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Employer of Record Colombia
Hire staff and expand your business in Colombia with our fully-managed EOR Service
How we can help
Unrivalled Employer of Record Service in Colombia designed to expand your business seamlessly
Agility EOR delivers services for business’s looking for an Employer of Record in Colombia. We help clients hire new employees or transfer existing employees into a fully-managed EOR service.
We appreciate that each situation and business is different. That is why our personal approach to Employer of Record Services in Colombia takes care of all HR, payroll, recruitment and compliance head aches, and allows you to do what you love best – driving your business forward.
Employer of Record in Colombia
A Brief Guide to Colombia
Colombia is celebrated for its diverse topography, abundant coffee cultivation, and vibrant music and dance styles. From the high Andean peaks and expansive Amazon rainforest to Spanish-speaking locals and tantalizing Latin flavors, Colombia offers a captivating fusion of indigenous, Spanish, and Afro-Colombian influences. The nation functions as a unitary, constitutional republic with a strong democratic tradition, acknowledged by numerous international entities like the United Nations and the Organization of American States.
Category | Information |
Location | South America |
Capital | Bogotá |
Official Language | Spanish |
Area | 1,141,748 square kilometers |
Population | Approximately 51 million |
Currency | Colombian Peso (COP) |
Major Cities | Bogotá, Medellín, Cali, Barranquilla |
GDP (2023) | $330 billion USD |
Major Industries | Oil, mining, chemicals, textiles, clothing, food processing |
Business Culture
Business Culture in Colombia
Business encounters in Colombia generally carry a professional but sociable tone. Building trust is crucial, and it’s commonplace to enjoy small talk before shifting focus to business matters. Colombians appreciate politeness and respect, and while being on time is valued, locals might often arrive a bit behind schedule. Business cards are regularly shared during introductions, and a warm handshake accompanied by direct eye contact is the typical greeting.
Payroll and Taxes
Payroll and Taxes in Colombia
In Colombia, end-of-year bonuses, or “prima de servicios,” are prevalent.
Employee Taxation
In Colombia, income tax rates are progressive, with higher income levels subject to higher tax rates. Taxes are based on the tax unit (Unidad de Valor Tributario or TVU), with the value of the TVU being adjusted every year. For 2023 the value of the TVU is set at COP42,412.
Gross Annual Income (TVU) | Approx equivalent (USD) | Tax Rate (%) |
Up to 1,090 | Up to $10,200 | 0% |
1,091 – 1,700 | $10,200 – $15,900 | 19% |
1,701 – 4,100 | $15,900 – $38,300 | 28% |
4,101 – 8,670 | $38,300 – $80,900 | 33% |
8,671 – 18,970 | $80,900 – $177,000 | 35% |
18,971 – 31,000 | $177,000 – $289,200 | 37% |
31,000 + | $289,200 + | 39% |
Employer Taxation
Employers in Colombia are also responsible for various employer costs, which may include:
Cost Type | Percentage |
Pension Fund Contribution | 12% |
Healthcare Contribution | 8.5% |
Occupational Injury Contribution | 0.5% – 8.7% depending on risk level |
Additional Payroll Taxes | 4% – 9% depending on employee’s wages |
Pension and Healthcare
Colombia Pensions
Colombia’s pension system is a combination of a public pay-as-you-go system and private individual savings accounts. The public system, run by Colpensiones, provides pensions based on the average income over the last ten years of work. Private pension funds, managed by several approved financial institutions, work on a defined-contribution basis.
Contributions are a mandatory 16% of a worker’s salary, split between employers, (12%), and employees, (4%).
Healthcare in Colombia
Colombia’s healthcare system is considered one of the best in Latin America. It operates under a universal system, meaning all residents, including expatriates with a resident visa, have access to medical services.
The system consists of two sectors: ‘Contributory Regime’ for those who can afford to pay, and the ‘Subsidized Regime’ for low-income or unemployed individuals who can’t afford the payments. The services provided in both regimes are the same, but the contributory regime typically offers shorter wait times and access to private healthcare providers.
Healthcare facilities in Colombia are generally of a high standard, especially in urban areas. Many hospitals in major cities are technologically advanced, and numerous medical professionals have received training abroad. However, it’s worth noting that healthcare quality and accessibility can vary in rural areas.
