Employer of Record in Colombia

How EOR hiring works in Colombia

To take advantage of one of LatAm’s fastest-growing hiring markets, international employers must establish a legal entity, but this can be time-consuming and costly.

If you want to test the market, hire a single employee or relocate your top talent, a better alternative exists: partner with an Employer of Record (EOR) provider, like Rivermate. We have our own entity and can hire Colombian employees on your behalf. We also handle all compliance in accordance with local employment laws, but you will still manage the employee’s day-to-day tasks.

Our EOR services are built on three pillars:

• Local HR experts who understand the market and employment laws.
• A partner network that allows us to provide competitive benefits.
• The Rivermate platform that simplifies every aspect of the employment relationship.

Colombian labor market: At a glance

The hiring market
Greatest hiring activity:	Bogotá, Medellín
Hiring timelines:	Locals: 5-9 days Foreign nationals: 2-4 months
In-demand sectors:	BPO, services, technology, finance, agriculture and mining
Sectors with skills shortages:	IT, Fintech, engineering, renewable energy

The salary market
Employer tax contributions:	Total above gross salary: 30% - 37%
Monthly minimum wage:	Wage: COP 1,750,905 (approx. $473) Transportation allowance: COP 249,095 (approx. $67)
Average annual salary:	COP 50 189 913
Income tax rates:	Residents: Progressive tax rate from 0% to 39% Non-residents: Flat rate of 35% on Colombian-sourced income

Hiring in Colombia: The true cost

Calculating the true cost of hiring in Colombia involves more than the base salary. An accurate reflection of total employment costs includes employer contributions and future financial liabilities such as severance pay. Below we discuss what it actually costs to hire in Colombia.

Base salaries

Base salaries are the fixed, guaranteed amount you offer your candidate before any extras or deductions. In Colombia, salary levels differ by location, industry and job. Salaries for in-demand sectors are often higher than the minimum wage, especially in Medellín and Bogotá. Below are examples of the salary differences across key jobs in Colombia.

Job	Annual salary in COP
Finance manager	233,000,000
Marketing manager	66,025,000
IT specialist	114,000,000
Data scientist	230,000,000
Regional sales manager	201,000,000
HR manager	64,000,000
Business consultant	173,000,000
Civil engineer	238,000,000

Monthly gross salaries in Colombia can also include performance incentives, commissions, allowances and bonuses. These earnings are variable income above the fixed base salary.

Mandatory 13th-month salary

Colombia mandates a 13th-month salary for employees, known as the ‘prima de servicios’. The bonus equals one month’s salary and is paid in two installments. The first is paid by June 30th and the second by December 20th at the latest.

Mandatory transport subsidy

Employees earning up to twice the minimum wage receive a mandatory transportation subsidy. The government sets the allowance alongside minimum wage increases. Currently, the amount is COP 249,095.

Employer contributions

In Colombia, employers are required to contribute a certain percentage of salary to social security benefits as follows:

• Pension Fund: 12%
• Healthcare: 8.5%
• Professional Risks (ARL): 0.522% - 6.96% (varies by risk class)
• Family Compensation Fund: 4%
• ICBF (Family welfare): 3%
• National Apprenticeship Service (SENA): 2%

Statutory employee benefits

Colombia mandates certain statutory benefits that eligible employees must receive from their employers. When an employee leaves, employers must pay the monetary value of certain accrued benefits in a final settlement, e.g., annual leave.

Annual leave: After one year’s service, employees get 15 days of paid leave.
Sick leave: Employees are paid two-thirds of their salary for the first two days of sick leave.
Maternity leave: Mothers receive 18 weeks of paid maternity leave.
Paternity leave: Fathers are entitled to 8 days of paid paternity leave.

Colombia has 18 public holidays each year. Employees are entitled to take these holidays off, but if they agree to work, they must receive a holiday overtime rate above their regular daily wage.

Additional benefits

Employers who want to attract top talent in Colombia can also offer private health insurance, life insurance, dental plans, meal vouchers and education subsidies.

Employment Cost Calculator

Calculate total employment cost in Colombia for your next hire.

What to expect when hiring in Colombia

Easier to navigate	More challenging to navigate
🟢 Talent availability and costs	🔴 Highly regulated employment law
🟢 Hiring timelines	🔴 Payroll, tax and social security compliance across multiple government systems
🟡 Employment of foreign nationals	🔴 Worker misclassification

Talent availability and cost competitiveness

Colombia’s labor market is growing rapidly as more American and European companies take advantage of its business-friendly regulations and investment opportunities. This has changed both the economic landscape and the hiring market. Technology, finance, marketing and sales and professional services are now driving 50% of Colombia’s economy.

The hiring market is diverse and driven by growth across sectors in major cities. Bogotá remains Colombia’s biggest employment market, followed by Medellín. In Bogotá, you will find the largest pool of English-speaking workers, and many speak both English and Spanish. Medellín, with its growing IT and fintech sectors, has many highly qualified experts and senior professionals. Barranquilla holds the nation's expertise in logistics, trade and business services.

First-time employers may be surprised to learn that wages have increased sharply in recent years, and while the country remains competitive, it is no longer viewed as a very low-cost market. Even so, Colombia remains a popular destination for BPO, support and sales centers.

