Payroll in Colombia 2026: contributions, withholding and prima

In Colombia the employer withholds the employee's 4% health and 4% pension contributions, 1% more for the solidarity fund from four minimum wages, and the retención en la fuente (income tax). It pays them with its own share, roughly 16.5% to 30% of salary, through the PILA. The prima de servicios, cesantías and paid vacation come on top.

This guide covers the rules in force in October 2026, with amounts in Colombian pesos (COP). Many thresholds are set in minimum wages (SMMLV, COP 1,750,905 in 2026) or in tax value units (UVT, COP 52,374 in 2026).

Payroll in Colombia at a glance

Social security and parafiscal contributions

Contributions are calculated on the ingreso base de cotización (IBC), the monthly salary, never below one SMMLV and capped at 25 SMMLV (COP 43,772,625 a month in 2026) under articles 18 and 204 of Ley 100 de 1993.

The article 114-1 exoneration. Companies and other legal entities that file income tax do not pay the employer's 8.5% health contribution, the 2% SENA or the 3% ICBF contribution for employees who earn less than 10 SMMLV (COP 17,509,050 a month in 2026). Natural-person employers with two or more employees get the same exoneration. For employees at or above 10 SMMLV everything is due. A typical company therefore pays about 16.52% for most staff (pension 12% + ARL class I 0.522% + caja 4%) and about 30% for high earners.

ARL by risk class. The rate depends on the company's activity. Decreto 1072 de 2015 (art. 2.2.4.3.5) sets these initial rates: class I 0.522%, class II 1.044%, class III 2.436%, class IV 4.350% and class V 6.960%. ARL cover starts on the calendar day after affiliation.

Solidarity fund. Employees whose IBC is 4 SMMLV or more (COP 7,003,620) pay an extra 1% to the Fondo de Solidaridad Pensional; from 16 SMMLV it rises by a further 0.2 to 1 point (Ley 100, arts. 20 and 27). The pension reform of Ley 2381 de 2024 would raise this contribution to between 1.5% and 3%; the official Colpensiones compilation shows its upheld articles taking effect on 1 April 2027, after Constitutional Court ruling C-264 of 2026. Check the final text before April 2027.

Income tax withholding (retención en la fuente)

The employer withholds income tax every month with one of two methods: procedimiento 1, which applies the table to each month's taxable payments, or procedimiento 2, a fixed rate recalculated every June and December from the previous 12 months (ET arts. 385 and 386). Cesantías and their interest stay outside the monthly calculation, and under procedimiento 1 the legal prima is taxed on its own.

To get the monthly base (ET arts. 55, 56, 206, 387 and 388):

1. 1Add up the taxable labour payments of the month.
2. 2Subtract the mandatory health and pension contributions, including the solidarity fund: they are non-taxable income.
3. 3Subtract deductions the employee has documented: dependants (10% of gross labour income, up to 32 UVT a month), prepaid medicine or health insurance (up to 16 UVT a month) and mortgage interest.
4. 4Subtract the 25% exempt labour income, limited to 790 UVT a year, calculated after the steps above.
5. 5Check the limit: exempt income and deductions together cannot exceed 40% of the income left after step 2, and 1,340 UVT a year (ET art. 336).

Then convert the base to UVT and apply the article 383 table:

With the 2026 UVT of COP 52,374, the zero band covers a monthly base of up to COP 4,975,530. For a single employee without other deductions, that means no withholding on a monthly salary up to about COP 7.29 million.

Minimum wage, working time and mandatory benefits

• Minimum wage: COP 1,750,905 a month from 1 January 2026 (Decreto 1469 de 2025), 23% more than the COP 1,423,500 of 2025.
• Auxilio de transporte: COP 249,095 a month (Decreto 1470 de 2025) for employees earning up to 2 SMMLV (COP 3,501,810), wherever public transport operates.
• Prima de servicios: 30 days' salary a year, half by 30 June and the other half within the first 20 days of December, in proportion to the time worked (CST art. 306).
• Cesantías: one month's salary per year of service (CST art. 249), settled on 31 December and deposited in the employee's cesantías fund before 15 February; a late deposit costs one day's salary for each day of delay (Ley 50 de 1990, art. 99).
• Interest on cesantías: 12% a year on the cesantías earned, paid to the employee in January of the following year.
• Vacation: 15 working days of paid vacation per year of service (CST art. 186).
• Working week: at most 8 hours a day and 42 hours a week from 15 July 2026, the last step of the gradual cut in Ley 2101 de 2021 (CST art. 161).
• Overtime and surcharges (CST art. 168): daytime overtime +25%, night-time overtime +75%, ordinary night work +35%. Since 25 December 2025 night work runs from 7 p.m. to 6 a.m. (CST art. 160, as amended by Ley 2466 de 2025).
• Sundays and public holidays: a surcharge of 90% from 1 July 2026, rising to 100% from 1 July 2027 (CST art. 179, as amended by Ley 2466 de 2025).

