Employer of Record in Colombia

Employ in Colombia without an entity — 38-56% employer contributions, mandatory bonuses, severance accrual and payroll handled by local specialists.

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Why hire in Colombia through an EOR

Colombia’s employment costs are layered and substantial: 38-56% employer contributions including health, pension, severance and mandatory bonuses, plus prima de servicios (30 days’ salary paid twice yearly) and cesantías (severance accrual of one month per year plus 12% interest). Through an EOR, all of it is already running.

No entity required

Employ staff in Colombia, and 180+ other countries, without registering a Colombian company or limited liability company.

38-56% employer contributions

Pension 12%, ARL 0.522%, family fund 4%, severance 8.33%, interest 1%, vacation 4.17% — plus health 8.5%, SENA 2% and ICBF 3% for employees earning 10x the minimum wage or more. We calculate every layer correctly.

Prima de servicios and cesantías

The 30-day mandatory service bonus (paid June/December) and severance accrual (one month per year + 12% interest) are non-negotiable. We manage both on schedule.

Transport allowance

Employees earning up to 2x minimum wage receive a mandatory COP 249,095 transport subsidy on top of salary. Applies automatically.

Working in days, not months

We register the employment and set up payroll before day one — your hire can be working in Colombia in days, while a company setup would still be weeks away.

Hire in Colombia without setting up an entity

Colombia is one of Latin America’s most expensive hiring markets: a minimum wage of COP 1,750,905 plus a mandatory COP 249,095 transport allowance (total COP 2,000,000), employer contributions of 38-56% depending on earnings, plus non-negotiable obligations like prima de servicios (30 days’ salary paid twice yearly) and cesantías (severance accrual of one month per year plus 12% interest). The 2026 minimum wage jumped 23%, making this the largest increase in modern history.

An Employer of Record removes the complexity: TopSource employs your Colombian hires with all contributions calculated correctly, prima de servicios and cesantías managed on schedule, and transparent cost-to-company shown upfront. Hire without surprises.

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Calculate Your Employee Costs in Colombia

Enter a gross salary to see the full monthly cost of a hire in Colombia — all employer contributions, transport allowance, prima de servicios accrual and cesantías included in your total spend per employee.

Employment Cost Calculator

*Indicative figures only and not definitive legal advice. Local regulations change frequently. Consult an expert

Colombia

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	British Pound	Colombia
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How EOR in Colombia works: the process through TopSource

Step 1

Confirm the role, location and structure

We agree the position, salary and benefits with you, identify applicable contributions (based on earning level and industry), and outline the Colombian payroll structure.

Step 2

Issue a compliant contract

Your new hire receives a written employment contract in Spanish under Colombian Labour Law, with probation, notice, benefits and contribution details clearly set out.

Step 3

Register with DIAN and social security

We register the employment with Colombia’s tax authority (DIAN) and enroll in the social security system (PILA digital platform) before day one.

Step 4

Run payroll in COP

We calculate salary, transport allowance (if applicable), 38-56% employer contributions, prima de servicios accrual, cesantías accrual, 12% interest on cesantías, and income tax withholding each pay period.

Step 5

Support the relationship day to day

Your account manager and the employee both have a direct line for contract questions, mandatory benefits, cesantías schedules, prima de servicios payment coordination and anything else that comes up.

Know your Colombia hiring costs before you commit

Tell us the role and salary range — we’ll send back the full Colombian employment cost, 38-56% contributions, prima de servicios and cesantías included, within one business day.

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Employer Costs in Colombia at a Glance

38–56 %

Employer contributions (layered: health, pension, ARL, family, severance)

COP 2,000,000

Effective minimum wage with transport subsidy (2026)

30

Days statutory service bonus (prima de servicios), paid twice yearly

Employer Costs in Colombia Explained

Colombian employers contribute 38-56% on top of gross salary, broken down as follows: pension system 12%, occupational risk (ARL) 0.522%, family compensation fund 4%, severance accrual (cesantías) 8.33%, interest on severance 1%, vacation provision 4.17%, plus health insurance 8.5%, SENA 2% and ICBF 3% for employees earning 10 times the minimum wage or more — below that threshold the employer is exempt from those three under the exoneración de aportes. The minimum wage is COP 1,750,905, plus a mandatory COP 249,095 transport allowance, for a total of COP 2,000,000 from 2026. Standard working hours are 42 per week from July 2026. Here’s the breakdown.

Colombian employer contributions are split across multiple funds: pension system 12%, occupational risk insurance (ARL) 0.522%, family compensation fund (CCF) 4%, severance accrual (cesantías) 8.33%, interest on cesantías 1%, and vacation provision 4.17%. For employees earning below 10 minimum monthly legal wages (10 SMMLV or COP 17,509,050), the employer is exempt — under the exoneración de aportes — from health insurance 8.5%, SENA (vocational training) 2% and ICBF (national family fund) 3%. Once an employee earns 10 SMMLV or more, all three of those apply on top. This is why lower earners cost around 38%, while higher earners face the full 56% burden. The progression is non-linear, so budgeting requires clarity on the earning threshold.

