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Minimum wage in Colombia

Colombia's payroll

Social security in Colombia

Employee benefits in Colombia

Compliant, seamless payroll and benefits in Colombia and beyond

Payroll in Colombia

Colombia has its own laws, rules, and customs when it comes to employee compensation. And if you want your expansion to succeed, you need to understand these regulations and cultural norms, as well as what Colombian talent is looking for.

That can be a lot to handle, especially if you’re unfamiliar with the Colombian market, which has complex labour laws and tax regulations. Non-compliance with these laws could lead to hefty fines and damage to your company’s reputations.

Payroll outsourcing in Colombia

That’s why more and more companies are turning to payroll outsourcing to ensure compliance and reduce the risk of legal issues. Outsourcing payroll can be more effective than maintaining an inhouse payroll team, as it reduces administrative costs and allows you to focus on other important aspects of the business.

If you choose to outsource your payroll in Colombia, make sure to partner with a reliable global payroll provider, such as CXC, that can provide access to expertise and resources that might not be available in-house.

In this guide, we will provide everything you need to know about compensation and benefits in Colombia, including the minimum wage, statutory benefits, social security, and other types of employee’s benefits you need to know.

Minimum wage in Colombia

As of 1 January 2026, the minimum wage in Colombia is set by government decree and applies nationwide. The statutory minimum monthly salary is COP 1,423,500, and eligible employees are also entitled to a monthly transport subsidy of COP 200,000, bringing the total mandatory minimum compensation to COP 1,623,500 per month.

The minimum wage is regulated by the government and reviewed on an annual basis, and employers are required to comply with the updated rate from the start of each calendar year. Failure to apply the statutory minimum wage and transport subsidy may result in labour sanctions and fines. In practice, international and multinational companies operating in Colombia generally offer compensation above the legal minimum, particularly for professional, technical, or hard-to-fill roles. If you would like benchmark salary information for skilled or white-collar positions in Colombia, our team can provide further guidance.

Colombia's payroll

Payroll cycle in Colombia

The payroll cycle in Colombia varies. Generally, it follows a monthly basis payroll cycle, with payments being released on the last working day of the month.

However, it is also common in some industries to have a bi-monthly payroll cycle, where employees receive their salaries on the 15th and the last day of each month.

Payroll taxes in Colombia

When it comes to taxes, employers are responsible for withholding payroll taxes and making contributions to social security on behalf of their employees. Payroll taxes include contributions to the general pension system, health insurance, and professional risks insurance.

Employers also contribute to family welfare funds, which support the Colombian Institute of Family Welfare (Instituto Colombiano de Bienestar Familiar).

The distribution of payroll taxes and contributions is typically:

Health insurance: 12.5% of the employee’s monthly salary, with 8.5% paid by the employer and 4% paid by the employee.
Pension contributions: 16% of the monthly salary, split between 12% from the employer and 4% from the employee.
Professional risks (workmen’s compensation): Between 0.522% and 6.960%, depending on the company’s risk classification, paid solely by the employer.
Family welfare fund (ICBF), SENA (National Learning Service), and family compensations: Companies also make a contribution to these social programs, which account for an additional 9% of the employee’s salary, covered entirely by the employer.

As an employer, you must ensure that payroll taxes are calculated and paid within the established time limits to remain compliant and avoid costly penalties.

13th-month salary in Colombia

There is a mandatory 13th-month salary payment in Colombia. This means that employers are required to provide a 13th-month salary to their employees.

The 13th-month salary, often referred to as the ‘Prima de Navidad’, is split into two payments: one by the end of the first half of June and the other by the first 20 days of December.

Social security contributions in Colombia are a mandatory set of payments that both employers and employees make for the country’s social security system. This system covers pension, health insurance, and labour risks insurance.

Employees must be registered in the social security system. Employers are required to make the necessary monthly contributions on time. They are responsible for withholding the employee’s contribution from their wages and adding the employer’s share before making the collective payment to the national system.

On the other hand, if foreign employees are already covered by a pension system in their home country, they don’t have to enrol in or contribute to the Colombian pension system.

