Key Takeaways:
- In Colombia, employers are required to provide a range of statutory benefits, including social security contributions, mandatory bonuses, and paid leave.
- Employer social security costs typically range from 16.5% to over 36% of an employee's salary, based on income and risk class.
- Offering supplemental benefits, such as private health insurance and flexible work arrangements, can give your company a competitive edge in Colombia's growing talent market.
Colombia has quickly become one of the leading hiring hubs in Latin America, and it’s not hard to see why. There’s a growing number of skilled professionals, and labor costs are still relatively competitive.
However, the government has been making changes to labor laws across the board, including updates to the maximum number of hours in a standard workweek, so employers need to stay on top of.
If you're planning to employ workers in Colombia, here's what you need to know about the benefits you're legally required to provide and the optional ones that will help you stand out.
Who Is Entitled to Employee Benefits in Colombia?
In Colombia, statutory benefits are governed by the Labor Code and apply to employees hired under an employment contract, whether that contract is indefinite, fixed-term, or project-based. Part-time employees are also entitled to benefits, typically pro-rated based on hours worked.
Independent contractors, however, are generally not entitled to benefits. That said, proper worker classification is critical. If someone hired as a contractor later is deemed to have been functioning as an employee, the company could face penalties, back pay, and legal liability.
For more on the distinction, see our guide to hiring and paying independent contractors in Colombia.
Minimum Wage and Working Hours
Minimum Wage
Colombia's national minimum wage is updated annually by government decree. As of January 2026, the monthly minimum wage is COP 1,750,905, a roughly 23% increase over 2025 and the largest single-year jump in recent history.
Employees earning up to twice the minimum wage (approximately COP 3,501,810 per month) also receive a mandatory transportation allowance of COP 249,095 per month.
Note: This allowance is not included in the base for social security contributions but is factored into the calculation of severance pay.
Standard Working Hours
Colombia is gradually reducing its standard workweek from 48 to 42 hours under Law 2101 of 2021. The change is rolling out in stages, with each step taking effect on July 15 each year:
- July 2023: 47 hours
- July 2024: 46 hours
- July 2025: 44 hours
- July 2026: 42 hours (final target)
This reduction does not affect employee salaries or benefits. Daily hours can be distributed flexibly, with a minimum of 4 and a maximum of 9 per day, as long as the weekly total stays within the legal limit.
Overtime Pay
If employees go beyond the standard workweek, overtime rates apply:
- Daytime (6 a.m. to 7 p.m.): +25%
- Nighttime (7 p.m. to 6 a.m.): +75%
- Sundays and holidays: 80% as of July 2025, rising to 90% in July 2026 and 100% in July 2027
It's worth noting that Colombia's 2025 labor reform (Law 2466) redefined night hours to 7 p.m. to 6 a.m., earlier than the previous 9 p.m. start time. Regular hours worked at night also come with a 35% surcharge, even if it’s not overtime.
Social Security Contributions
Any company employing Colombian workers is responsible for contributing to the country's social security system, which covers health, pensions, and workplace risks. The overall cost depends on the employee's salary level.
Employer Contribution Breakdown
- Health insurance (EPS): 8.5% of salary (employees contribute an additional 4%)
- Pension fund: 12% of salary (employees contribute 4%)
- Occupational risk insurance (ARL): 0.522% to 6.96%, depending on the company's risk classification (paid entirely by the employer)
- Parafiscal contributions: 9% total, split among SENA (2%), ICBF (3%), and Caja de Compensacion (4%)
One important detail: employers that are income tax declarants are exempt from the health, SENA, and ICBF contributions for employees earning less than 10 times the minimum wage. This can reduce the total employer cost from roughly 30%–36.5% down to about 16.5%–23%, a significant difference for companies employing workers at or near the median salary.
What These Contributions Cover
These contributions provide employees with access to:
- Healthcare (including coverage for dependents)
- Retirement pensions
- Disability and survivor benefits
- Workplace injury protection
- Family welfare programs, such as subsidized recreation, housing support, and training
The Prima de Servicios and Other Mandatory Bonuses
Colombia has several statutory bonuses that employers must provide by law.
Prima de Servicios
This is a mandatory annual bonus equivalent to one month's salary, often referred to as 13th-month pay. It’s paid in two installments: the first by June 30, and the second by December 20. The bonus applies to all employees with a labor contract, and is prorated for those who have not worked the full period.
Severance Pay (Cesantias)
Employers need to set aside severance pay equal to one month’s salary for each year an employee works. This amount is calculated as of December 31 each year and must be deposited into an authorized severance fund by February 14 of the following year. Employees can withdraw funds early for housing, home improvements, or education.
