Employment in Colombia is governed by the Substantive Labour Code (Código Sustantivo del Trabajo), recently amended by the 2025 labour reform (Law 2466). Employers must also pay mandatory social benefits such as the service bonus and severance fund. Here is what employers need to know about leave, pay, tax and ending employment.
Vacation is paid by the employer. Sick, maternity and paternity leave are paid by the employee’s health insurer (EPS), usually with the employer paying the employee and then claiming reimbursement.
Working days of paid vacation for each year of service, pro rata for shorter periods. Up to half can be paid out by agreement.
Fully paid, usually starting 1 to 2 weeks before the expected birth.
Fully paid by the EPS, taken after the birth. Parents can also share part of the leave through shared parental leave.
For illness not related to work, the employer pays the first 2 days. From day 3 the EPS pays two thirds of salary up to day 90 and half of salary from day 91 to 180, never less than the minimum wage. Work-related illness and accidents are paid in full by the occupational risk insurer (ARL).
Set up each Colombian leave type in IceHrm with its own accrual, carry forward and approval rules, including pro-rata vacation for new starters. Employees see their live balance before they apply, and managers see who is away on a shared calendar. Leave management →
The minimum wage is set each December for the following year. Law 2101 of 2021 has cut the maximum working week in stages, reaching 42 hours on 15 July 2026, with no reduction in pay.
From 1 January 2026. Employees earning up to 2 minimum wages also get a transport allowance of COP 249,095.
From 15 July 2026, spread over 5 or 6 days. Overtime is limited to 2 hours a day and 12 a week.
Night work runs from 7pm to 6am and carries a 35% surcharge even when it is not overtime.
Work on the weekly rest day or a public holiday carries a surcharge that is rising under the 2025 reform: 80% from 1 July 2025, 90% from 1 July 2026 and 100% from 1 July 2027.
Employees earning at least 13 minimum wages can agree an “integral salary” that includes these benefits, except vacation.
Capture attendance and overtime in IceHrm and feed the hours straight into payroll, so day, night, Sunday and holiday surcharges reflect what was actually worked. Time & attendance →
Tax brackets are set in UVT, a tax value unit updated every year by the tax authority (DIAN). Employers withhold tax monthly (retención en la fuente), and employees above certain income or wealth thresholds must also file an annual return.
| Annual taxable income (UVT) | Marginal rate | Tax |
|---|---|---|
| 0 – 1,090 | 0% | Nil |
| 1,090 – 1,700 | 19% | 19% of income over 1,090 UVT |
| 1,700 – 4,100 | 28% | 116 UVT plus 28% over 1,700 UVT |
| 4,100 – 8,670 | 33% | 788 UVT plus 33% over 4,100 UVT |
| 8,670 – 18,970 | 35% | 2,296 UVT plus 35% over 8,670 UVT |
| 18,970 – 31,000 | 37% | 5,901 UVT plus 37% over 18,970 UVT |
| Over 31,000 | 39% | 10,352 UVT plus 39% over 31,000 UVT |
Contributions are declared and paid monthly through the integrated contributions form (PILA). The base is at least 1 minimum wage and at most 25 minimum wages; for integral salaries it is 70% of pay.
| Contribution | Employer | Employee |
|---|---|---|
| Pension | 12% | 4% |
| Pension solidarity fund (over 4 minimum wages) | – | 1–2% |
| Health | 8.5% | 4% |
| Occupational risk (ARL) | 0.522–6.96% | – |
| Family compensation fund (Caja) | 4% | – |
| Family welfare institute (ICBF) | 3% | – |
| National training service (SENA) | 2% | – |
On top of these, budget for the social benefits in the pay section: the service bonus and cesantías each cost about 8.33% of annual pay, plus 1% for cesantías interest and about 4.17% for vacation.
Build Colombian pay the way you already structure it, with your own salary components, deductions and formula columns, such as prima, cesantías and transport allowance columns. Want to know how well IceHrm handles payroll calculations for Colombia? Contact us or see Payroll →
An employer can dismiss for one of the just causes listed in the Labour Code, after giving the employee the chance to be heard. Dismissal without just cause is allowed, but the employer must pay compensation. Pregnant employees, employees on maternity leave and employees with health-related protection need additional safeguards.
Employees resigning from an open-ended contract should give 30 days’ notice. For a fixed-term contract, either party must give 30 days’ written notice of non-renewal, or it renews automatically.
| Salary | First year | Each further year |
|---|---|---|
| Less than 10 minimum wages | 30 days | 20 days |
| 10 minimum wages or more | 20 days | 15 days |
Final settlement (liquidación) includes outstanding pay, the pro-rata service bonus, cesantías and interest, and unused vacation. Late payment can trigger a penalty of one day’s pay for each day of delay.
Colombia has 18 public holidays. Under the Emiliani Law, many religious and civic holidays move to the following Monday, creating long weekends.
Add each year’s Monday-shifted dates to a holiday calendar and assign it to a leave group, so every Colombian office gets the right days off automatically. Holiday calendars →
The open-ended contract is the default under the 2025 reform. Fixed-term contracts and contracts for a specific job are allowed for temporary needs, but must be in writing.
Probation must be agreed in writing and may not exceed 2 months; for fixed-term contracts under 1 year it is limited to one fifth of the term. Fixed-term contracts may last up to 4 years in total.
Send contracts for e-signing, store them on the employee’s record, and track onboarding with task lists so ARL, EPS and pension enrolment are done before day one. Documents & e-signing →
This guide is general information to help you plan HR processes, not legal, tax or financial advice. Employment law and rates change regularly and awards, enterprise agreements and state rules may give employees more than the minimums shown here. Always confirm current requirements with the official sources or a qualified adviser.
Configure leave types, accrual rules and public holidays for Colombia, keep employee records and contracts in one place, and run payroll with your own salary components. Want to know how IceHrm handles payroll calculations for Colombia? Talk to us.
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