Social security rates in Colombia

Employers and employees must keep in mind the social security rates that they must follow:

Pension system: The total contribution rate is at 16%, with 12% contributed by the employer and 4% by the employee.
Health insurance contributions: This amounts to 12.5% of the monthly salary, shared between the employer at 8.5% and the employee at 4%.

Typically, employers contribute an average of 30% of the employee’s contributory base income, which varies according to the level of risk associated with the employee’s job, solely for labour risks insurance.

Social security benefits in Colombia

Social security contributions in Colombia provide several benefits to workers and their families, including:

Retirement benefits: Social security contributions fund pension payments, ensuring financial support for individuals upon retirement.
Health care: Contributions ensure access to public healthcare services, covering a range of medical needs including preventive care, medical treatments, and emergency services.
Disability benefits: Social security offers protection by providing financial assistance to individuals who become disabled and are unable to work.
Workplace injury benefits: The system covers labour risks, providing compensation and medical care in the event of workplace injuries or occupational diseases.

These contributions help maintain social welfare and provide security against various risks associated with loss of income due to age, health issues, or workplace injuries.

Employee benefits in Colombia

To create an attractive offer for your employees, you need to be aware of the statutory and non-statutory employee benefits in Colombia, such as the following:

Statutory employee benefits in Colombia

Paid leave and holidays in Colombia
Employees are entitled to a minimum of 15 paid vacation days following a year of continued service. In addition, the country observes 18 national holidays for which employees receive paid leave.
Pensions in Colombia
The Colombian pension system mandates contributions by the employer equivalent to 12% and 4% by employees. This ensures that employees are supported financially upon retirement.
Healthcare in Colombia
There is a universal healthcare system to which employers contribute 8.5% and employees 4%. This promotes a healthier workforce with access to preventive and comprehensive medical care, which in turn can result in reduced absenteeism and increased productivity.

Workers’ compensation in Colombia

The system to cover professional risks varies from 0.522% to 6.96%, depending on the level of risk associated with the job. This ensures that those injured or sickened on the job receive the necessary support to recover, while employers maintain a safe and protective work environment.

Maternity/paternity leave in Colombia

For maternity, women receive 18 weeks of paid leave, while men receive eight (8) days of paternity leave.

Non-statutory benefits in Colombia

Employers in Colombia provide other types of benefits to attract and retain talent. The following benefits are not mandated by law, which means it’s upon the employer’s discretion to provide such benefits.

Health and wellness programs in Colombia

Employers in Colombia may provide programs that promote physical and mental well-being. This can include gym memberships, wellness workshops, health screenings, and access to mental health resources. Such initiatives help employees maintain a healthy lifestyle and reduce stress.

Flexible working hours in Colombia

Offering flexible working arrangements, such as remote work options or adjustable schedules, for employees in Colombia allows them to balance their personal and professional lives better. This flexibility can lead to increased job satisfaction and productivity.

Performance bonuses in Colombia

Many companies in Colombia provide financial incentives based on employee performance. These bonuses can reward individuals or teams for achieving specific goals, encouraging a high-performance culture, and motivating employees to excel.

Extra vacation days in Colombia

Some employers are generous enough to offer additional paid leave beyond the legally mandated vacation days. This can include personal days, mental health days, or extended holiday breaks, allowing employees more time to recharge and pursue personal interests.

Transportation allowance in Colombia

To assist with commuting costs, some employers in Colombia provide a transportation allowance or subsidised transportation options. This can help alleviate the financial burden of daily travel and improve employee attendance and punctuality.

Meal vouchers in Colombia

Most companies in Colombia offer this type of benefit that employees can use for lunches or groceries. This benefit not only supports employees’ nutritional needs but also enhances their overall well-being and satisfaction.

Education assistance in Colombia

Some employers in Colombia also offer tuition reimbursement for further education or training, funding for courses, or access to workshops and seminars, which can help employees advance their careers.

Life and accident insurance in Colombia

Aside from the statutory insurance, some companies in Colombia provide additional life and accident insurance to offer employees more peace of mind. This benefit ensures financial security for employees and their families in case of unforeseen circumstances.