Employment Law
Employment Law in Colombia
Relevant Legislation: The employment sector in Colombia is regulated mainly by the Substantive Labor Code and the Colombian Constitution. The Substantive Labor Code contains provisions related to employment contracts, working hours, leave, overtime, and termination, among others.
Employment Contracts:The Substantive Labor Code stipulates that employment contracts must be written, outlining essential details such as employment terms, working hours, wages, and termination provisions. While not all employment contracts are written, it’s usual for professional and long-term positions.
Working Hours: The standard work week in Colombia is 48 hours, typically over six days. For most jobs, the maximum working hours in a day should not exceed eight hours, though exceptions exist for certain industries.
Leave: Colombian employees are entitled to various types of leave. These include annual leave (which is 15 working days after one year of continuous employment), maternity leave of 14 weeks, paternity leave of 8 days, and sick leave.
Overtime: Work performed beyond the standard 48 hours per week is considered overtime. Overtime pay should be at least 1.25 times the regular wage for daytime work and 1.75 times for night time work.
Termination: Dismissal for reasons such as poor performance or misconduct must be justified, or it may result in legal consequences.
Notice: Notice before terminating an employment contract depends on the length of service. For employees who have worked for less than a year, one week’s notice is required; for a year or more, two weeks’ notice is required.
Severance Pay: If an employee is dismissed without just cause, they may be entitled to severance pay, depending on their length of service. Severance pay is typically a month’s salary for each year of service.
IMMIGRATION
Work Permits in Colombia
Colombia’s immigration system is overseen by Migración Colombia. The country offers various visa categories, tailored to individual needs such as employment, education, or family reunification.
Colombia offers several types of work permits for foreign nationals who wish to work in the country. The specific type of work permit required depends on the applicant’s qualifications, the nature of the job, and the intended duration of the stay. These include:
- Work Visa: Foreigners intending to work in Colombia must secure a work visa. This requires a confirmed job offer from a Colombian employer who will process the necessary paperwork, including filing an employment contract with the immigration authorities.
- Permanent Residence Visa: After five continuous years of residence in Colombia, individuals can apply for a permanent residence visa. They must demonstrate financial stability, either through employment, pension funds, or other financial resources.
- Family Reunification Visa: Foreign nationals with immediate family members (spouse, minor children, or parents) who are Colombian residents or citizens can apply for this visa. The Colombian family member must provide proof of their relationship and their ability to support the applicant.
- Student Visa: International students accepted into a Colombian educational institution can apply for a student visa. The duration of the visa usually matches the length of the study program. Student visas don’t automatically grant the holder permission to work in Colombia, but part-time work permissions may be sought.
Nationals from countries within the Andean Community (CAN), which Colombia is a part of, are allowed to enter, live, and work in Colombia under specific conditions.
Foreign residents planning to stay in Colombia for more than three months are required to apply for a Colombian Foreign ID Card, which serves as an identification card.
Public Holidays
Colombia Public Holidays
| Holiday Name | Date |
|---|---|
| New Year’s Day | 1st January |
| Saint Joseph’s Day | 19th March |
| Labor Day | 1st May |
| Independence Day | 20th July |
| Battle of Boyacá Day | 7th August |
| Immaculate Conception | 8th December |
| Christmas Day | 25th December |
Please note that Colombia observes numerous movable public holidays, primarily associated with Catholic traditions, such as Easter Monday, Ascension Day, Corpus Christi, and others.
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The Benefits
Colombia Employer of Record Benefits
When you choose Agility EOR to expand in Colombia, we guarantee an Employer of Record Service tailored to the needs of your business
Compliance
We are on top of regulatory changes in Colombia so you can relax.
Cost reduction
Allow our economies of scale to work in your favour.
High Service Levels
You and your employees have a dedicated account manager.
Fixed Cost Pricing
We will agree our professional fees up front based on your needs - no nasty surprises!
Consolidated Invoicing & Payments
Make one monthly payment to cover all your tax, social and wages costs from one to one thousand employees.
Fast delivery
You can have 'boots on the ground' within days on our infrastructure.
Reduced Risk
All wage taxes are remitted in full to the Colombian authorities by professionals ensuring liabilities are met, giving you peace of mind.
Supply Chain Transparency
We only pay employees through local full employed solutions meaning Colombia payroll tax is paid on all funds.
Save Time and Money
Our expertise is at your disposal. The need for you to have internal HR, Payroll and admin staff is eliminated.