EOR Service in Colombia

Hire, Onboard and Pay Employees in Colombia Quickly and Efficiently

Hiring in Colombia at a glance

CURRENCY
Colombian Peso (COP)
working hours
Typically 8 hours per day, 40 hours per week
public/bank holidays
Around 18 national holidays, including both fixed and movable dates
capital
Bogotá
language
Spanish
date format
DD/MM/YYYY
remote workers
1.2M
tax year
Calendar year (January to December)
minimum hourly salary
No minimum wage
CURRENCY
Colombian Peso (COP)
working hours
Typically 8 hours per day, 40 hours per week
public/bank holidays
Around 18 national holidays, including both fixed and movable dates
capital
Bogotá
language
Spanish
date format
DD/MM/YYYY
tax year
Calendar year (January to December)
payroll frequency
Monthly
GDP
$314.46B (2021 estimate)

Employer of Record in Colombia

Colombia’s diverse and proficient workforce make it an attractive proposition for enterprises that want to hire remotely. . The country's demographic characteristics, marked by a substantial segment of young individuals, combined with an education system that consistently produces top-tier graduates, contributes to a vibrant and thriving labor market.


Employers of Record (EORs) can be highly beneficial in the recruitment of skilled personnel within Colombia. EORs offer direction on employment agreements and guarantee adherence to regional labor regulations, safeguarding enterprises against legal risks. Collaborating with an EOR based in Colombia provides companies with the opportunity to leverage localHR expertise ,without adding significant expenses. .

Why use Colombia EOR?

Colombian labor laws tend to be more protective of employees than many economies in the West. There are strict regulations regarding wages, work hours, severance pay, notice periods, and the ability to terminate contracts. For example, non-compliant terminations can lead to penalties, unlike labor markets like the USA where employment relationships may begin and end on an “at-will" basis. Also, employers from employer-friendly countries such as the USA and UK must be aware that Colombian labor laws are heavily influenced by labor unions and collective bargaining in addition to the federal labor law. In contrast, unionization in countries  USA and the UK varies by industry and region.


By forging a partnership with a Colombian Employer of Record (EOR) or Professional Employer Organization (PEO), enterprises can stay compliant when hiring in Colombia - all at a cost-effective rate. EORs/PEOs help navigate the canopy of complex labor laws, mitigating employment risks and ensuring compliance with Collective Bargaining Agreements (CBAs). 

EOR Costs in Colombia

The cost of Columbia EOR/PEO services in  Columbia may differ based on various factors, such as the number of employees, the extent of services needed, and the project’s complexity. The pricing structure for Columbia EOR/PEO services usually involves a monthly fee per employee or a percentage of the employee's salary. Extra charges may apply for additional services or customization.

Key Metrics For Foreign Employers

The table below helps you reflect on metrics from the Global Talent Competitiveness Index to better hire in Colombia.

Factors Global Ranking Interpretation
Rule of law 95 Indicates effectiveness of law enforcement
Labour-employer cooperation 51 Indicates positive labor-employee relationships
Reading Maths, and Science 61 Indicates average scores in OECD's survey of 15-year old students
University Ranking 35 Indicates average QS rankings
Labour productivity per employee 68 Indicates total output by the total labour input used to produce that output
Ease of finding skilled employees 16 Indicates findability of skilled talent
Workforce with tertiary education 47 Indicates % of workforce with PG degrees
Digital Skills 36 Indicates prevalence of advanced digital skills in the population

Source: The Global Talent Competitiveness Index 2022

Through the Gloroots' Recrew platform, you can discover amazing talent in Colombia and grow your team effectively.

Why work in Colombia?

What’s a Rich Text element?

The rich text element allows you to create and format headings, paragraphs, blockquotes, images, and video all in one place instead of having to add and format them individually. Just double-click and easily create content.

Static and dynamic content editing

A rich text element can be used with static or dynamic content. For static content, just drop it into any page and begin editing. For dynamic content, add a rich text field to any collection and then connect a rich text element to that field in the settings panel. Voila!

How to customize formatting for each rich text

Headings, paragraphs, blockquotes, figures, images, and figure captions can all be styled after a class is added to the rich text element using the "When inside of" nested selector system.

Grow your team in Colombia

Employers in Colombia must have a local legal organization and utilize local resources to handle compliance, payroll, tax, and benefits management. The complexity of employment regulations in Colombia makes compliance with employment laws demanding.

With Gloroots' global Employer of Record (EoR) service, you can let Gloroots handle the heavy lifting of payroll, tax, benefits, and compliance, allowing you to concentrate on what matters most: your employees and company growth.