Childcare assistance in Colombia

To support working parents, some companies offer childcare services or subsidies. This can include partnerships with local daycare centres or financial assistance for childcare expenses, making it easier for employees to manage their work-life balance.

Internet and mobile phone allowance in Colombia

Many companies in Colombia offer internet and mobile phone allowances as part of their non-statutory benefits. This is especially common for employees who work remotely or have roles that require regular communication and connectivity.

These allowances can help cover the costs of internet service and mobile phone plans, making it easier for employees to perform their duties effectively. Providing such benefits can also enhance employee satisfaction and productivity, as it supports their work-from-home or mobile work arrangements.

Compliant, seamless payroll and benefits in Colombia and beyond

Getting payroll and benefits right is not just a legal issue. Every country has its own customs, norms, and expectations about employee compensation. And if your operations aren’t in line with your workers’ expectations, they may not stick around for long.

Thankfully, we know what we’re doing. When you work with CXC to engage workers in Colombia, we’ll handle everything from tax withholding to employee bonuses on your behalf.

Want to find out more? Speak to our team today

FAQ's

How is payroll processed in Colombia?

Payroll in Colombia follows a structured process governed by the Código Sustantivo del Trabajo together with applicable tax, social security, and payroll regulations, and administered through several government platforms and social security systems. Here how it works in practice.

Payroll cycle
Colombia payroll runs on either a monthly or bi-weekly basis. Monthly payroll is the most common, with payments released on the last working day of the month. Bi-weekly payroll – where employees are paid on the 15th and the last day of each month is also widely used. Employers choose the cycle that best fits their operational needs, and the chosen frequency should be stated in the employment contract or otherwise communicated in accordance with applicable labour requirements.

Gross pay calculation
Each payroll cycle begins with calculating the employee’s gross salary. This includes the agreed base salary plus any variable components such as commissions, overtime pay, or shift differentials. Overtime in Colombia is capped at two hours per day and 12 hours per week subject to the exceptions permitted by Colombian labour legislation. Applicable overtime, night work, Sunday, and public holiday surcharges should be calculated in accordance with the rates in force at the time payroll is processed.

Social security deductions
Once gross pay is calculated; the employer must withhold the employee’s share of social security contributions and add the employer’s share before making a combined payment to the PILA platform. PILA (Planilla Integrada de Liquidación de Aportes) is the government’s unified system for collecting health, pension, and workplace risk contributions. Payments must be made monthly within the deadlines set by the government.

Income tax withholding
Employers are responsible for withholding income tax (retención en la fuente) where applicable- The amount withheld depends on the employee’s monthly earnings and is calculated using the tax tables published by DIAN (Dirección de Impuestos y Aduanas Nacionales). The withheld amount is remitted to DIAN on the employee’s behalf.

Mandatory benefits payments
Colombia payroll also includes the administration of mandatory benefits known as prestaciones sociales. These are not paid monthly but must be accrued and paid at specific times during the year. They include prima de servicios (service bonus paid in June and December), cesantías (deposited annually into the employee’s authorised severance fund within the statutory deadline), interest on cesantías (paid directly to the employee in accordance with the applicable legal deadline), and vacation pay (accrued at 15 working days per year of service).

Transport subsidy
Employees earning up to the applicable statutory salary threshold are entitled to a monthly transport subsidy. The amount is updated periodically by the Colombian Government, and employers should apply the rate in force for the relevant payroll year.

Payroll records
Employers must maintain accurate payroll records for all employees and make them available to the Ministry of Labour or other competent authorities where required by law.Records must document salary payments, social security contributions, tax withholdings, and benefits payments.

What are the steps to set up payroll in Colombia?

Setting up payroll in Colombia requires completing several registrations and administrative steps before you can pay your first employee. Here is the process from start to finish.

Step 1. Register a legal entity or engage an EOR
To run payroll in Colombia directly, you need a registered legal entity, typically a Sociedad por Acciones Simplificada (SAS). This involves registering with the Chamber of Commerce, obtaining a tax ID (NIT) from DIAN, and opening a corporate bank account. If you do not want to set up an entity, you can use an employer of record (EOR) in Colombia, which handles payroll and employment administration on your behalf without requiring you to incorporate locally.