Hiring timelines

When you hire employees locally, the process is relatively quick, taking between 5 and 9 days, sometimes shorter, depending on how quickly the medical exam is completed. All employees must have this medical exam, or their employment contract cannot be registered on the government portal. Hiring foreign nationals takes between 2 and 4 months. Most applications can be done within 8 weeks, provided that all documentation is in place.

Strict regulatory framework

Colombia provides workers with strong protections, but balances them with a more flexible approach towards hiring foreign nationals. International companies are provided with two main modalities for hiring workers in the country, namely:

• Direct employment engagement
• Outsourcing or indirect hiring models

Selecting the right hiring engagement is essential to avoid compliance risks, financial penalties and labor sanctions.

Hiring foreign nationals to work in Colombia

Colombia does not have strict immigration quotas per employer, which makes it easier for global employers to send talent to the country. However, every application still undergoes rigorous checks and is treated on a case-by-case basis.

Type-M visas (Migrant) require sponsorship by a Colombian employer. Applications can be submitted online on the Ministry of Foreign Affairs website, and employees can apply for their visa when a work permit has been authorized. Under Article 13 of Resolution 5477 of 2022, authorities have 30 calendar days to issue a decision. Employer-sponsored visas cannot be transferred from one employer to another. Therefore, if an employee leaves, the sponsorship and visa will be cancelled.

As a legal employer in Colombia, Rivermate is authorized to sponsor work visas for eligible employees. We will coordinate the visa application process and support your employee until the application is finalized, and onboard your employee once they are in Colombia.

Staying compliant when hiring in Colombia

Employment compliance is an important aspect of good foreign investment relations in Colombia. The country has a business-friendly approach, but when you hire local talent (or foreign nationals), you must adhere to the country’s strict labor policies. Here, we highlight key aspects of the employment framework you should know from day one.

Employment contracts must be correctly structured

Employment agreements in Colombia must adhere to local laws and regulations. Locally compliant contracts are written in Spanish and can be translated into another language if the employee requests it. Compensation must be stated in Colombian pesos.

Employment contracts are classified according to their duration:

• Indefinite-term contract: Open-ended employment duration. Where a verbal agreement exists, it is deemed indefinite.
• Fixed-term contract: The agreement's duration is predetermined and cannot exceed 4 years.
• Project-based: The agreement is based on the time required to complete a project.

Trial periods

Local labor laws allow employers to include a trial period or probation period in the employment contract. It must be in writing, and the duration of the trial period must be clearly stated. The employee must agree to the trial period. During this period, either party may terminate the contract in writing without prior notice or severance pay. For indefinite contracts, the trial period may not exceed 2 months.

Hiring contractors in Colombia

In Colombia, an employment contract depends not on the type of agreement used, but on the form the employment relationship takes. So, if a contract meets the essential elements of an employment contract, local authorities will treat it as such. The essential elements of an employment relationship are:

• A provision of services.
• Subordination to one employer who directs the worker’s activities and schedule.
• The payment of remuneration for the services performed.

Strict rules prohibit parties from concealing an employment relationship by using a different agreement, such as a services agreement, and calling the worker an independent contractor. For this reason, worker misclassification is a high-risk compliance obligation that has significant financial implications for an employer.

Hiring remote workers in Colombia

If you don’t have a local entity in Colombia, you can hire remote workers through an Employer of Record. However, Colombian law requires specific provisions for remote workers under EOR arrangements. Remote employees are entitled to the same statutory rights and benefits as full-time employees.

Under the new 2025 telework reforms, workers who earn less than COP 2,847,000 must receive a connectivity allowance of at least COP 200,000. Employees with valid contracts in Colombia who work elsewhere for a period of time must be provided with international health insurance.

Terminations

In Colombia, employment contracts may be terminated at any time; however, the effects differ depending on whether the termination is with or without just cause. For all types of dismissal, the employer must follow due process and keep documentation. An employer must provide severance payments when dismissing an employee without just cause. However, the law does not require a notice period.

Certain employees may not be dismissed unilaterally or without just cause, e.g., pregnant women, employees with union protection and workers who are three or less years from retirement.

Hire with confidence, knowing the right support is behind you

With Rivermate’s local HR experts supporting you in Colombia, you can hire confidently, knowing you’re compliant with local labor laws.

Advantages of hiring through Rivermate in Colombia

Establishing your own legal entity in Colombia can be time-consuming and difficult without local expertise. Rivermate’s EOR services provide an easier, more cost-effective way to enter the Colombian market. The main advantages are:

• We become the legal employer and handle all compliance. You don’t need to establish a local entity until you’re ready.
• We onboard new hires and register the employment contract with the Colombian government.
• We handle payroll processing, tax filing, benefits administration and ongoing HR processes.
• We help you hire foreign nationals by sponsoring visas for eligible employees.
• You can hire compliantly, scale faster and know that your employees are taken care of locally.

Ready to take the first step in Colombia?

Schedule a 30-minute session to discuss your hiring needs with our LatAm experts.

Talk to our Colombian hiring expert

Sources:

Decree 1469 Ministry of Labor