Colombia Employee Compensation & Benefits
Capital
Bogota
Official Language
Spanish
Currency
Colombian Peso
Payroll cycle
Monthly, Bi-Weekly
Quick facts about Colombia
Straddling the border between Central and South America, Colombia is one of the most biodiverse countries in the world. From the country’s high altitude sprawling capital Bogotá to the Caribbean island San Andres, Colombia offers some of the best natural resources in the world. The country is known for its robust education system, which makes it an appealing place to build out a local employment hub.
In Colombia, there are a variety of compensation and minimum benefits that an employer needs to offer. Most employers include all of this information in their employment contracts.
Here’s a look at the mandatory benefits that Colombian employers must provide, as well as supplemental benefits they are encouraged to offer in order to recruit the best talent and keep up with global companies.
Mandatory compensation and benefits in Colombia
Social security benefits
Per the law, many benefits are paid by the Institute de Seguros Sociales. Employers normally pay around 30% of each employee’s base income directly to social security via payroll deductions. These taxes cover basic health insurance, maternity leave, work risk insurance, and other social benefits.
The amount that employers pay in taxes depends on the employee’s income bracket. If the employee makes more than 10 times the minimum wage in Colombia, the employer contributes around 10% of the employee’s base pay directly to social security.
In addition to paying for each employee’s social security, employers must also honor other benefits, such as guaranteeing paid time off for holidays and sick leave.
Paid/annual leave
In Colombia, employees receive 18 paid holidays each year, which is more than most countries.
Many of these bank holidays fall on Monday. These long weekends are called puentes and are usually reserved for travel and family time.
New Years Day
Saint Peter and Saint Paul
Epiphany (Three Kings Day)
Independence Day
Battle of Boyaca
Saint Joseph’s Day
Maundy Thursday
Assumption of Mary
Good Friday
The Day of the Race
Labor Day
All Saint’s Day
Ascension
Independence of Cartagena
Corpus Christi
Immaculate Conception
Sacred Heart
Christmas Day
On top of these mandatory paid holidays in Colombia, employers are required to provide 15 paid vacation days to employees per year.
Sick leave
If an employee is sick, they are entitled to ⅔ their salary for the first two days that they miss, paid directly by the employer. After the 3rd day and up to 180 days, they are still entitled to ⅔ of their salary, but this payment comes from the social security system.
When an employee is injured on the job, they are entitled to 100% of their salary.
Maternity/paternity leave
New mothers are entitled to a minimum of 14 weeks of maternity leave, covered by payroll taxes. Maternity leave can start up to 2 weeks before labor, and can go for 12 weeks after giving birth.
New fathers are entitled to 2 weeks of paid leave for both birth and adoption. Depending on the circumstances, this leave can be extended anywhere from 1 week to up to 5 weeks.
Bereavement leave
In the event of the death of a parent, in-law, grandparent, sibling, child, or spouse, employees are entitled to 5 days of bereavement leave.
13th-month pay
All employees earn a 13th-month pay, where they are paid for an extra month of salary each year. The employer must pay the first half of the 13th-month pay by the 15th of June and the second half by the 20th of December.
Pension
Employees have access to a pension. Both employees and employers contribute to pension funds via payroll taxes.
Voting leave
Employees are allowed ½ day of paid time off to vote in state and government elections. For jury duty, employees are entitled to a full day of paid time off.
Marriage leave
Upon marriage, employees can take up to 5 days of paid leave for their wedding.
Transportation
If an employee makes less than 2 times the monthly minimum wage, they are entitled to transportation pay for buses. They are also entitled to a new uniform every 4 months.
Trade union leave
Those working in specialized trades like mining and oil are entitled to specialized pay to perform certain activities that are related to their field.
Short/long-term disability
Employees that qualify for short-term disability are entitled to collect ⅔ of their salary for 90 days, plus 50% of their salary for an additional 90 days. Short-term disability is recommended by a licensed practitioner of the employees choosing and can be extended for up to 180 days.
For long-term disability, the pension amount depends on the age of the person applying for disability. If the employee is less than 20 they can only qualify for long-term disability if they’ve lost 50% or more of their labor capacity by a non-work related cause and had to have contributed 26 weeks of payments into disability in the year previous.
If the degree of disability is 50-60%, the individual is entitled to 45% of their basic monthly wage, plus 1.5% of their monthly salary for every 50 weeks of contribution.
If the degree of disability is greater than 65%, the individual is entitled to 54% of their basic monthly salary, plus 2% of their basic monthly wage for every 50 weeks of contribution.
Survivors benefits
For employees that qualify for survivors benefits, the survivor receives 45% of the employee’s monthly income and increases by 2% for every 50 additional weeks over 500 weeks. Employees are entitled to a max of 75% of the employees basic monthly wage.
Recommended benefits in Colombia
For companies looking to recruit top talent in Colombia, offering additional benefits that go beyond what is required by the law is encouraged, especially for highly skilled jobs in business, engineering, and marketing. For supplemental benefits, it’s important to carefully review your employment contract before starting a new role
Transportation allowance
Some companies offer travel allowances to pay for taxis, gas, parking, and publication transportation. If a company is based in a more rural area, they might provide a bus or shuttle service to employees.
Life insurance
Many companies pay for their employee’s voluntary life insurance. This protects an employee in the case of sudden death, disability or illness.
Supplemental health insurance
Many companies offer private health insurance in addition to mandatory social security benefits. Private health insurance in Colombia provides access to a wider network of doctors and better overall infrastructure. Private health care usually means shorter wait times, too.
Supplemental day-to-day benefits
Some employers opt to give their employees small bonuses to pay for meals, gas, and groceries. They usually give this benefit in the form of a debit card.
Supplemental pension
Employers can also boost their employees’ retirement benefits by paying into their pension beyond what is covered by payroll taxes. This option has tax credits that benefit both the employer and employee.
Educational support
For some specialized sectors of work, employers may opt to cover postgraduate costs of up to 50% for employees to receive a postgraduate degree. If a company pays for a masters or other postgraduate degree, employees are usually required to work with the company for a set period of time or pay back the costs of the postgraduate degree to their employer.
Partnering with Via for payroll and benefits in Colombia
When setting up a subsidiary or entity in Colombia, businesses must offer all of the compulsory benefits and set up payroll compliantly, or face steep fines. However, knowing what is legal and what isn’t can be tricky.
If you’re planning to go global and hire in Colombia, you’ll need to open a legal entity or subsidiary, or partner with a global PEO/EOR service like Via.
Companies of all sizes want to hire employees in Colombia, but don’t know how to navigate the country’s local labor laws. Via makes hiring Colombian talent and building your global team seamless. With our easy-to-use platform, Via helps you manage local HR processes for direct employment such as benefits, payroll, background checks, and more. Our team of local labor lawyers and on-the-ground experts ensure that your company remains compliant with employment laws while expanding abroad. As your employer-of-record/entity in Colombia, Via assumes responsibility for employment liability, so that you can focus on what matters: recruiting and managing your team.
With Via’s transparent pricing, you can pay full-time employees or contractors in Colombia and elsewhere across the globe with no hidden set-up fees, no foreign exchange or transaction fees, and no minimums–start with 1 employee and scale up at your own pace.