Step 2. Register with DIAN
Your company must register with Colombia’s tax authority (DIAN) to obtain a RUT (Registro Único Tributario) and NIT (Número de Identificación Tributaria). These are required for tax filings and payroll tax withholding.

Step 3. Register with the PILA platform
PILA is the government’s unified payroll contribution platform. All employers must register and use PILA to submit monthly social security contributions covering health (EPS), pension (AFP), workplace risk insurance (ARL), and family compensation fund (CCF) payments.

Step 4. Enrol employees in the social security system
Each employee in Colombia must be registered with their chosen health insurer (EPS), pension fund administrator (AFP), and workplace risk insurer (ARL). Employees can choose their own EPS and AFP from the authorised providers. The ARL is selected by the employer based on the risk classification of the work.

Step 5. Register with a Caja de Compensación Familiar
Employers must affiliate with a family compensation fund (Caja de Compensación Familiar) where required under Colombian social security legislation. These funds administer a range of social programs and benefits for employees, funded by a 4% employer contribution on payroll.

Step 6. Set up your payroll system
Configure your payroll system to calculate gross pay, withhold income tax whereapplicable, deduct employee social security contributions, and accrue mandatory benefits including prima de servicios, cesantías, and vacation pay. The system must handle either monthly or bi-weekly pay cycles and should be updated whenever statutory payroll rules change.

Step 7. Process and pay each cycle
Run payroll on the agreed cycle, release salary payments to employees’ bank accounts, and submit PILA contributions within the monthly deadlines. Keep full payroll records for compliance purposes.

For international companies, this process is time-consuming and requires ongoing attention to regulatory changes. Most companies expanding into Colombia choose to outsource payroll to a specialist provider or use an EOR to handle the employment administration and payroll compliance obligations.

Can you run payroll in Colombia without a local entity?

Yes. You can run payroll in Colombia without setting up a local legal entity by using an employer of record (EOR).

An EOR in Colombia acts as the legal employer and manages payroll, tax withholding, social security contributions, mandatory benefits, and employment compliance on your behalf.

This option is often used by companies that want to hire employees in Colombia without going through the process of establishing a local entity and managing payroll administration themselves.

With an EOR, the client generally does not need to establish its own employing entity for the relevant workforce. The EOR’s existing legal infrastructure in Colombia covers your employees from day one. You agree on the salary and terms with your employee, and the EOR handles employment administration, from drafting the contract in Spanish and registering the employee with EPS, AFP, ARL, and CCF to processing payroll in Colombian Pesos (COP), and remitting applicable statutory contributions and taxes in accordance with Colombian legal requirements.

This approach is particularly useful for companies that are:

Entering the Colombian market for the first time and want to move quickly.

Hiring a small number of employees and cannot justify the cost of entity setup.

Building a global team across multiple countries and want a single payroll partner.

Testing the Colombian market before committing to a permanent local presence.

The EOR model is fully compliant with Colombian labour law. Your employees receive the same statutory entitlements such as minimum wage, social security, mandatory benefits, and paid leave as they would under any other employment arrangement.

Why should businesses outsource payroll in Colombia?

Colombia payroll is one of the more complex payroll environments in Latin America. The combination of mandatory benefits, social security contributions, tax withholding obligations, and regular legislative updates creates a significant administrative burden for companies that manage it in-house.

Here’s why outsourcing payroll in Colombia is a practical decision for most international businesses.

Compliance is not optional
Colombian labour law sets strict deadlines for PILA contributions, income tax withholding, cesantías deposits, and prima de servicios payments. Missing these deadlines, even by a few days, can result in fines, interest charges, and scrutiny from the Ministry of Labour. A specialist payroll provider tracks these deadlines and ensures every payment is made on time.

The rules change regularly
The minimum wage in Colombia is updated every January by government decree. The working week is being reduced in stages under Law 2101.Employers should also monitor any subsequent labour reforms affecting payroll obligations, statutory benefits, or working time requirements.. Keeping up with these changes while running a business in another country is genuinely difficult. An outsourced payroll provider absorbs that monitoring work on your behalf.

