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Global Payroll Team
Written by Global Payroll Team
Last updated May 1, 2026
Expert Reviewed
Payroll in Colombia
Colombia EOR
Colombia PEO

Colombia map

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Mercans offers complete payroll, PEO and HR services in Colombia

Colombia remains one of the leading economies in Latin America and stands out for its macroeconomic strength, legal framework for investment and broad network of trade agreements. Key sectors include mining, oil and gas, agribusiness, manufacturing, logistics, technology and business services.

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Doing Business in Colombia

Companies doing business in Colombia may benefit from a range of investment incentives, including free trade zones, customs and VAT incentives for certain projects, and benefits available to specific sectors. Businesses should also assess labor, tax, immigration and corporate compliance requirements carefully before entering the market.

Entity Registration and Incorporation Requirements

Setting up a new business or expanding an existing one in Colombia is straightforward. Choose how your company operates from a range of entity types which suit your individual circumstance.

Banking

Banking Hours: Monday to Friday from 8:00 am – 4:30 pm

Working Week

The ordinary maximum working week in Colombia is 42 hours, usually distributed from Monday to Friday or across flexible work schedules.

Labor Law

All employment contracts are governed by Colombian labor law, regardless of the parties’ nationalities. Employment relationships are regulated mainly by the Colombian Labor Code, and employers hiring foreign nationals must also comply with immigration reporting requirements.

Main Industries

Mining, oil and gas, agribusiness, textiles and clothing, food processing, logistics, technology and business services

GDP Growth

2.6%

Dates & Numbers

dd/mm/yyyy

Official State Name

Republic of Colombia

Population

53.06 million

Capital

Bogotá

Major Languages

Spanish

Currency

Colombian Peso (COP)

Internet Domain

.co

International Dialing Code

+57

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Colombia
Bogota, CO
2:12 pm, May 3, 2026
15°C
broken clouds
77 %
Wind Gust: 0 mph
Clouds: 75%
Sunrise: 5:44 am
Sunset: 6:01 pm

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Payroll in Colombia

Mercans offers reliable and streamlined payroll solutions for businesses operating in Colombia. You can rely on our Colombia payroll team for end-to-end payroll services. Our end-to-end payroll in Colombia processing services will take care of all aspects of payroll processing so you can focus on more important tasks.

Bringing experience and advanced technology to the table, we offer superior payroll services in Colombia and around the world. Thus, making us one of the leading payroll companies in Colombia. One of the largest companies in this field, we offer a wide range of industry-leading payroll solutions and look after your payroll needs as your dedicated payroll provider.

Our payroll services make life easier for you by simplifying complicated and time-consuming processes such as payroll calculation, statutory reporting, social security administration and payroll compliance. You can count on our experts to provide you with real-time payroll assistance at all times.

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Payroll

Companies who maintain a presence in many countries and which operate a multi-country payroll should take note that Colombia’s monthly legal minimum wage is established every year by the national government.

It is acceptable to provide employees with online payslips.

Payslip

Payroll reports should be kept in line with Colombian labor, tax and social security recordkeeping requirements.

Reports

15 working days of paid leave after each year of service.

Annual Leave

Employees are generally entitled to paid sick leave, with the employer covering the first 2 days at two-thirds of salary and the EPS generally paying from day 3 onward under applicable rules.

Sick Leave

18 weeks of paid maternity leave and 2 weeks of paid paternity leave.

Maternity & Paternity Leave

There is generally no mandatory notice for indefinite-term dismissal without cause, but fixed-term contracts usually require 30 days’ notice for non-renewal.

Employee Termination

The service bonus is generally equal to 30 days of salary per year and is paid in two instalments, by June 30 and within the first 20 days of December.

13th month salary

1,746,882 COP per month

Minimum Wage

Night work between 7 pm and 6 am carries a 35% surcharge, and overtime premiums also apply where applicable.

Overtime

Cesantías generally equal 30 days of salary for each year of service, or proportionally for a fraction of a year.

Severance Pay

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Employer of Record (EOR) in Colombia

Mercans is a premier Employer of Record (EOR) provider in Colombia, offering streamlined solutions for businesses to hire top talent without establishing a local legal entity. Partnering with Mercans ensures compliance with local labor laws and efficient management of payroll and employee benefits.

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Social Security Contributions and Tax Deductions

Employer of Record in Colombia ensures social security contributions and personal income taxes are deducted and paid to the local authorities.

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Work Permits and Employee Management

Mercans provides comprehensive support in obtaining work permits and managing the onboarding and offboarding processes for remote employees, ensuring a seamless experience for your workforce.

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Expand Internationally with EOR

Our employer of record services will enable you to reach new markets faster and remain competitive in the market.

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Payroll and Benefits with EOR Expertise

With us as your dedicated EOR provider in Colombia, you can be assured of compliant contracts, payroll management, and benefits administration.

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PEO Colombia

Mercans’ is a leading Professional Employer Organization (PEO) in Colombia. PEO services in Colombia provide businesses with a hassle-free and cost-effective way to expand their operations and manage their employees. Through our PEO in Colombia, we manage all HR-related matters in Colombia, including employment, payroll, benefits, and compliance. For successful business growth in Colombia and other parts of the world, Mercans is your go-to partner with deep knowledge of the Colombian market and a dedicated team of experts. For a successful and hassle-free expansion, choose Mercans.

Partnering with our Colombia PEO offers the fastest and most cost-effective way to enter the Colombian market.
Contact us to discover how we can support your growth in Colombia.

Benefits of Hiring an Employee through a Colombia PEO

Efficient Payroll Processing and Tax Filing

Mercans’ PEO services streamline payroll and tax filing with in-country legal expertise. We ensure strict compliance with local labor laws, covering compensation standards, taxation legislation, and benefits administration, making these processes more efficient for our clients.