Every Colombian employee is entitled to the prima de servicios, a government-mandated 30-day salary payment equal to one month of gross salary. It is paid in two instalments: one in June and one in December. This is not a discretionary bonus or performance-based; it is a statutory entitlement for every employee. The obligation begins from the first day of employment. For budgeting purposes, this is effectively a 13th and 14th month of salary across the calendar year.

Severance (cesantías) accrues from day one at a rate of one month’s salary per year of service. Employers must deposit accrued cesantías into a severance fund (fondo de cesantías) by February 14 each year. Additionally, 12% annual interest is paid on the accrued balance, with interest paid directly to the employee by January 31. This two-part obligation (principal + interest) adds material cost, especially for long-tenured employees. Non-payment or late payment triggers significant penalties.

Employees earning up to 2x the minimum wage (COP 3,501,810 in 2026) receive a mandatory monthly transport subsidy of COP 249,095, paid on top of salary. The 2026 minimum wage jumped 23% to COP 1,750,905, making it the largest increase in modern history. This affects all salary bands: even employees earning well above minimum wage feel wage-pressure as lower-paid staff jump upward. From 15 July 2026, the standard workweek also reduces from 44 hours to 42 hours with no reduction in pay, effectively increasing the hourly cost.

EOR or entity setup: which one fits your Colombia plan?

Registering a Colombian limited liability company (SAS or SpA) is fast but creates ongoing payroll administration, DIAN compliance, prima de servicios and cesantías management, and tax obligations that don’t disappear when plans change. An EOR makes sense while you’re testing the market or hiring a first small team; your own company usually makes sense once Colombian headcount and permanence are certain.

Consider an EOR if you’re:

Hiring your first one to five people in Colombia
Testing the Colombian market before committing to a company and payroll setup
Still navigating the 38-56% contribution structure and mandatory benefit obligations
Working to a hiring deadline measured in weeks, not months

Get a cost comparison

Colourful colonial houses lining a street in a Colombian town

Why TopSource for Employing in Colombia

TopSource for Employer of Record, global payroll or any other of our services represent a simpler, more reliable and transparent option.

We don’t hide fees or sneak price increases. We don’t lock you in for employees you don’t use. But we do give you a dedicated point of contact, available on the phone so you get answers fast — including on the questions Colombia raises constantly, from prima de servicios payment scheduling to cesantías interest calculations and the transport allowance. We blend HR advisory with in-market expertise, and we stay flexible around the needs of your business.

EOR Services Colombia Payroll

Colombian national flag flying over palm-covered hills

“Their expertise and understanding of the unique hiring, payment, and human resource practices in each country has been nothing short of outstanding. Our Client Success Manager, has done just that … ensured our success. Her availability and willingness to engage on a personal level has made all the difference.”

Director of Research Operations,

“Excellent service, especially from our account manager who has gone above and beyond to help us use the platform effectively. Our manager, significantly simplifies my workload. It is like having your own TopSource HR representative on your team.”

Chief Human Resources Officer,

“TopSource has been our go-to resource for international hiring. They are responsive, thorough, respectful and knowledgeable. The Client Success team has provided us with the utmost customer service, and the more we use TopSource, the more, it gives us access to more resources and knowledge.”

Senior Manager, Human Resources ,

More than an Employer of Record.

Employer of Record services are only one way that we help you accelerate your global growth goals. From talent advisory to entity management, we give you the tools you need to research, enter and expand into your key markets.

Market Selection Advisory

Compare available talent, compensation, additional costs and regulations across different countries

Salary Benchmarking

Identify and prioritize markets for growth based on talent, cost & regulations

Global Skills Analysis

Map skill availability by region to align talent strategies with business goals..

Talent Acquisition

Find, hire & onboard the highly skilled team members you need in each locality.

Talent Strategy Optimization

Optimize your talent strategy to enable your organization to achieve it’s global ambitions.

Global Benefits Review

Benchmark your global benefits to boost employee retention.

Frequently
asked questions

The all-in cost is layered: take the gross salary (minimum COP 2,000,000 with transport), add 38-56% in employer contributions (depending on earnings), then add prima de servicios accrual (one month per year paid twice) and cesantías accrual (one month per year plus 12% interest). Total annualised cost is approximately 35-40% above base salary. We quote exact costs per hire including all obligations before you commit.

Prima de servicios is a government-mandated 30-day salary bonus equal to one month of gross salary. It is paid in two instalments: one in June and one in December. It is not discretionary or performance-based; every employee receives it from their first day. This effectively adds two extra months of salary costs spread across June and December.

Cesantías (severance) accrues at one month’s salary per year of service, calculated from the first day. Employers must deposit accumulated cesantías into a severance fund (fondo de cesantías) by February 14 each year. Additionally, 12% annual interest is paid on the accrued balance, paid directly to the employee by January 31. Both the principal and interest are mandatory.

Employees earning up to 2 times the minimum wage (COP 3,501,810 in 2026) receive a mandatory monthly transport subsidy of COP 249,095 on top of salary. The allowance applies automatically and does not need to be negotiated. Above 2x minimum wage, the allowance does not apply.

The minimum wage jumped 23% from COP 1,423,500 to COP 1,750,905 (plus transport COP 249,095, total COP 2,000,000), the largest increase in modern history. This creates immediate pressure on the entire salary band, as lower-paid staff jump upward. Even employees earning well above minimum wage typically receive raises to maintain internal equity.