Interest on Severance
In addition to the severance deposit, employers must pay 12% annual interest on the accumulated amount to the employee by January 31 of each year. If either the severance deposit or the interest payment is late, a penalty of one day’s salary applies for each day of delay.
Paid Leave Entitlements
Employees in Colombia are entitled to several types of paid leave.
Annual Leave (Vacation)
After 12 months of continuous service, employees earn 15 paid vacation days per year. At least six of those days must be taken consecutively, and employers are responsible for scheduling the vacation, with at least 15 days’ notice.
Public Holidays
Colombia observes 18 public holidays per year, making it one of the countries with the most public holidays in the world. Many holidays are moved to Mondays under the country's bridge law to create long weekends.
Maternity and Paternity Leave
- Maternity leave: Mothers receive 18 weeks of fully paid leave, funded through the social security system. One prenatal week is mandatory. For multiple births, leave is extended by two additional weeks. Up to six of the 18 weeks can be shared between both parents by mutual agreement.
- Paternity leave: Fathers receive two weeks (14 calendar days) of paid leave at 100% of their salary. The employer pays and is reimbursed by the health insurer (EPS).
Sick Leave
Employees are entitled to up to 180 days of sick leave with a medical certificate. The employer pays for the first two days at two-thirds of the salary.
From day three onward, the social security system covers the cost: 66.67% of salary through day 90, then 50% through day 180. In practice, the employer often fronts all payments and seeks reimbursement from the EPS.
Health Insurance in Colombia
Employer Responsibilities
Colombia's mandatory health system is funded through employer and employee contributions totaling 12.5% of salary. Employers must enroll employees in an EPS (Entidades Promotoras de Salud) and make monthly contributions through the PILA payment platform. Coverage includes medical services, hospitalization, preventive care, and maternity support, and extends to employee dependents.
Supplementary Health Coverage
While the public system provides a baseline of care, many employers choose to offer private health insurance, known as medicina prepagada or plan complementario, to complement it.
Private plans offer faster access to specialists, broader hospital networks, and shorter wait times, and they are among the most valued supplemental benefits among Colombian professionals.
Solutions like RemoHealth and RemoHealth Local can help companies offer competitive, globally consistent coverage to their teams.
Pension System Overview
Employer Obligations
Colombia operates a dual pension system. The total contribution rate is 16% of salary, split between the employer (12%) and the employee (4%). Employers are responsible for withholding and remitting both shares each month.
Employee Choice
Employees can choose between the public RPM regime, managed by Colpensiones, or the private RAIS regime, managed by individual pension fund administrators (AFPs).
Under the public system, the retirement age is 57 for women and 62 for men, with a minimum of 1,300 weeks of contributions. Under the private system, there is no fixed retirement age. Employees can retire once their individual savings are sufficient to fund a pension.
Workers can switch between regimes every five years, but cannot do so within 10 years of retirement age.
Workers' Compensation and Occupational Risk Insurance
Employers must enroll all employees in Colombia's occupational risk insurance system, known as ARL. This coverage is paid entirely by the employer, and the rate depends on the company's risk classification:
- Class I (office and admin work): 0.522%
- Class II (light manufacturing, retail): 1.044%
- Class III (medium-risk manufacturing): 2.436%
- Class IV (heavy industrial, transport): 4.350%
- Class V (construction, mining): 6.960%
ARL covers workplace accidents, occupational illnesses, temporary and permanent disability, rehabilitation, and survivor benefits. The rate can be adjusted over time based on the company's safety record.
Optional and Supplementary Benefits
While Colombia's statutory benefits package is already robust, many employers go further to attract and retain top talent.
Common Additional Benefits
Common supplemental benefits include:
- Private health insurance
- Meal vouchers or food allowances
- Transportation support beyond the legal minimum
- Flexible and remote work arrangements
- Performance bonuses
- Life insurance
- Education and training stipends
These additional benefits can make a real difference in a competitive hiring market, especially for skilled technical and professional roles.
Hire in Colombia While Offering Benefits Employees Actually Value
Navigating employee benefits in Colombia requires staying up to date with a shifting regulatory landscape, from the gradual reduction in the workweek to the recent labor reform and pension changes. That's a lot to manage, especially without a local Colombian entity.
RemoFirst makes it straightforward to employ, pay, and manage workers in 185+ countries, including Colombia, without setting up a legal entity. As an Employer of Record (EOR), we handle compliance, payroll, and statutory benefits on your behalf.
We also help you go beyond the basics by offering competitive, localized benefits packages, including health coverage through RemoHealth and RemoHealth Local. With RemoFirst, you can:
- Ensure full compliance with Colombian labor laws
- Offer attractive benefits that help you win top talent
- Manage your entire global team from one platform
Ready to build your team in Colombia? Schedule a demo to see how RemoFirst can support your global hiring strategy.