Administer Competitive Benefits

Beyond statutory benefits, Mercans helps you develop appealing supplementary benefits to attract top talent. Our in-country knowledge enables us to find the perfect candidates and offer benefits that align with local work culture and expectations.

Mitigate Risks

Mercans’ PEO services ensure your HR functions adhere to Colombia’s labor laws, safeguarding you from potential penalties and fines. Compliance with local legislation significantly mitigates risks associated with noncompliance.

Ensure Compliance with Local Labor Laws

Our PEO services guarantee adherence to Colombia’s detailed labor laws, from onboarding to payment and complex issues like intellectual property protections. We manage these mandatory guidelines meticulously, so you don’t have to.

Reduce Employee Costs

Mercans’ PEO services help mitigate and control overhead costs associated with compliance, payroll, and benefits. We provide a cost-effective solution for expanding your remote hiring to international markets.

Partner with Mercans Today

Take the hassle out of managing HR functions and ensure compliance with local laws by partnering with Mercans’ PEO services. Let us support your growth in Colombia and beyond with our expertise and comprehensive solutions. Contact us now to get started and experience seamless business expansion.

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Tax and Social Security

There are no local or municipal taxes on individual employment income in Colombia, but national income tax applies. Employees whose contracts are governed by Colombian labor law must generally be affiliated with the social security system, including pension, health and occupational risk coverage.

Tax

Employment income, capital income and non-employment income are generally included in the Colombian income tax system. Colombia applies a general corporate income tax rate of 35%, while personal income tax is progressive and may reach 39%. The general VAT rate is 19%.

35%

Corporate Income Tax

39%

Personal Income Tax

19%

Sales Tax

19%

VAT

Social Security

Employers are generally required to make contributions for health, pension and occupational risks, and may also need to pay parafiscal contributions depending on the employer profile. Employees generally contribute 4% to health and 4% to pension, while employer rates vary depending on occupational risk and applicable exemptions.

24.5%+

Social Security Rate

16.5%+

Social Security Rate for Employers

8.0%

Social Security Rate for Employees

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Employment Law

Colombian labor law recognizes several forms of employment contract, including indefinite-term, fixed-term, work or labor contracts, and occasional arrangements. Employers must also comply with current rules on remote work, work from home and reduced working time.

Employment Agreement

Recent regulations take into account changes introduced for work from home, remote work and the progressive reduction of the working week. Employers should document employment terms carefully and ensure compliance with current labor formalities and reporting rules.

Working condition

Colombian labor law sets the maximum ordinary working hours, while still allowing flexible working schedules that adapt to operational and employee needs. Equal opportunities are guaranteed for both national and foreign workers.

Leaves

Sundays and national holidays are mandatory rest periods and public holiday entitlements are in addition to annual leave. Bereavement leave is generally five business days.

Employment termination

Either party can terminate the labor agreement in accordance with Colombian law. Notice and indemnity rules depend on the contract type and termination ground, and compensation may apply where there is termination without just cause.

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30 days

Minimum notice period for terminating an employee

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18

Total number of Public Holidays

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42

Working hours per week

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5 days

Total number of days for Compassionate & Bereavement Leave

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Immigration

Colombia offers several visa options for foreign nationals, including work-authorized migrant visas for employees and contractors. Employers hiring foreign nationals must also comply with reporting requirements and other immigration formalities.

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Residency permits

The Migrant Worker visa is one of the main work-authorized routes in Colombia and is generally granted for up to three years. Colombia’s Ministry of Foreign Affairs may revise visa rules and documentary requirements from time to time.

Work Permit validity

Up to 3 years

Required Documents

Valid passport with sufficient remaining validity

Copy of the passport biographical page and latest Colombian entry stamp or prior visa where applicable

Employment contract or service contract with the Colombian employer or contractor

Supporting employer documents, including corporate identification and legal representation details

Evidence of the qualifications or experience required for the role where applicable

Any additional supporting documents requested by the Ministry of Foreign Affairs for the specific visa category

Compliant, reliable, error-free and touchless payroll in Colombia

Build the best team and hire top talent compliantly in Colombia. Get in touch with Colombia payroll outsourcing & PEO specialists for a free consultation!

This document was prepared for informational purposes only. As local laws & regulations keeps on changing. Please consult your tax & legal advisors as well.
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    FAQs

    What is an Employer of Record (EOR) in Colombia and how does it support foreign companies?

    An Employer of Record (EOR) in Colombia legally employs staff on behalf of foreign companies. It manages employment contracts, payroll, taxes, social security, and compliance with local labor laws, allowing companies to hire employees quickly without establishing a local legal entity.

    Why should businesses use an EOR instead of setting up a legal entity in Colombia?

    Using an EOR avoids the time and costs of setting up a local company. It provides fast market entry, reduces administrative work, ensures legal and tax compliance, and is ideal for businesses testing the Colombian market or hiring a small team.

    How does payroll outsourcing in Colombia help with compliance and local tax regulations?

    Payroll outsourcing ensures accurate salary processing, tax filings, and social security contributions according to Colombian law. It reduces compliance risks, avoids penalties, and provides expertise on local labor and tax regulations.

    Can an Employer of Record in Colombia hire employees and manage work permits for international companies?

    Yes, an EOR can legally hire employees for foreign companies and manage work permits. It handles HR operations, payroll, and compliance with local labor and immigration laws, enabling smooth operations without a local entity.

    What are the key benefits of using EOR and payroll services in Colombia for global expansion?

    EOR and payroll services enable faster hiring, local compliance, reduced legal and financial risk, and access to market expertise. They allow companies to expand into Colombia efficiently while focusing on business growth.

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