In-house expertise is expensive to build
Hiring a Colombian HR and payroll specialist, keeping them current on local law, and maintaining the systems and registrations needed to run payroll compliantly is a significant investment. For companies with a small team in Colombia, outsourcing is far more cost-effective.

Errors are costly
Payroll errors in Colombia can trigger employee disputes, back-pay claims, and regulatory penalties. A reliable payroll provider reduces the risk of calculation errors, missed contributions, and incorrect tax withholdings.

It frees your team to focus on growth
Every hour your team spends on payroll administration is an hour not spent on building the business. Outsourcing payroll in Colombia reduces the administrative burden associated with payroll processing and statutory compliance.

It scales with you
Whether you are paying one employee or one hundred, an outsourced payroll provider handles the same process at any volume. As your Colombian team grows, your payroll scales with it without requiring additional internal headcount.

What is the cost of payroll administration in Colombia?

The cost of running payroll in Colombia has two components: the statutory employer costs that apply to every hire, and the administrative or service fees charged by a payroll provider or EOR.

Statutory employer costs
On top of every employee’s gross salary, employers in Colombia must pay the following mandatory contributions:

Health insurance (EPS):Generally, 8.5% of the applicable contribution base, subject to any exemptions available under Colombian law.

Pension fund (AFP): 12% of gross salary (employer share).

Workplace risk insurance (ARL): between 0.522% and 6.96% of gross salary, depending on the risk classification of the role.

Family compensation fund (CCF): 4% of gross salary.

SENA (National Learning Service): 2% of gross salary.

ICBF (Colombian Institute of Family Welfare): 3% of gross salary.

In addition to these monthly contributions, employers must fund mandatory benefits (prestaciones sociales) throughout the year:

Prima de servicios: approximately 8.33% of annual salary, paid in two instalments in June and December.

Cesantías: approximately 8.33% of annual salary, deposited into the employee’s authorised severance fund by the applicable statutory deadline.

Cesantías interest: 12% of the cesantías balance, paid to the employee within the statutory deadline. Employers should verify any legislative reforms affecting the timing or method of payment before implementation.

Vacation pay: 15 days of paid leave per year of service, equivalent to approximately 4.17% of annual salary.

Transport subsidy: Applicable to employees meeting the statutory eligibility threshold. The amount is updated annually by the Colombian Government.

When you add all statutory contributions and mandatory benefits together, the total employer cost in Colombia typically runs approximately 35% to 45% above the gross salary.

Payroll service fees
If you outsource payroll in Colombia to a provider or use an EOR, you will also pay a service fee. These fees vary by provider and scope of service and should be agreed contractually. Pricing depends on the services included and the provider’s commercial model.

What taxes and contributions must employers pay on payroll in Colombia?

Employers running payroll in Colombia are responsible for a range of statutory contributions and tax obligations. Here is a complete breakdown.

Social security contributions (paid via PILA):

Contribution	Employer Rate	Employee Rate	Total
Health (EPS)	Generally, 8.5%, subject to applicable exemptions	4%	12.5%
Pension (AFP)	12%	4%	16%
Workplace risk (ARL)	0.522% – 6.96%	0%	0.522% – 6.96%

Parafiscal contributions (employer only):

Contribution	Employer Rate
Family compensation fund (CCF)	4%
SENA (National Learning Service)	2%
ICBF (Family Welfare Institute)	3%

Certain employers may qualify for exemptions from specific employer contributions under Article 114-1 of the Colombian Tax Code, provided the statutory conditions are satisfied. Employers should assess eligibility on a case-by-case basis.

Income tax withholding (retención en la fuente)
Employers in Colombia must withhold income tax from each employee’s monthly salary where the employee’s remuneration exceeds the applicable withholding thresholds. The amount withheld is calculated using the tax tables published annually by DIAN, based on the employee’s monthly earnings expressed in UVT (Unidad de Valor Tributario). Employees earning below the threshold are not subject to withholding.

Mandatory benefits (prestaciones sociales)
While these are not taxes, they represent additional employer obligations that must be funded through payroll:

Prima de servicios: 8.33% of annual salary.

Cesantías: 8.33% of annual salary.

Cesantías interest: 12% of the cesantías balance.

