Your 2025 Guide to Hiring in Colombia: Laws, Regulations, and Compliance.

Hiring in Colombia presents a world of opportunities for international employers, thanks to its skilled workforce, cost-efficiency, and strategic location. However, navigating Colombia’s employment landscape requires a deep understanding of its laws and regulations to ensure compliance and avoid legal risks.

This guide covers everything you need to know to navigate Colombian employment laws, along with insights on how Recruitable by CYC can simplify the process as your Employer of Record (EOR).

Types of Employment Contracts

Indefinite-term contracts (preferred for long-term employment).
Fixed-term contracts (minimum 1 month, maximum 3 years, renewable).
Freelance/Service contracts (used for independent contractors).

Contracts must be in Spanish and include specific terms such as job description, salary, and benefits.

Understanding the Regulations

The Colombian employment laws are worker-centric, designed to protect employees’ rights and ensure fair treatment.

Minimum Wage and Salary

The minimum wage as of January 1, 2025 is COP 1,423,500/month (about USD $300), representing a 9.5% increase from the previous year.

TRANSPORTATION SUBSIDY

Employees earning up to twice the minimum wage are entitled to a monthly transportation subsidy of COP 200,000, bringing the total monthly compensation to COP 1,623,500.

WORKING HOURS & OVERTIME

The standard workweek in Colombia is 48 hours, typically distributed as 8 hours per day over six days. Overtime is capped at 2 hours per day and must be compensated at 125%-175% of the standard rate.

CALCULATIONS TABLE

COMPONENT	AMOUNT (COP & USD)	NOTES
Base Salary	COP 1,423,500 / USD $330*	Monthly minimum wage.
Transportation Subsidy	COP 200,000 / USD $47*	For employees earning up to twice the minimum wage.
Total Monthly Compensation	COP 1,623,500 / USD $377*	Base Salary + Transportation Subsidy.

*USD AMOUNTS MAY FLACTUATE DUE TO CONVERTION RATES.

Mandated Employee Benefits

Social Security Contributions

Employers are required to contribute to the Colombian Social Security System, which includes:

Pension Fund: Employers contribute 12% of the employee's monthly wage, while employees contribute 4%. The maximum contribution per month is equal to 25 minimum monthly wages.
Health Care: Employers contribute 8.5% of the employee's monthly wage.The maximum contribution per month is equal to 25 minimum monthly wages.
Labor Risks: Employers contribute between 0.522% and 6.96% of the employee's monthly wage, depending on the risk classification of the employee's occupation.
Family Welfare (ICBF): Employers contribute 3% of the employee's monthly wage.
National Apprenticeship Service (SENA): Employers contribute 2% of the employee's monthly wage.

13th Month Salary (Prima)

Employees are entitled to an annual bonus, known as the "prima," equivalent to one month's salary, paid in two installments: one in June and another in December.

These payments are prorated for employees who have not worked a full year.

Severance Pay (Cesantias)

Employers must provide severance pay equivalent to one month's salary for each year of service, or a proportional amount for partial years.

Paid Leave

Employees are entitled to the following paid leaves:

Annual Vacation: 15 working days per year.
Maternity Leave: 14 weeks (98 days) of paid leave.
Paternity Leave: The duration has been progressively increasing and is expected to reach four weeks by 2026.
Sick Leave: Paid leave for illness, with compensation details varying based on the duration and nature of the illness

Family Compensation Fund

Employers are required to contribute to a Family Compensation Fund, typically 4% of the employee’s monthly wage.

Ocupational Risk Insurance

Employers must provide insurance coverage for work-related accidents and illnesses. The contribution rate varies based on the risk classification of the employee's occupation.

Public Holidays

Colombia has one of the highest numbers of public holidays globally, with 18 official public holidays in 2025, many of which fall on Mondays due to the "Emiliani Law," which moves holidays to the closest Monday to promote tourism and economic activity.

Basic Principles

Holiday regulations apply to all types of employment contracts, whether full-time, part-time, or fixed-term for employees.
Freelancers are not entitled to paid public holidays. Payment is based solely on the agreed terms of their service contract, such as deliverables or hours worked.
- Since freelancers are not considered employees, Colombian labor laws that mandate additional pay for holiday work do not apply. The relationship is governed by civil or commercial law, not labor law.
Holiday Pay Reporting: Employers must ensure that additional holiday pay is calculated and reported in the payroll system, as it forms part of mandatory contributions (e.g., social security and taxes).
Overtime on Holidays: If employees work overtime on a public holiday, they are entitled to 175% of their standard hourly rate (150% for the holiday + 25% for overtime).
Pro-Rated Holidays for Part-Time Workers: Part-time employees must receive holiday pay proportional to the hours they regularly work.

