Colombia
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Introduction
General Overview & Economic Facts
- Colombia, officially known as the Republic of Colombia, is a country in South America
- It spans an area of 1,141,748 km2 (440,831 mi2) and has a population of approximately 50 million
- Colombia ranks 38th (2019) by nominal GDP and 31st by PPP (2019)
- Colombia’s diversified economy is the third-largest in South America, with macroeconomic stability and favorable long-term growth prospects
- It is a developing country that ranks 83rd on the HDI
Why Employ In Colombia?
- The main exports from Colombia are petroleum, coal, coffee, gold, bananas, cut flowers and fuel
- 16.38 % of the population is between the ages of 15 and 24 years, with 42.04% of the population being between the ages of 25 and 54. Colombia has a fairly youthful population, making it a favourable country to employ young, energetic employees
Overview Of The Labour Law
- There are numerous sources of labour law in Colombia including the following the Constitution, the Substantive Labor Code and the regulations and decisions issued by the Ministry of Labor, labor courts and the Constitutional Court
- The labour regulations establishes the core labour principles and obligations that apply to employment agreements, minimum wage, working hours, collective bargaining agreements, vacation and sick leave, and employment benefits
- Colombian labour law protects the rights of both employers and employees
Fun Country Facts
- Colombia is named after Christopher Columbus
- The National Anthem plays on the radio and television twice per day as required by law
- Colombia has a naturally occurring Rainbow River
Why Use Playroll Services For Colombia?
- Employing in Colombia requires companies to have their own legal entity in the country as well as to manage payroll, employee benefits, taxes and legal compliance. This can get quite complicated, especially with the complexity of employment laws in Colombia
- With Playroll’s Employer of Record services, your team will be employed by our established legal entities in each country
- We will take care of payroll, employee benefits, taxes, legal compliance and provide ongoing employee support, so that you can focus on growing your team
Employer Contributions
These are additional costs incurred by employers over and above the employee’s monthly gross salary and/or bonus.
Unemployment Insurance Fund
Unemployment Insurance
8.33% per annum
Unemployment Insurance Interest
1.00% per annum
Pension
Non-integral salary earners
Calculated on a maximum salary of COP 25,000,000.00 per month
12.00%
Integral salary earners
Calculated on the lower of COP 25,000,000.00 per month or 70% of integral salary
12.00%
Medical Plan
8.50%
Payroll Tax
Family Compensation Funds
Calculated on 70% of monthly salary for integral salary earners
4.00%
Family Welfare (ICBF)
Calculated on 70% of monthly salary for integral salary earners
3.00%
National Apprenticeship Service (SENA)
Calculated on 70% of monthly salary for integral salary earners
2.00%
Professional Risks (Aportes de Riesgos Profesionales)
Calculated on a maximum salary of COP 25,000,000.00 per month. Varies by industry
0.522 – 6.96%
Employee Contributions
These are costs incurred by employees that reduce their monthly gross salary and/or bonus to determine their net “take home” pay.
Pension Plan
4.00%
Medical
Calculated on a maximum salary of COP 25,000,000.00 per month
4.00%
Solidarity Pension Fund
For employees earning more than 4 times the minimum wage
1.00%
Employees earning between 16 and 17 times the minimum wage
1.20%
Employees earning between 17 and 18 times the minimum wage
1.40%
Employees earning between 18 and 19 times the minimum wage
1.60%
Employees earning between 19 and 20 times the minimum wage
1.80%
Employees earning between 20 and 25 times the minimum wage
2.00%
Income Tax
Income tax is calculated on worldwide income. Income Tax is calculated in terms of ‘tax units’ (Unidad de Valor Tributario or TVU). TVU for 2022 is COP 38,004.00
Income bracket per annum
0.00 – 1090.00
0.00%
1090.00 – 1700.00
(Taxable income or taxable occasional gain translated into TVU less TVU 1,090) x 19.00%
1700.00 – 4100.00
(Taxable income or taxable occasional gain translated into TVU less TVU 1,700) x 28.00% + TVU 116
4100.00 – 8670.00
(Taxable income or taxable occasional gain translated into TVU less TVU 4,100) x 33.00% + TVU 788
8670.00 – 18970.00
(Taxable income translated into TVU less TVU 8,670) x 35.00% + TVU 2,296
18970.00 – 31000.00
(Taxable income translated into TVU less TVU 18,970) x 37.00% + TVU 5,901
31000.00 or more
(Taxable income translated into TVU less TVU 31,000) x 39.00% + TVU 10,352
Employment Terms
General
Minimum Wage
- COP 1,000,000.00 per month
Working Hours
- Maximum of 8 hours per pay and 48 hours per week
- There is no statutory minimum meal interval
- The workday is between 06h00 and 21h00. It is common for workers to take a 2-hour rest break between 12h00 and 14h00
Overtime
- Maximum of 2 hours per day and 12 hours per week
Notice Period
- Fixed term contracts- 30 days prior to the expiration of the agreement
- Indefinite term contracts- 15 days
Severance Pay
Fixed term contracts-
The salary owed to the employee until the term of agreement expires
Indefinite term contracts-
- Employees earning up to 10 times the minimum monthly wage- 30 days salary plus 20 days of salary for each year of service
- Employees earning more than 10 times the minimum monthly wage- 20 days salary plus 15 days of salary for each year of service
Probation Period
- There is no statutory probation period
- It is common to have a probation period of a maximum of 2 months for indefinite term contracts and a maximum period of half the initial agreed term of the contract for fixed term contracts
Bonus
- Employees are entitled to a 13th salary bonus (La Prima) which is one full months’ salary
- Half the bonus is paid in June and the other half is paid in December
Public Holidays
Public holidays 2022
- January 1st – New Year’s Day
- January 10th – Epiphany
- March 21st – Saint Joseph’s Day
- April 14th – Maundy Thursday
- April 15th – Good Friday
- May 1st – Labour Day
- May 30th – Ascension Day
- June 20th – Corpus Christi
- June 27th – Sacred Heart
- July 4th – Feast of Saint Peter and Saint Paul
- July 20th – Independence Day
- August 7th – Battle of Boyaca Day
- August 15th – Assumption of Mary
- October 17th – Columbus Day
- November 7th – All Saints’ Day
- November 14th – Independence of Cartagena
- November 8th – Feast of Immaculate Conception
- December 25th – Christmas Day
Leave
Paid Leave / Vacation Days
- Paid leave
- Paid by employer
- Employed for less than 1 year- 0 days
- Employed for 1 or more years- 15 days
Sick Leave
- Paid leave
- Paid by employer and Social Security
- 180 days
Maternity Leave
- Paid leave
- Paid by Social Security
- Full time leave- 18 weeks
- Part time leave- 24 weeks
Paternity Leave
- Paid leave
- Paid by Social Security
- 2 weeks
Bereavement Leave
- Paid leave
- Paid by employer
- 5 days
Adoption Leave
- Paid leave
- Paid by Social Security
- Full time leave- 18 weeks
- Part time leave- 24 weeks
Voting and Jury Duty Leave
- Paid leave
- Paid by employer
- 0.5 days for voting, 1 day for jury duty
Military Service Leave
- An employee who is called up for military service’s employment contract is deemed suspended
- Employers are obliged to allow employees to resume the same job within 30 days of the military service being completed
- Service can last either one or two years, depending on the type of service