Your first employee in Colombia: contract, pay, hours and leave

Before drafting anything, settle which business will employ the person, because that decides who signs, who files and who pays every month. A foreign company has two realistic options: form a Colombian company, normally a SAS, and put the hire on its payroll, or engage an employer of record that stands in as employer on the contract and runs the payroll while your managers direct the work.

For a single hire the second route usually wins on time, since a new company has to register, obtain its tax number, open a bank account and affiliate as an employer before anyone can be paid. We weigh both routes in EOR vs SAS in Colombia. Whatever you choose, the employee’s rights are identical: the Labour Code (Código Sustantivo del Trabajo) applies to the job, not to the corporate structure behind it.

Think about location at the same stage. The contract names the place of work, and a role done entirely from home falls under one of Colombia’s remote-work regimes, with its own rules on equipment and costs. If the person will work from home most of the week, decide that before the contract is drafted rather than adding it later.

Do not fill the gap with a services contract while you decide. Colombian law presumes that any personal work relationship is employment, and if personal service, continued subordination and pay are all present, the arrangement is an employment contract whatever the document calls it. Our guide to contractors and employees in Colombia explains the risks of getting that wrong.

A first permanent hire should go on a contract with no end date (contrato a término indefinido). Since Ley 2466 de 2025 it is expressly the default, while the other forms (fixed-term, project, occasional) apply only by exception; the fixed-term and project kinds must be in writing.

The contrato a término fijo can still make sense for a defined piece of work, but the rules have tightened:

• the whole relationship, renewals included, may not exceed 4 years
• it renews automatically for the same term unless either side gives written notice at least 30 days before it ends
• contracts under a year can be renewed in writing, but after the fourth renewal each one must be for at least a year
• a fixed-term contract that is not in writing, or misses the rules, counts as open-ended from day one

Even a very short fixed-term or project job earns holidays and prestaciones pro rata. Pull out of a fixed-term job before its end date without just cause and every remaining month’s salary falls due, a bill that grows large when much of the term is left. For most first hires the indefinite contract is simply the cleaner choice.

Resignation works differently from dismissal. Someone leaving an open-ended job gives a month’s notice, 30 calendar days, to let the employer recruit, and the contract cannot penalise them for skipping it. On your side, ending an indefinite contract without just cause means paying the statutory indemnity: below 10 SMMLV, a month’s pay covers the first year, with 20 more days for every year after it.

Whatever the type, the written contract states the parties, place and date, the place of work, the nature of the job, the pay with its method and periods, and how long the contract lasts. Add a probation period (período de prueba) if you want one; it must be agreed in writing and lasts 2 months at most.

Set a gross monthly salary in pesos, at or above the 2026 minimum wage (SMMLV) of COP 1,750,905 for full-time work, and agree in writing which payments are and are not salary. Colombia gives this document unusual weight, since contributions and statutory benefits are both calculated on salary.

Under CST art. 127, salary covers everything paid in money or in kind as direct consideration for the work, including regular bonuses, commissions, overtime and pay for Sunday and holiday work. Occasional, discretionary bonuses and benefits expressly agreed in writing as non-salary fall outside it under art. 128. Payment must be made in legal tender, and nobody on a monthly salary may be left more than a month between pay days.

Three salary levels change the package automatically:

• up to 2 SMMLV (COP 3,501,810): a COP 249,095 monthly auxilio de transporte and free work clothing three times a year
• from 4 SMMLV (COP 7,003,620): an extra 1% employee contribution to the pension solidarity fund
• from 13 SMMLV (COP 22,761,765): the option of an all-inclusive salary (salario integral), agreed in writing, which replaces prima, cesantías and surcharges but not holidays

The salary also sets the employer’s contribution bill. Below 10 SMMLV, a company that files income tax puts 12% into pension, 4% into the caja and an ARL premium from 0.522% in risk class I, but nothing towards employer health, SENA or ICBF. From 10 SMMLV those three add 13.5% of the whole salary. On top come the prima, cesantías and interest, roughly 17.67% of salary between them.

For the lower end of the scale, our explainer on the 2026 minimum wage and transport allowance covers who receives the allowance.

Your first employee’s schedule must fit within 42 ordinary hours a week. That cap, set by Ley 2101 de 2021, has applied from 15 July 2026, and the shorter week came without any pay cut. No single ordinary day may exceed 8 hours, spread over five or six days as agreed, and one day of rest is always left free.

Some flexibility is allowed. The parties can spread the week over days of 4 to 9 hours across up to 6 days without overtime, as long as the weekly total stays at 42. Beyond that, overtime may not pass two hours in a day or twelve in a week, and it costs 25% extra in the daytime and 75% extra at night. The employer keeps an overtime register and gives it to the worker on request.

Timing matters as well. Night hours now run from 19:00 to 6:00 and carry a 35% surcharge, so a team in another time zone that regularly calls a Bogotá colleague at 8 pm is creating night work. An hour worked on the weekly rest day, or on a holiday, has earned 90% on top since July 2026. Of Colombia’s 18 public holidays in 2026, nine are shifted to the Monday after.

Teenage workers have tighter limits, which rarely matter for a first professional hire but are worth knowing: those aged 15 to 17 may work no more than 30 hours weekly and 6 in one day, in daytime only, while older adolescents may work up to 40 hours weekly.

The right to disconnect applies from day one. Every employer must have a written policy that keeps work contact out of rest time, holidays and leave, with a complaints procedure, so agree with your managers how after-hours messages will work.

A first employee will ask about time off, and the statutory answers are generous enough that they belong in the offer conversation. Every completed year of service earns 15 paid working days of annual leave (vacaciones). At least 6 working days must be taken each year, and up to half can be paid in cash instead, by written agreement at the worker’s request.

• sick leave (incapacidad): 66.67% of pay up to day 90, then 50% to day 180; the first two days are the employer’s to pay, after which the EPS pays
• maternity leave: 18 weeks paid at the salary at the start of the leave, with the last 6 weeks shareable between the parents
• paternity leave: 2 weeks, taken within 30 days of the birth
• licencia por luto: five working days after the death of a close family member
• nursing breaks: an hour a day, taken as two halves, until the baby is six months old, then half an hour a day until age 2

Holiday dates are set by the employer within the year after the entitlement arises, with 15 days’ notice, and a vacation register must be kept. Up to 2 years of leave may be carried forward, or 4 for technical, specialised, management and trust staff, and for foreigners working away from where their families live.

Carers on the staff can ask to move to flexible hours or to work remotely, and must get an answer inside 15 working days. These rights cost little when planned and a good deal when ignored, since dismissing a pregnant worker or a recent mother without Ministry of Labour authorisation adds 60 days’ pay to the normal indemnity.

Once the contract is signed, the employer registers the new hire with the social security system and starts the payroll cycle. The deadline that cannot move is the occupational risk insurer (ARL): cover starts the day after affiliation, so enrolment has to exist by the eve of the start date. Health (EPS), pension and the family compensation fund follow in the same window, along with the fund that will hold the employee’s cesantías.

Each month the employer then pays salary, deducts the employee’s health and pension shares (4% each), withholds income tax at source and pays every contribution on the PILA. The yearly calendar adds two prima instalments, January interest and the February cesantías deposit. For a step-by-step sequence with the deadlines, see our timeline from offer to first payroll.

If the employer is Employer of Record Colombia, this whole section is ours to run, and your part is the person, the pay and the work. Where exactly that line falls is laid out in our breakdown of EOR services in Colombia. Our fee is billed in US dollars, beginning at USD 560 a month per person, and a quote for your first hire lists every cost line separately.