The contract must be in Spanish, and bilingual contracts are also acceptable. The contract must be in written form and signed by both parties.
The contract must include: Name, Start Date, Duration of Employment, Job Description, Termination Conditions, Contract Type (Overall Contract or General Contract).
Note: It is recommended that local employees/foreign employees with permanent residency sign open – ended employment contracts. For foreign employees on work visas, due to the validity of the work visa, they need to sign fixed – term employment contracts.
Part – time Employees: IC Contracts
2. Overview of Local Statutory Welfare Systems
Salary Payment: The frequency is once or twice a month. The current month’s salary must be paid before the last working day of the month.
Monthly Minimum Wage: The minimum wage is 1,423,500 Colombian Pesos, and the comprehensive minimum wage is 18,505,500 Colombian Pesos.
Probation Period: The probation period is not mandatory. The maximum probation period for an open – ended contract is 60 days; for a fixed – term contract, the maximum probation period is one – fifth of the initial agreed term, with a maximum of 60 days.
Employer Costs:
The calculation method of the employer’s social security costs depends on the employee’s salary type. For employees receiving ordinary salaries, their social security costs are calculated based on 100% of their salaries, with a maximum limit of 32,500,000 Colombian Pesos in 2024. For employees receiving full salaries, their social security costs are calculated based on 70% of their salaries, with the same maximum limit. The maximum contribution limit is calculated based on 25 times the minimum salary.
Please note: EOR employees in Colombia are entitled to at least 15 days of paid leave per year. These 15 days of paid leave are equivalent to 4.17% of the employee’s total annual salary.
Monthly Costs:
Pension Fund – 12%
Labor Risk – 0.52% – 6.96% depending on the employee’s position and risk level
Family Fund “CCF” – 4%
Social Security and Public Health – 8.5%
Family Fund “ICBF” – 3%
Training Fund “SENA” – 2%
Legal Quotation “SENA” – 61,500 Colombian Pesos
Work – from – Home Allowance – $32
Annual and Semi – annual Costs for Employees with Ordinary Salaries:
Interest on Severance Fund Contribution – 12% of the 14th – month salary
*50% is paid in June and 50% in December.
Conditional Costs:
Legal Connectivity Allowance – 140,606 Colombian Pesos, prorated based on the number of working days, only applicable to employees with salaries below the statutory minimum wage.
3. Salary Payment and Statutory Leave Responsibilities
Personal Income Tax: The personal income tax rate ranges from 0% to 39%. Income tax is calculated using a progressive tax rate. Various other factors such as family status and the number of children may also affect the overall tax rate. Note: The UVT index is used for calculation, and the index is 49799 COP in 2025.
Overtime Pay and Maximum Working Hours:
Employees receiving ordinary salaries (non – comprehensive salaries), i.e., those with salaries below 13 times the minimum wage, must be paid overtime pay. Hours outside the standard working hours are also considered overtime. For additional working hours, employees will receive the following additional compensation:
25% of the hourly wage during the standard working week
75% of the hourly wage for night shifts, Sundays, and holidays
150% of the hourly wage for night shifts on Sundays and holidays.
Employees entitled to overtime pay can work a maximum of 2 hours of overtime per day and a maximum of 48 hours of overtime per week.
The standard working hours are 8 hours per day and 40 hours per week. The standard working week is from Monday to Friday. According to Law No. 2101 of 2021, the maximum weekly working hours for Colombian employees must be gradually reduced from 48 hours to 42 hours in the next few years.
This change does not affect employees’ wages and benefits.
From 2023 to 2026, the maximum weekly working hours will be reduced on July 15th each year:
2023: Reduced from 48 hours to 47 hours.
2024: Reduced from 47 hours to 46 hours.
2025: Reduced from 46 hours to 44 hours.
2026: Reduced from 44 hours to 42 hours.
The reduction of the maximum weekly working hours will stop on July 15, 2026.
Note: In addition, for management positions, decision – making positions, and trusted positions, overtime pay may not be required. A trusted clause can be added to the employment contract, and after signing, overtime pay may not be paid.
Statutory Leave: Full – time and part – time employees are entitled to 15 working days of paid time off (PTO) per year. PTO is accrued monthly at a rate of 1.25 days per month. Employees can enjoy annual leave after working for one year.
Handling or Conversion Logic of Unused Annual Leave at the End of the Year: Unused annual leave can be carried over to the next year. In principle, it can be carried over for a maximum of two years. After two years, the employer can force employees to take leave, and at least one consecutive leave must be guaranteed each year. Note: In practice, many companies do not force employees to take leave, and it is not uncommon for employees to accumulate forty or fifty days of annual leave. Since the unused annual leave needs to be settled when the employment contract is terminated, excessive accumulated days will increase the company’s costs, which needs attention.
