Labor Law Compliance Guide for Colombia

This labor law guide for Colombia has important information for businesses looking to hire employees or contractors in the country. Colombia is a country in South America. As of 2025, Colombia’s nominal GDP stands at approximately USD $438 billion, with real GDP growth of 2.5% in 2025 and a forecast of 2.3% for 2026. Key sectors driving the economy include oil and mining, agriculture, manufacturing, and finance. The country is also becoming a hub for technology and IT services, which are significantly contributing to its economic output. Colombia's growing nearshore BPO operations and call center industry makes it an attractive destination for US and European companies looking to outsource customer support. Colombia enacted its most comprehensive labor reform in decades with Law 2466 of 2025, which introduces progressive working-hour reductions, updated overtime rules, and stronger worker protections. The country’s currency is the Colombian Peso (COP).

Category	Details
Minimum Wage (SMLMV)	COP $1,750,905 per month (2026)
Transport Allowance	COP $249,095 per month
Total Effective Minimum Income	COP $2,000,000 per month
Overtime Wage (Day)	125% of regular hourly rate
Overtime Wage (Night)	175% of regular hourly rate
Sunday/Holiday Surcharge	190% (from Jul 2026), rising to 200% (Jul 2027)
Night Shift Surcharge	135% of regular salary (hours from 7 PM to 6 AM)
Working Hours	44 hours/week (Jul 2025), reducing to 42 hours/week (Jul 15, 2026)
Salary Payment Cycle	Monthly
Payroll Taxes	Approximately 30-36% of salary (varies by ARL risk class)
Paid Vacation	15 days per year
Overtime Limit	Max 2 hours/day, 12 hours/week
Holidays	18 days per year

Hiring Laws in Colombia

When hiring in Colombia, businesses must register as a local entity.

Setting up a business entity may take between 1-6 weeks and can have associated costs ranging from COP $1,000,000 to COP $3,000,000 depending on the complexity.

Employers must sign written employment contracts with their employees that detail compensation, job specifics, work hours, and termination clauses. Under Law 2466 of 2025, indefinite-term contracts are now the default contract type. Fixed-term and project-based contracts are limited to strict conditions and a maximum of 4 years. Employment relationships and independent contractor agreements are treated separately under Colombian labor laws. Independent contractors are not entitled to the same rights and benefits as employees.

Minimum Wages in Colombia

Colombia enforces a national minimum wage (SMLMV) which is set at COP $1,750,905 per month for 2026, plus a transportation allowance (auxilio de transporte) of COP $249,095, bringing the total effective minimum income to COP $2,000,000. This was set by Decrees 1469 and 1470 of 2025, representing a 9.53% increase over 2025. The rate applies uniformly across all sectors.

There are no exceptions to the minimum wage rate except for certain internships or apprenticeships which may have lower remuneration. Employers are required to pay additional wages for holidays worked at the applicable surcharge rate.

Working Hours in Colombia

Colombia is progressively reducing its standard workweek under Law 2466 of 2025 (originally initiated by Law 2101 of 2021):

• 46 hours/week (from Jul 15, 2024)
• 44 hours/week (from Jul 15, 2025)
• 42 hours/week (from Jul 15, 2026)

Wage reductions are prohibited despite the fewer hours. Hours beyond the weekly threshold are considered overtime, subject to the following surcharges:

Type of Work	Surcharge
Daytime overtime	+25% of regular hourly rate
Nighttime overtime	+75% of regular hourly rate
Night shift surcharge	+35% of regular hourly rate
Sunday/holiday work	+80% (2025), +90% (Jul 2026), +100% (Jul 2027)
Sunday/holiday night work	+110% (combined)

Maximum overtime is 2 hours per day and 12 hours per week. Ministry of Labour authorization is no longer required for overtime under Law 2466.

Night work is now defined as 7:00 PM to 6:00 AM (changed from 9:00 PM, effective Dec 25, 2025). The minimum age for employment is 15, with strict regulations against child labor.

Payroll and Taxes in Colombia

Social Security Contributions

Contribution	Employer	Employee	Total
Health (EPS)	8.5%	4%	12.5%
Pension	12%	4%	16%
ARL (occupational risk)	0.522% - 6.96%	--	Varies by risk class

Parafiscal Contributions (Employer Only)

Entity	Rate
Caja de Compensacion Familiar	4%
ICBF (child welfare)	3%
SENA (training)	2%
Total parafiscal	9%

All contributions are paid monthly via the PILA system. Total employer cost above salary is roughly 30-36% depending on ARL risk classification.

Personal Income Tax Rates (Residents)

The UVT (Unidad de Valor Tributario) for 2026 is COP $52,374.

Taxable Income (UVT)	Approx. COP (2025 UVT)	Marginal Rate
0 - 1,090	0 - 54.3M	0%
1,090 - 1,700	54.3M - 84.7M	19%
1,700 - 4,100	84.7M - 204.2M	28%
4,100 - 8,670	204.2M - 431.6M	33%
8,670 - 18,970	431.6M - 944.7M	35%
18,970 - 31,000	944.7M - 1,543.8M	37%
Over 31,000	Over 1,543.8M	39%

Non-residents are taxed at a flat 35% rate.

Statutory Leave Policies in Colombia

Employers in Colombia must provide various leaves:

• Paid Vacation: 15 days per year, eligible after one year of service
• Maternity Leave: 18 weeks, fully paid
• Paternity Leave: 2 weeks, fully paid
• Sick Leave: Up to 180 days, with varying amounts of pay based on duration and doctor certification
• Adoption Leave: Similar to maternity leave

Following is the list of public holidays in Colombia for 2026 (18 total):

Holiday	2026 Date
New Year’s Day	January 1 (Thu)
Epiphany (Dia de los Reyes Magos)	January 12 (Mon)*
Saint Joseph’s Day (Dia de San Jose)	March 23 (Mon)*
Holy Thursday (Jueves Santo)	April 2 (Thu)
Good Friday (Viernes Santo)	April 3 (Fri)
Labour Day (Dia del Trabajo)	May 1 (Fri)
Ascension of Jesus	May 18 (Mon)*
Corpus Christi	June 8 (Mon)*
Sacred Heart (Sagrado Corazon)	June 15 (Mon)*
Saints Peter and Paul	June 29 (Mon)*
Independence Day	July 20 (Mon)
Battle of Boyaca	August 7 (Fri)
Assumption of Mary	August 17 (Mon)*
Columbus Day / Dia de la Raza	October 12 (Mon)*
All Saints’ Day	November 2 (Mon)*
Independence of Cartagena	November 16 (Mon)*
Immaculate Conception	December 8 (Tue)
Christmas Day	December 25 (Fri)

*Dates marked with * are moved to Monday under the Ley Emiliani (Law 51 of 1983).

Employee Benefits in Colombia

Employers must provide various benefits:

• Social Security (healthcare, pensions, occupational risk insurance)
• Retirement Benefits through pension funds
• Mandatory severance payments (Cesantías)
• Annual bonuses (Primas) equal to one month’s salary
• Transport allowance (COP $249,095/month in 2026) if salary is below two minimum wages

Employee Termination in Colombia

Colombia does not follow At-Will Employment laws. Employment termination must follow

specific legal procedures:

• Notice Period: Generally 30 days
• Severance Pay: Varies by length of service
• Written notice stating the reason for termination
• Employees can challenge termination through labor courts
• Termination allowed for just cause, including gross misconduct, criminal activity, or constant underperformance.

Employers may face legal scrutiny if termination appears unjustified or discriminatory. Employers must ensure compliance with all procedural requirements to mitigate legal risks.