Vacation pay: equivalent to 15 days per year of service.

All social security contributions must be submitted monthly through the PILA platform within the deadlines established by the government. Late payments attract interest and potential fines.

What are the mandatory employee benefits in Colombia?

Colombian labour law sets out a list of mandatory employee benefits that every employer must provide, regardless of company size or industry. Here is what every employee in Colombia is legally entitled to.

Minimum wage
Every employee must be paid at least the national minimum wage, which is reviewed annually by the Colombian Government. Employers should apply the rate in force for the relevant year.

Transport subsidy
In Colombia, employees earning up to the applicable statutory salary threshold are entitled to a monthly transport subsidy. The subsidy amount is updated annually by the Government and should be verified each year.

Prima de servicios (service bonus)
Employees in Colombia are entitled to a mandatory service bonus equivalent to 30 days of salary per year, paid in two equal instalments: one by the end of June and one within the statutory December payment period.

Cesantías (severance fund)
Employers must deposit the equivalent of one month’s salary per year of service into the employee’s individual severance fund account, held by an authorised severance fund administrator. The deposit must be made by the statutory deadline each year.

Cesantías interest
On top of the cesantías deposit, employers must pay the employee 12% annual interest on the balance. This is paid directly to the employee by within the applicable statutory deadline. Employers should verify any legislative amendments affecting the payment mechanism before adopting alternative arrangements.

Paid vacation
Employees in Colombia are entitled to 15 paid working days of vacation per year of continuous service. Vacation accrues from the first day of employment and generally becomes available after completing one year of service, subject to the applicable Labour Code provisions.

Public holidays
Colombia observes 18 public holidays in 2026. Employees are entitled to paid leave on these days. Work performed on public holidays must be compensated at 175% of the regular rate.

Social security
All employees in Colombia must be enrolled in the health system (EPS), pension system (AFP), workplace risk insurance (ARL), and family compensation fund (CCF). Contributions are split between employer and employee as set out in the PILA contribution rates.

Maternity and paternity leave
Female employees in Colombia are entitled to the statutory period of paid maternity leave in force under Colombian law. Male employees are entitled to the statutory period of paid paternity leave applicable at the time of birth or adoption. Employers should verify the current statutory entitlements, as these may change following legislative reforms.

What is the minimum wage in Colombia?

The minimum wage in Colombia is set by government decree each year and applies to all employees across the country, regardless of industry, region, or company size, unless a specific statutory exception applies.

Minimum wage in Colombia

Component	Monthly Amount (COP)
Minimum monthly salary	COP 1,423,500
Monthly transport subsidy	COP 200,000
Total mandatory minimum compensation	COP 1,623,500

The transport subsidy applies to employees earning up to two times the minimum wage. It is paid on top of the salary and must be included in payroll calculations each month.

The minimum wage in Colombia is reviewed annually, typically announced by the government in December and effective from 1 January of the following year. Employers must apply the updated rate from the first day of each new calendar year. Failure to pay at least the statutory minimum wage can result in labour sanctions and fines from the Ministry of Labour.

International and multinational companies operating in Colombia generally pay above the legal minimum, particularly for professional, technical, or specialist roles. The minimum wage serves as the legal floor, not a benchmark for competitive hiring. For roles requiring specific qualifications or experience, salaries are typically set based on local market rates, which vary significantly by city, sector, and seniority.

It is also worth noting that the minimum wage in Colombia is used as a reference point across the labour law framework. Contribution thresholds, overtime eligibility, transport subsidy entitlement, and severance calculations all reference the SMMLV (Salario Mínimo Mensual Legal Vigente), so understanding the current figure is important for anyone managing payroll in Colombia.

How is the basic salary different from the gross salary in Colombia?

The basic salary (salario básico) is the fixed monthly salary stated in the employment contract. The gross salary (salario bruto) is the employee’s total earnings before deductions, including the basic salary plus overtime, commissions, shift premiums, and other salary-based remuneration.

For example, if an employee has a basic salary of COP 3,000,000 and earns COP 500,000 in commissions, their gross salary for that month is COP 3,500,000.

What is basic salary in Colombia?