Risks of misclassification

The term "misclassification of employees" refers to the inaccurate classification of workers by their employers. Misclassification occurs when an employer categorizes a worker as an independent contractor or exempts them from certain employment laws and benefits, even if the worker should be classified as an employee and entitled to legal protections, benefits, and rights.

Utilizing a PEO/EOR in Colombia helps mitigate the risks associated with misclassification by ensuring compliance with labor laws, proper employee classification, accurate payroll processing, and access to comprehensive benefits. This lets businesses focus on their core operations while entrusting employment-related responsibilities to experienced professionals.

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Avoid hefty penalties with Gloroots.

Use our free employee misclassification risk calculator to estimate your risk level.

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Employing in Colombia

What’s a Rich Text element?

The rich text element allows you to create and format headings, paragraphs, blockquotes, images, and video all in one place instead of having to add and format them individually. Just double-click and easily create content.

Static and dynamic content editing

A rich text element can be used with static or dynamic content. For static content, just drop it into any page and begin editing. For dynamic content, add a rich text field to any collection and then connect a rich text element to that field in the settings panel. Voila!

How to customize formatting for each rich text

Headings, paragraphs, blockquotes, figures, images, and figure captions can all be styled after a class is added to the rich text element using the "When inside of" nested selector system.

Tax

Income Tax 

Colombia follows a progressive tax system; taxes increase with increase in income. Income tax for Colombian employees are measured in tax units.

Look at the table below for the varying rates of taxation.

Note: Tax Units (1 Tax Unit= 36,308 COP)

Income Range (in tax units) Tax Rate
up to 1,090 0 %
1,090 to 1,700 19 %
1,700 to 4,100 28% + 116 TVU
4,100 to 8,670 33% + 788 TVU
8,670 to 18,970 35% + 2,296 TVU
18,970 to 31,000 37% + 5,901 TVU
above 31,000 39% + 10,352 TVU

The Colombian government utilizes the term "TVU" as a tax unit for recalibrating tax limits. As of 2023, the TVU holds a monetary worth of COP 42,412.

Other Tax and Social Security contribution:

Tax Employer Contribution Employee Contribution
Corporate Tax 35%
VAT 19% (standard rate)
Social Security Employer Contribution Employee Contribution
Health Insurance 8.5% 4%
Pension Plan 12% 4%
Payroll Tax 4% or 8% (depending on employee's income level)
Professional Risk Coverage 0.348% - 8.7%
Solidarity Pension Fund Contribution 1% - 2% (only on income exceeding 16)

Note: Integrated salaries combine all components of an employee's compensation, including base salary, bonuses, allowances, and benefits, into a single amount. This simplifies the payroll process and provides employees with a clear understanding of their total earnings. Social Security contributions for integrated salaries are calculated based on 70% of the employee’s income.

Separation

Termination Process:

When either party unilaterally terminates an employment contract in Colombia, it is necessary to provide a written statement explaining the cause or motive behind the termination unless specific exceptions apply. The termination process must adhere to the regulations outlined in the employment contract law, salary law, and social security regulations. Employers must provide a valid and "fair" reason for terminating an employee to comply with legal requirements and avoid potential penalties and fines.

Notice Period:

The duration of the notice period in Colombia depends on the circumstances surrounding the termination:

Employment Type Notice Period Employee's Right to Respond
Misconduct Termination No notice required N/A
Fixed-Term Contract 30 days prior to end of contract N/A
Non-Fixed-Term (Poor Perform.) 15 days prior to dismissal 24 hours to contest the decision

Severance Pay:

Severance payments in Colombia are determined by several factors, including the nature of the termination, the employee's current salary, and the type of agreement:

  • For fixed-term agreements, the severance pay must cover the remaining salary owed to the employee until the end of the agreement.
  • In indefinite agreements, severance pay is calculated based on the employee's years of service and current salary.
  • Employees earning less than COP$9,085,260 (10 times the monthly minimum wage) receive 30 days' salary for the first year of employment and 20 days' salary for each additional year.
  • Employees earning more than 10 times the monthly minimum wage receive 20 days' salary after one year and 15 days' salary for each additional year with the company.

Start Hiring in Colombia today

Choose Gloroots as your Columbia Employer of Record for a seamless and efficient business expansion. With our expertise and experience in the local market, Gloroots ensures compliance with labor laws, handles administrative tasks, and provides local market insight. Streamlining operations, including payroll processing, tax compliance, and benefits administration, Gloroots allows you to focus on core business activities. Our comprehensive services minimize risks, maximize efficiency, and provide peace of mind. Trust the Gloroots team to navigate the complexities of the Columbian labor market, ensuring smooth operations and legal compliance, while you concentrate on growing your business.


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