours across five days, with specific premium rates for additional hours:

• Weekday overtime: 25% premium
• Night, Sunday, and holiday work: 75% premium
• Sunday and holiday night shifts: 150% premium

Legal limits restrict overtime to two daily hours and 48 weekly hours maximum.

Progressive Reduction of Maximum Workweek

Under Law 2101 of 2021, Colombia is gradually reducing the maximum workweek from 48 to 42 hours by 2026. This phased approach ensures smooth transition for employers while maintaining employee benefits.

The reduction schedule progresses annually each July 15th:

• 2023: 48 to 47 hours
• 2024: 47 to 46 hours
• 2025: 46 to 44 hours
• 2026: 44 to 42 hours

Companies like SailGlobal help international businesses adapt their operations to these changing regulations without compromising productivity or compliance.