Managing payroll in Colombia is challenging, with multiple changes each year to payroll, labor law, and tax requirements. There are many options for businesses to expand into Colombia, with incorporation, branch offices, and simplified share company, as it can be easy to establish and begin operations.

The corporate tax rate is 33%, and the tax year follows the calendar year from January 1 – December 31st. Foreign-owned companies are only taxed on Colombian-generated income, but tax reform has required private equity firms to be taxed on global income earnings. Deadlines to file taxes are set yearly and depend on the type of taxpayer and tax ID number, but deadlines usually fall between April and May.

Payroll and Labor Considerations

  • Employment contracts can be in writing or oral, but must include basic information such as place of work, nature of employment, dates, and salary
  • The minimum wage is COP 877,803 per month
  • Overtime cannot exceed 2 hours per day and 12 hours per week. Overtime is paid at 125% of the regular daytime hours and 175% for nighttime hours
  • Employees are entitled to severance pay if the termination was unilateral and without cause. The amount of severance varies depending on years of service and salary
  • Tax rates are progressive and range from 0-30% depending on annual taxable income

HR and Statutory Requirements

  • After completion of 12 months of continuous service employees are granted 15 consecutive days of paid leave
  • Sick leave is granted for up to 180 days in the case of a non-occupational injury or disease
  • Female employees are entitled to 18 weeks of maternity with full pay, with at least 1 week prior to the birth. Leave is paid fully through Colombia’s social security system
  • Fathers receive 8 days of paid paternity leave. They must present a birth certificate to be approved
  • The retirement age is 62 for men and 57 for women. Employees must contribute for 1300 weeks and the pension is 55-65% of the basic monthly wage, plus 1.5% for each 50-week period of contributions about the 1300 weeks

Holidays in Colombia

  • January 1 – New Year’s Day
  • January 6 – Epiphany
  • January 10 – Day off for Epiphany
  • March 19 – Saint Joseph’s Day
  • March 21 – Day off for Saint Joseph’s Day
  • April 14 – Maundy Thursday
  • April 15 – Good Friday
  • May 1 – Labor Day / May Day
  • May 30 – Ascension Day
  • June 20 – Corpus Christi
  • June 27 – Sacred Heart
  • June 29 – Feast of Saint Peter and Saint Paul
  • July 4 – Day off for Feast of Saint Peter and Saint Paul
  • July 20 – Independence Day
  • August 7 – Battle of Boyacá Day
  • August 15 – Assumption of Mary
  • October 12 – Columbus Day
  • October 17 – Day off for Columbus Day
  • November 1 – All Saints’ Day
  • November 7 – Day off for All Saints’ Day
  • November 11 – Independence of Cartagena
  • November 14 – Day off for Independence of Cartagena
  • December 8 – Feast of the Immaculate Conception
  • December 25 – Christmas Day

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