Colombia Payroll & Employment Guide 2026

Colombia has a large, skilled workforce and shares time zones with North America, making it a popular hiring market for foreign companies. Its employment rules are changing fast. The Law 2466 labour reform took effect on 25 June 2025, making indefinite contracts the default. Night work has started at 19:00 since 25 December 2025. The minimum wage rose 23% to COP 1,750,905 a month on 1 January 2026. The Sunday and holiday premium rose to 90% on 1 July 2026, and the maximum working week fell to 42 hours on 15 July 2026. Employers should also budget for mandatory prima, cesantías and social security contributions.

Currency: Colombian Peso (COP)

Language: Spanish

Regulatory Authority: Ministry of Labour (MinTrabajo), DIAN, UGPP and the Superintendence of Industry and Commerce (SIC)

Last updated: October 2026

Minimum Wage

COP 1,750,905 a month from 1 January 2026, plus a COP 249,095 transport allowance for employees earning up to 2 minimum wages. A court challenge to the decree is still pending, but the figure remains in force.

Employment Contract

Indefinite contracts are the default under Law 2466 of 2025. Fixed-term and project (obra o labor) contracts must be in writing, and fixed-term contracts are capped at 4 years including renewals. Written, Spanish or bilingual contracts are standard practice.

Probation Period

Up to 2 months, and it must be agreed in writing. For fixed-term contracts under 1 year, probation cannot exceed one fifth of the term.

Employer Cost

About 38–40% on top of gross salary where the employer qualifies for the health, SENA and ICBF exemption (salaries under 10 minimum wages, low-risk roles). About 52% without the exemption or for higher salaries. Integral-salary hires cost less.

Paid Leave

15 working days of paid vacation per year of service. Maternity leave is 18 weeks and paternity leave 2 weeks. Colombia has 18 public holidays in 2026, and Law 2466 added several new paid leaves.

Working Hours

Maximum 42 hours a week from 15 July 2026. Daytime work runs from 06:00 to 19:00; work after 19:00 counts as night work. Overtime is limited to 2 hours a day and 12 hours a week.

Employer Contributions

Pension 12%, health 8.5%, family compensation fund 4%, SENA 2%, ICBF 3% and occupational risk insurance (ARL) from 0.522%. Health, SENA and ICBF are waived for qualifying employers on salaries under 10 minimum wages.

Income Tax

Withheld monthly on a progressive scale from 0% to 39%. No withholding applies on a monthly taxable base up to 95 UVT (about COP 4.98 million in 2026, with UVT at COP 52,374).

Overtime Premium

Daytime overtime +25% and night overtime +75%. Ordinary night work +35%. Sunday and holiday work +90% from 1 July 2026, rising to +100% from 1 July 2027. Premiums stack.

Notice & Severance

No statutory notice for dismissal. Dismissal without just cause on an indefinite contract pays 30 days' salary for year 1 plus 20 days per extra year (salaries under 10 minimum wages). Fixed-term non-renewal needs 30 days' written notice.

Final Settlement

All wages and benefits, including prima, cesantías, interest and vacation, are due on the last day. Late payment costs one day's salary per day of delay for up to 24 months.

Prima & Cesantías

Prima: 30 days' salary a year, paid in halves by 30 June and 20 December. Cesantías: 1 month's salary a year, deposited in a fund by 14 February, plus 12% interest paid to the employee by 31 January.

2025–2026 updates

What changed in Colombia

  • 25 Jun 2025Labour reform (Law 2466) in force Indefinite contracts become the default and fixed-term contracts are capped at 4 years. Apprentices become employees, new paid leaves are added and disciplinary due process is mandatory.
  • 1 Jul 2025Sunday and holiday premium phased up The premium for Sunday and holiday work rose to 80%. It is rising in steps to 100% by July 2027.
  • 25 Dec 2025Night work starts at 19:00 Night hours now run from 19:00 to 06:00, instead of from 21:00. Work in these hours carries a 35% premium.
  • 1 Jan 2026Minimum wage up 23% The minimum wage rose to COP 1,750,905 a month and the transport allowance to COP 249,095. The tax unit (UVT) is COP 52,374 for 2026.
  • 12 Feb 2026Minimum wage decree challenged The Council of State suspended the decree, and a replacement decree kept the same figure. The suspension was lifted in July 2026, but a final ruling is still pending.
  • 1 Jul 2026Sunday and holiday premium at 90% Sunday and holiday work now pays 90% on top of the ordinary rate. It rises to 100% on 1 July 2027.
  • 15 Jul 202642-hour working week The final step of Law 2101 of 2021 cut the maximum ordinary week from 44 to 42 hours.