Monthly payroll calendar and filings

1. 1Before the first day of work: affiliate the employee with an EPS, a pension administrator (Colpensiones or a private fund), the company's ARL and its caja de compensación. ARL cover only starts the calendar day after affiliation.
2. 2Every pay period: pay the salary at least monthly; overtime and night surcharges are paid with the salary of the period, or at the latest with the next one (CST art. 134).
3. 3Every month, the PILA: self-assess and pay all social security and parafiscal contributions through the Planilla Integrada de Liquidación de Aportes, by the business day that matches the last two digits of the NIT: the 2nd business day for 00 to 07, up to the 16th for 94 to 99 (Decreto 780 de 2016, art. 3.2.2.1). Each contribution is rounded up to the next multiple of COP 100.
4. 4Every month, the withholding return: declare and pay the retención en la fuente by the 7th (NIT ending in 1) to the 16th (ending in 0) business day of the following month; December's return is due in January (Decreto 1625 de 2016, art. 1.6.1.13.2.33).
5. 5Every month, electronic payroll: income-tax filers that deduct payroll costs must send the documento soporte de pago de nómina electrónica to the DIAN for validation within the first 10 days of the month after the payment (Resolución DIAN 000013 de 2021, art. 8).
6. 6June and December: pay each half of the prima de servicios.
7. 7January and February: pay the interest on cesantías in January and deposit the cesantías in each employee's fund before 15 February.

Worked example: COP 8,000,000 a month

Ana works for a company in Bogotá that files income tax. Her salary is COP 8,000,000 a month, the company is in ARL risk class I, she is single without dependants and the company uses procedimiento 1. She earns more than 4 SMMLV, so she pays the solidarity fund, and less than 10 SMMLV, so the company is exonerated from health, SENA and ICBF. Above 2 SMMLV there is no auxilio de transporte.

The exemption of COP 1,820,000 a month (COP 21.84 million a year) is below both the 790 UVT annual cap (COP 41,375,460) and the 40% limit of COP 2,912,000. The ARL contribution of COP 41,760 is rounded up to COP 41,800 in the PILA.

Provision each month about COP 666,667 for the prima, COP 666,667 for cesantías and COP 80,000 for their 12% interest, which brings the full monthly cost close to COP 10.74 million. Without the exoneration, or for a salary of 10 SMMLV or more, the company would also pay health (COP 680,000), SENA (COP 160,000) and ICBF (COP 240,000).

Common mistakes

1. 1Charging health, SENA and ICBF for employees below 10 SMMLV when the company is exonerated, or leaving them out for employees at 10 SMMLV or more.
2. 2Forgetting the solidarity fund in the month a raise, commission or overtime takes the IBC to 4 SMMLV.
3. 3Taking the 25% exemption on the gross salary instead of the income left after contributions and deductions, or ignoring the 40% limit when the employee claims dependants or prepaid medicine.
4. 4Paying the auxilio de transporte to employees above 2 SMMLV, or forgetting it for those below.
5. 5Running January payroll with the previous year's minimum wage or UVT.
6. 6Still paying Sunday work at 80% after 1 July 2026, or ignoring the 7 p.m. start of night work and the 42-hour week.
7. 7Depositing cesantías late: after 14 February each day of delay costs one day's salary.
8. 8Skipping the electronic payroll document, which leaves payroll costs without support for the income tax deduction.

How Clientlly helps

Clientlly ships a built-in payroll profile for Colombia, checked against official sources on 1 October 2026: the article 383 withholding table as modelled in pesos with the 25% exempt labour income, the 4% health and 4% pension contributions, the 1% solidarity fund from 4 SMMLV, the employer's pension, ARL class I and caja de compensación rates with the article 114-1 exoneration, the 25 SMMLV ceiling and the minimum wage. It calculates gross to net and employer contributions, produces payslips and supports recurring payroll adjustments as well as employee and payroll imports; an administrator can adjust the rates in the payroll tax settings.

The profile models one employee in a primary job, single, without dependants, at national level, so other ARL classes, employees above 10 SMMLV, the prima and cesantías, sector agreements and personal deductions must be checked. Clientlly does not file the PILA or send the electronic payroll document to the DIAN: you do that through your PILA operator and your electronic payroll provider.

Alongside payroll, the human resources module handles leave requests and approvals with a leave calendar and keeps HR documents, and attendance and time tracking records working hours and overtime, which you need to apply the night and Sunday surcharges. To close the books after each payroll run, see our month-end close checklist.