PUBLIC HOLIDAY CALENDAR FOR 2025

Month	Date	Holiday Name
January	1st	New Year's Day
January	8th	Epiphany (moved to Monday)
March	24th	Saint Joseph's Day (moved to Monday)
April	28th	Holy Thursday
April	29th	Good Friday
May	1st	Labor Day
May	12th	Ascension Day (moved to Monday)
June	3rd	Corpus Christi (moved to Monday)
June	10th	Sacred Heart (moved to Monday)
July	1st	Saint Peter and Saint Paul (moved)
July	20th	Independence Day
August	7th	Battle of Boyacá
August	19th	Assumption Day (moved to Monday)
October	14th	Columbus Day (moved to Monday)
November	4th	All Saints' Day (moved to Monday)
November	11th	Independence of Cartagena
December	8th	Feast of the Immaculate Conception
December	New Year's Day	Christmas Day

Payroll and Compliance

Colombian payroll is governed by strict rules, with specific deductions and contributions that must be calculated accurately.

Payroll Deductions and Contributions

Employee Withholdings: Employers must withhold a portion of each employee’s salary for social security, including pensions (4%) and health contributions (4%).
Parafical Contributions: Additional contributions (28.5% of salary) cover health, pensions, and occupational risk insurance. Contributions are submitted monthly to avoid late fees.

Payroll Cycles and Reporting

Monthly Payroll Cycle: The standard payroll cycle is monthly, with employees receiving their pay on the last working day of the month. Businesses must submit payroll reports to relevant government bodies to maintain compliance.
Compliance Audits: Employers are subject to audits by the Colombian authorities, who may impose fines for miscalculations, late payments, or incorrect filings.

Risk of Non-Compliance

The Colombian Ministry of Labor has intensified audits to detect the misclassification of employees as contractors, leading to increased penalties for non-compliance. Businesses must ensure accurate classification.

Employment Termination

Colombia has specific laws around employment termination and severance, with a strong emphasis on employee protection.

Grounds for Termination

Mutual Agreement: Both parties agree to terminate the contract.
Just Cause Termination: Defined by law as misconduct, breach of contract, or poor performance.
Without Cause Termination: Employers can terminate without cause but must provide severance based on the employee's length of service and salary.

Notice Period

Employers must provide advance notice of termination, typically 30 days unless otherwise specified in the employment contract.

Severance Payments

Standard Severance: Employees dismissed without cause are entitled to severance payments, which vary by contract type and duration of employment.
Liquidation Process: Employers must go through a liquidation process to calculate final payments, which includes severance, unused vacation, and any additional benefits.

Importance of Compliance

Protect your business reputation, avoid expensive fines, and foster trust with employees.

For many international companies, setting up a legal entity in Colombia to manage employment law compliance is both time-consuming and costly. That’s where an Employer of Record (EOR) like Recruitable comes in.

Challenges and Risks to Consider

While Colombia offers significant benefits, navigating employment laws without local expertise can pose risks.

High Compliance Standards: Colombia has strict labor laws, and penalties for non-compliance are steep.
Complex Payroll Calculations: Payroll in Colombia involves numerous deductions and contributions that can be challenging to manage.
Language and Cultural Barriers: Conducting business in Colombia requires sensitivity to local language and customs, which can be challenging without local support.

Simplify Compliance with Recruitable by CYC

Recruitable acts as the legal employer for your Colombian employees, handling payroll, taxes, and compliance so you don’t have to.

Local Compliance Expertise: Recruitable stays up-to-date on Colombian employment law, ensuring that all payroll, tax, and benefit requirements are handled accurately.
Payroll and Tax Management: With Recruitable as your EOR, payroll is calculated correctly, and all contributions—social security, health, and pension—are remitted on time.
Onboarding and Contracts: Recruitable manages all aspects of hiring, from drafting contracts to onboarding new employees, in compliance with Colombian laws.
Risk Mitigation: By ensuring compliance, Recruitable reduces the risk of fines and legal complications, allowing your business to focus on growth without administrative burdens.

Benefits of Using Recruitable’s EOR Services

No Local Entity Needed: Avoid the hassle and cost of setting up a local entity in Colombia.
Cost Savings: By handling compliance, Recruitable prevents costly mistakes and fines associated with payroll or benefits mismanagement.
Scalability: Easily scale your team in Colombia without worrying about employment law changes or administrative load.

Download the guide today and hire with confidence!