Statutory Holidays: Colombia has 18 national statutory holidays throughout the year, including: New Year’s Day, Epiphany, St. Joseph’s Day, Maundy Thursday, Good Friday, Labour Day, Ascension Day, Corpus Christi, Sacred Heart Day, Saint Peter and Saint Paul, Independence Day, Battle of Boyacá Day, Assumption of Mary, Columbus Day, All Saints’ Day, Cartagena Independence Day, Immaculate Conception, Christmas Day. Note: Employers need to purchase gifts for employees as a benefit (ancheta) during Christmas.
Other Leaves:
Maternity Leave: Employees are entitled to 126 days of paid leave. Seven days must be taken before the child is born. During this period, employees will receive 100% of their average salary, which is paid by the employer and reimbursed by the social security department. Employees cannot extend their leave. Note: Usually, it is 1 week before delivery + 17 weeks after delivery. If an additional week of leave is required before delivery due to medical reasons, it is 2 weeks before delivery + 16 weeks after delivery. If it is not possible to take leave before delivery due to medical reasons, the full 18 weeks of leave will be taken after delivery.
Paternity Leave: Employees are entitled to 14 days of paid paternity leave, which must be taken after the child is born. During this period, employees will receive 100% of their salary, which is paid by the employer and reimbursed by the social security agency. Employees cannot extend their leave.
Parental Leave: There is no law in Colombia covering parental leave. However, employees may be entitled to maternity and paternity leave.
Sick Leave: Employees are entitled to a maximum of 540 days of paid sick leave. The salary standard and payer vary depending on the length of the sick leave. If the sick leave is caused by a work – related accident, employees will receive 100% of their basic salary during the leave, and the insurance company will be responsible for the payment. Note: The employer needs to pay 100% of the salary for 0 – 2 days; the medical insurance agency is responsible for 3 – 90 days and 90 – 180 days; the pension agency is responsible for periods exceeding 180 days.
Calculation Logic of Salary for Incomplete Attendance (including Absence or Unpaid Leave):
Expatriate Employees:
Local Minimum Wage Required for Split Payroll Work Visas: There is no clear regulation, but the Ministry of Foreign Affairs will make horizontal comparisons when reviewing visas. For example, what salaries are paid to employees in the same position by other Chinese or foreign – funded enterprises. Generally, Chinese enterprises will pay 5,000,000 – 10,000,000 COP according to the specific situation.
Whether Local Social Welfare Can Be Withdrawn (e.g., Housing Provident Fund): The housing/education fund (Cesantias) can only be withdrawn with relevant materials when purchasing a house or studying at a local university. Pension cannot be received before reaching the retirement age or the required contribution period. Chinese employees of Chinese – funded enterprises usually sign fixed – term employment contracts due to visa reasons, so they may not need to pay pension.
4. Dismissal Rules and Compensation Arrangements
Dismissal (Legal Requirements and Best Practices):
Notice Period:
Legal Requirements: No prior notice is required; it is not allowed to replace the notice period with compensation; “Garden Leave” is not allowed.
Local Common Practice: Usually, there is no notice period; it is not common to replace the notice period with compensation; the “Garden Leave” practice is not widespread.
Termination of Employment Contract Due to Employee’s Fault (Termination With Cause):
Definition: It refers to the situation where the employer can immediately terminate the employment contract without prior notice or payment of compensation due to the employee’s intentional misconduct. Applicable situations include but are not limited to: serious attendance problems, theft of company funds or property, violations of the employment contract, company policies, or laws, forgery or alteration of records, harassment, and violence.
Compliance Requirements: The employer must implement a formal and reasonable disciplinary procedure in accordance with the law to ensure legal termination.
Notice Period: There is no mandatory legal notice period.
Severance Compensation: There is no mandatory legal compensation obligation, but normal separation settlement payments should be made (including unpaid Cesantias and Censatias interest, settlement of unused leave, settlement of unpaid statutory bonuses, etc.).
Employee Notification Method: It can be sent via email, and electronic or digital signatures are acceptable.
Termination of Employment Contract Due to Lay – off or Other Business Reasons (Termination for Redundancy or Other Business Reasons):
Definition: It refers to the situation where the employer terminates the employment relationship with the employee due to business adjustments, resulting in the non – existence of the employee’s original position, responsibilities, or functions.
Applicable Situations: In principle, any reason that does not violate the employee’s constitutional or employment rights is acceptable. It should not involve sensitive issues such as discrimination and union protection. Pregnancy or illness may not constitute a legal reason for lay – off in some cases.
Compliance Requirements: If operating through the Deel platform, relevant facts and backgrounds need to be explained in advance to comply with the legal and compliant process.
Notice Period: There is no mandatory legal notice period.