Hiring Guide

Contracts and onboarding

Use a written contract for every hire. Indefinite contracts are now the default, while fixed-term and project contracts must be in writing and fixed-term contracts are capped at 4 years. Agree any probation in writing, up to 2 months. Contracts are usually in Spanish or bilingual. Avoid treating long-term, supervised workers as independent contractors, as the reform presumes indefinite employment. Senior hires earning at least 13 minimum wages (COP 22,761,765 a month) can be placed on an integral salary.

Payroll and filings

Pay salaries monthly or bi-weekly and pay social security contributions each month through the PILA system. Report each payroll to DIAN through the electronic payroll document, and withhold income tax using the monthly UVT table. Plan for fixed annual deadlines: cesantías interest to employees by 31 January, the cesantías deposit by 14 February, and prima by 30 June and 20 December. Employees earning up to 2 minimum wages also receive a transport allowance and work clothing three times a year.

Working time and leave

The maximum ordinary week is 42 hours from 15 July 2026. Night work starts at 19:00, and Sunday and holiday work carries a 90% premium, rising to 100% in July 2027. Overtime is limited to 2 hours a day and 12 hours a week, and no longer needs Ministry approval. Employees get 15 working days of paid vacation a year, 18 weeks of maternity leave and 2 weeks of paternity leave. Colombia has 18 public holidays in 2026.

Exits and termination

Employers can dismiss without cause, but must pay a statutory indemnity. For indefinite contracts, this is 30 days’ salary for the first year and 20 days for each further year, or 20 and 15 days for salaries of 10 minimum wages or more. Dismissal for cause requires written charges, access to evidence and at least 5 days to respond. Pregnant, union-protected and health-protected employees need labour inspector approval. All final amounts are due on the last day.

Workplace and data compliance

Update internal work rules for Law 2466, including due process, digital disconnection and harassment prevention. Maintain an occupational health and safety system and a workplace harassment committee. Larger employers must meet the SENA apprentice quota, and apprentices are now paid employees. Employee data needs prior, express consent and a written data policy under Law 1581 of 2012. A pension reform has been approved but is not yet in force; contributions remain 12% employer and 4% employee.

Your 2026 compliance checklist

  1. Issue written contracts, defaulting to indefinite terms, and track fixed-term contracts against the 4-year cap.
  2. Budget about 38–52% on top of salary, and check whether the health, SENA and ICBF exemption applies.
  3. Set payroll to the 2026 minimum wage, transport allowance and UVT values.
  4. Plan shifts for the 42-hour week, the 19:00 night threshold and the 90% Sunday and holiday premium.
  5. Diary the prima, cesantías and cesantías interest deadlines.
  6. Update internal work rules for due process, digital disconnection and harassment prevention.
  7. Collect written consent for employee data and keep a data processing policy.
  8. Monitor the pending minimum wage ruling and the pension reform start date.

Download the full Colombia Payroll & Employment Guide 2026 (PDF)

For detailed hiring information, customised employment guidance or support with your Colombia hiring, please reach out to our team. We provide compliant employment contracts, payroll processing and tax remittance, social security registration and reporting, benefits administration, and onboarding and offboarding support. See our EOR pricing: flat from $349 per employee, per month.

FAQ

Colombia hiring: common questions

Yes. An Employer of Record such as StratEdge Global becomes the legal employer and handles contracts, payroll, PILA contributions, electronic payroll and compliance, while you direct the day-to-day work.

Roughly 38–52% of gross salary. The lower end applies where the employer qualifies for the health, SENA and ICBF exemption on salaries under 10 minimum wages in low-risk roles. Low earners also receive a transport allowance. Integral-salary hires cost less as a percentage.

Yes, but it must pay the statutory indemnity plus all accrued prima, cesantías, interest and vacation on the last day. Dismissal for cause requires due process, and protected employees, such as pregnant or union-protected staff, need labour inspector approval.

Not yet. The reform has been approved but is not yet in force, and no start date is confirmed. Pension contributions remain 16% of salary: 12% paid by the employer and 4% by the employee.