The basic salary is the agreed monthly compensation specified in the employment contract. It forms the foundation of an employee’s pay and must be at least equal to Colombia’s minimum wage.

What is gross salary in Colombia?

Gross salary is the total amount earned before deductions. It may include:

Basic salary.

Overtime pay.

Commissions.

Regular bonuses that qualify as salary.

Night shift surcharges.

Sunday and public holiday premiums.

Any other remuneration that legally constitutes salary under Colombian labour law.

Why is the difference important?

In Colombia, social security contributions, mandatory benefits, and payroll tax calculations are generally based on payments that constitute salary for legal purposes, not simply the employee’s contractual basic salary.

This means that regular overtime, commissions, and other salary payments can increase the amount used to calculate:

Health contributions.

Pension contributions.

Prima de servicios.

Cesantías.

Vacation pay.

Other statutory employment benefits where applicable.

Are all payments included in gross salary?

No. Certain payments can be classified as non-salary payments (pagos no constitutivos de salario) under Colombian law. This may include expense reimbursement, certain bonuses, and specific benefits in kind.

Whether a payment qualifies as non-salary remuneration depends on the nature of the payment, the parties’ agreement, and the mandatory provisions of Colombian labour law. Simply labelling a payment as “non-salary” does not automatically exclude it from the statutory calculation base. When properly documented and legally structured, these payments may be excluded from the calculation base for social security contributions and mandatory benefits.

What makes CXC a reliable partner for payroll and benefits management in Colombia?

CXC helps companies manage payroll and benefits in Colombia by combining local payroll expertise, compliance support, and in-country knowledge. We help employers navigate Colombian payroll requirements, including PILA reporting, social security contributions, income tax withholding, mandatory benefits administration, and labour law compliance.

Companies choose CXC because payroll in Colombia involves ongoing regulatory requirements, annual minimum wage updates, statutory benefit calculations, and strict reporting obligations. Our team helps ensure employees are paid accurately and on time while reducing compliance risk for employers.

Over 30 years of payroll and workforce experience
CXC has been managing payroll and employee benefits across global markets since 1992. That track record means the processes, controls, and local expertise needed to run compliant Colombia payroll are already in place; you do not have to build them from scratch.

Full payroll processing in Colombian Pesos
CXC processes payroll in COP on either a monthly or bi-weekly cycle, depending on what is agreed in the employment contract. Every calculation is handled accurately and on time.

PILA submissions managed on your behalf
Monthly PILA contributions covering health (EPS), pension (AFP), workplace risk insurance (ARL), and family compensation fund (CCF) must be submitted within government deadlines. CXC manages these submissions for every employee, ensuring no missed payments or late filing penalties.

Mandatory benefits administered correctly.
Colombia’s mandatory employee benefits each have specific calculation rules and payment deadlines. CXC accrues and administers all of these on your behalf, including applying the updated rules

Non-salary payment structuring
CXC advises on how to structure compensation packages in Colombia, including which payments can be classified as non-salary components (pagos no constitutivos de salario) under Colombian law. The classification of each payment depends on the applicable legal requirements and should be assessed individually. Structuring remuneration appropriately may help optimise payroll costs while maintaining compliance with Colombian labour legislation.

No local entity required
Through CXC’s EOR solution, you can run fully compliant payroll in Colombia without incorporating a local company, opening a Colombian bank account, or building an in-house HR function. CXC’s locally registered entity in Colombia covers all employer obligations from day one.

Coverage across more than 100 countries.
If your team spans multiple markets, CXC provides consistent payroll and benefits management across more than 100 countries through a single partner. This simplifies vendor management, consolidates reporting, and gives you one point of contact for all your global payroll needs.

A compliance-first approach to every engagement
CXC’s core focus is keeping companies compliant as they hire and pay workers internationally. That means proactive monitoring of regulatory changes, accurate record-keeping for Ministry of Labour inspections, and clear documentation of every payroll decision – so if a question ever arises, you have the evidence to back it up.

Compliantly hire employees anywhere with CXC

With our EoR solution, you can engage workers anywhere in the world, without putting your business at risk. No more worrying about local labour laws, tax legislation or payroll customs — we’ve got you covered.

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