Severance Compensation:
For employees with open – ended contracts: If the length of service is ≤ 1 year, 30 days’ salary will be paid; for each additional year of service, 20 days’ salary will be added (prorated). Separation settlement payments (including unpaid Cesantias and Censatias interest, settlement of unused leave, settlement of unpaid statutory bonuses, etc.) will also be made.
For employees with fixed – term contracts: All payable amounts for the remaining period of the contract will be paid, including monthly salary, 13th – month salary, 14th – month salary (if applicable), and other statutory benefits.
If the employee is required to sign a waiver of subsequent claims, additional compensation may be required.
Final Salary Payment Time: It must be paid within 15 days after separation.
Notification Method: The notice can be sent via email, and electronic or digital signatures are acceptable.
Employee’s Voluntary Resignation (Resignation):
Definition: It refers to the situation where the employee voluntarily terminates the employment relationship by submitting a signed resignation letter, which can be initiated at any time.
Compliance Requirements: The resignation must be voluntarily proposed by the employee unilaterally without any coercion or inducement from the client or Deel. The resignation letter must clearly state the last working date. The resignation letter must be signed and confirmed by the employee.
Notice Period: There is no mandatory legal notice period requirement.
Separation Settlement: Separation settlement payments (including unpaid Cesantias and Censatias interest, settlement of unused leave, settlement of unpaid statutory bonuses, etc.) will be made.
Final Salary Payment Time: It should be paid within the next normal payroll cycle.
Mutual Termination of Employment Contract (Mutual Termination):
Definition: It refers to the situation where the employer and the employee voluntarily reach an agreement to terminate the employment relationship for any reason.
Common Applicable Situations: The employee has potential dispute risks and may be inclined to file a lawsuit; the employee cannot be legally dismissed through “with cause” or “without cause” methods; the employee and the client reach an agreement and voluntarily propose to terminate the contract.
Notice Period: There is no legal notice period requirement.
Severance Compensation: Although there is no mandatory legal obligation, it is recommended to provide some compensation to reduce the risk of the subsequent agreement being questioned or sued by the employee.
Conversion of Annual Leave for Separated Employees:
Termination of Employment Relationship During the Probation Period (Termination During Probation Period):
Definition: During the employee’s probation period, either the employer or the employee can decide to terminate the employment relationship in advance.
Applicable Situations: The employee can terminate the contract without providing a reason; the employer must base the termination on the employee’s work performance or behavioral issues. Common reasons include: sub – standard work performance, inappropriate behavior, repeated tardiness, or unexcused absences.
Compliance Requirements: If initiated by the employer, the reason must not involve discrimination or other illegal acts.
Notice Period: It shall be implemented in accordance with the probation period clause in the employment contract.
Severance Compensation: There is no mandatory legal compensation obligation.
5. Analysis of Local Government’s Incentive Measures and Policies for Local Company Establishment and Local Employee Hiring
Incentive Policies:
Local Employment Protection Policy: It restricts the proportion of foreign employees with immigrant – type work visas within the company and various protection policies for employees based on labor laws.
Quota Ratio for Foreign Employees’ Work Visas: There are basically two types of legal work visas in Colombia: immigrant – type work visas (working visa) and temporary service – type work permits (temporary service visa). Currently, it is almost impossible to obtain the first – type visa. Most Chinese employees of companies choose to apply for the second – type visa, and the stipulated employment ratio is 15% (not strictly enforced in practice).
Financial Policies:
Tax Incentives:
Tax – free income and VAT refund for social and priority housing projects.
Special systems for free – trade zones and international logistics distribution centers (see the foreign trade section).
Income tax rate reduction for companies located in economic and social special zones (ZESE) and areas most affected by armed conflicts (ZOMAC).
Tax credits for investments in research, technology development, and innovation projects or the introduction of high – level human capital.
Special income tax deductions, VAT exemptions, tax credits, tariff exemptions, accelerated depreciation, and tax – free income for non – traditional energy production and efficient energy management projects.
Subsidies for creating new employment opportunities.
6. Local Human Resources Analysis and Employment Suggestions
Number of Employed People: As of June 2025, the number of employed people is 23.8 million.
Unemployment Rate: 0.086
Average Salary Trend: $860
Employment Suggestions: As a foreign – funded enterprise, it is necessary to strictly abide by local labor laws to avoid compensation and fines caused by employment risks. In addition, avoid the use of non – compliant visas to avoid fines. It should also be noted that if a company has more than 25 employees, a trade union needs to be established.
7. Local Cultural Adaptation
Language: Spanish
Religious Customs: Catholicism
Business Culture: Pay attention to maintaining customer relationships, such as inviting customers to meals, entertainment, and giving gifts. Generally, the work process is slow, and gentle reminders can be made. Special attention should be paid to dressing formally when visiting government enterprises.
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