# Hire in Colombia

Source: https://overseashire.com/hire/colombia · verified 2026-10-05 · confidence medium

Growing software, data and customer-support talent in Bogota, Medellin and Cali with strong Spanish and workable English, in a US-aligned time zone.

## Employer cost
Employer on-costs 38–52% of gross salary. Recomputed 5 Oct 2026 as % of base salary. Low (exemption under Art. 114-1 applies: income-tax-paying company, employee under 10 minimum wages): pension 12% + ARL class I 0.522% + Caja de Compensacion 4% = 16.52%; prestaciones: prima 8.33% + cesantias 8.33% + interest on cesantias 12% x 8.33% = 1.0% + vacation accrual 4.17% = 21.83%; total 38.35%, rounded to 38. High (no exemption): pension 12% + health 8.5% + ARL 0.522% + Caja 4% + SENA 2% + ICBF 3% = 30.02%, plus the same 21.83% = 51.85%, rounded to 52 (matches Deel's 51.85%). Employer share of pension+health = 20.5% of the 28.5% combined rate (PwC). ARL up to 6.96% for high-risk work and the transport allowance (COP 249,095) for staff under 2 minimum wages add more. Salaries of 10+ minimum wages lose the exemption. Derived estimate, not a published figure.

| Contribution | Rate | Notes |
|---|---|---|
| Pension (employer share) | 12% | Total pension rate 16%, employee pays 4%; PwC: employer bears ~20.5% of the 28.5% combined pension/health/ARL rate |
| Health (EPS) employer share | 8.5% | Waived under Art. 114-1 for employees earning less than 10 minimum wages when the employer pays corporate income tax (secondary source) |
| ARL (occupational risk) | 0.522%-6.96% | Depends on risk class; Class I office work is 0.522% |
| Caja de Compensacion Familiar | 4% | Family compensation fund, always payable |
| SENA | 2% | Waived under Art. 114-1 for qualifying employees |
| ICBF | 3% | Waived under Art. 114-1 for qualifying employees |

Mandatory benefits: Prima de servicios: 1 month of pay per year, paid in two instalments; Cesantias: 1 month of pay per year deposited in a fund, plus 12% annual interest; Vacation: 15 working days; Transport allowance for employees earning up to 2 minimum wages (COP 249,095 in 2026, secondary source); Dotacion (work clothing) for lower earners, 3 times a year (not verified)

## Rules
- Payroll: Monthly or biweekly; social security filed monthly via PILA
- Probation: Maximum 2 months on indefinite contracts; proportional on fixed-term contracts (Deel).
- Notice and severance: Dismissal without just cause on an indefinite contract (CST art. 64): indemnity of 30 days' salary for the first year plus 20 days per additional year for salaries below 10 minimum wages; for salaries of 10+ minimum wages 20 days for the first year plus 15 days per additional year (statute as generally described; not fetched). Notification of collective redundancy (10+ workers within 30 days) required.
- Termination: Employers must pay all accrued prestaciones on exit. Dismissal with cause needs a documented process. Fixed-term contracts need notice of non-renewal (30 days, not verified). Law 2466 of 2025 (published 25 Jun 2025) limits fixed-term contracts to 4 years (then they convert to indefinite), makes the SENA apprenticeship a labour contract and raises the Sunday/holiday surcharge in steps (80% from Jul 2025, 90% from Jul 2026, 100% from Jul 2027).
- Working time: Standard weekly hours are being reduced in steps (Law 2101 of 2021; 44 hours from July 2025, 42 from July 2026) per general knowledge - not verified from a retrieved source. Overtime surcharges apply.
- Paid leave: 15 paid working days per year and 18 national public holidays (Deel).
- Minimum wage: COP 1,750,905 per month in 2026 (+23.7%), plus COP 249,095 transport allowance for staff earning up to 2 minimum wages (total COP 2,000,000); decrees 1469 and 1470 of 2025 per press reports (official decree text not fetched).

## Contractors
Deel rates misclassification risk as high: employees are entitled to back wages, social security arrears, fines and penalties if a contractor relationship shows subordination, fixed schedule or exclusivity.

## EOR
Direct hiring requires a Colombian entity or branch. Deel claims EOR onboarding in under 5 working days after documents, versus 16-28 weeks for own-entity incorporation and bank account (about COP 163 million in legal, notary and accounting fees per Deel).
Onboarding: EOR Under 5 working days once documents are ready (Deel claim); own entity 16-28 weeks (Deel claim).

## FAQ
**What is the total employer cost in Colombia?** Roughly 38%-52% on top of gross salary once prestaciones and social security are included; Deel states 30.5%-51.85%.

**What is Article 114-1 exoneration?** Companies paying corporate income tax are exempt from employer health, SENA and ICBF contributions for employees earning under 10 minimum wages.

**How much annual leave is required?** 15 paid working days per year, plus 18 public holidays.

**How long is probation?** Up to 2 months on an indefinite contract.

Unverified: Minimum wage decree text (SMMLV COP 1,750,905 and transport COP 249,095 consistent across press, decree not fetched); Weekly hours schedule (44h from Jul 2025, 42h from Jul 2026) from general knowledge; Solidarity fund threshold; Dotacion details; Fixed-term non-renewal notice; Indemnity formula for 10+ minimum-wage salaries (statute not fetched); Art. 114-1 exemption conditions confirmed via DIAN opinions in summary form only; Caja 4% and pension 12% not re-fetched from an official page; Employer-cost range is a derived estimate (arithmetic in note)

Sources:
- https://taxsummaries.pwc.com/colombia/corporate/other-taxes
- https://www.deel.com/blog/employer-of-record-colombia/
- https://topsourceworldwide.com/insights/hiring-in-colombia-prestaciones-sociales-contract-types/
- https://www.buk.co/blog/como-calcular-costo-empleado-colombia
- https://www.funcionpublica.gov.co/eva/gestornormativo/norma.php?i=260676
- https://normograma.dian.gov.co/dian/compilacion/docs/oficio_dian_20969_2019.htm

Not legal or tax advice.