EOR services Colombia explained: what we run and what stays with you

With an employer of record, the paperwork employer and the working boss are two different businesses. The contract under Colombian law carries our signature; we also enrol your hire in social security, process peso payroll and settle the statutory benefits. You choose the person, set the salary, define the job and lead the work from Monday to Friday.

That split is the whole idea behind Employer of Record Colombia. Legally, the person you recruit is our employee, and so the duties that the Labour Code (Código Sustantivo del Trabajo) places on an employer land with us: the written contract, the affiliations, the monthly contribution form, withholding tax and the dated payments that Colombian law adds on top of salary. The work itself, and the decisions that shape it, stay with your managers.

A foreign company usually reaches this point after finding a strong candidate in Bogotá, Medellín or Cali and realising it has no way to put that person on a Colombian payroll. Forming a company is one answer. Using our services is the other, and the rest of this guide sets out, duty by duty, which side of the line each task falls on.

The first block of work we take on is legal paperwork that must exist before your hire does a single hour. Open-ended employment is the starting assumption in Colombian law, so most contracts we sign are contratos a término indefinido. Fixed-term and project-based forms are the exception and have to be on paper; get the formalities of a fixed-term one wrong and the job counts as open-ended from its first day.

Before the start date we handle the following:

• a signed contract covering the CST art. 39 minimum: who the parties are, where the job is done, what the work consists of, how much is paid and how often, and for how long
• a probation clause (período de prueba) where you want one, agreed in writing and never longer than 2 months
• affiliation to an occupational risk insurer (ARL) at least one day before work begins, because ARL cover starts the calendar day after affiliation
• membership of an EPS for health cover, a pension administrator (Colpensiones or a private AFP) and one of the regional cajas de compensación familiar
• the severance savings fund (cesantías) that the worker picks, which receives a yearly deposit

We also keep the records that follow from those registrations. On request, an employee is entitled to see the PILA proving their contributions went in, and we hold those files. Sick leave or maternity leave does not pause anything: contributions continue on the amount of the benefit.

If the person is not Colombian, we also run the employer reports that follow a foreign hire: the SIRE notice to Migración Colombia within 15 calendar days and the RUTEC entry, which the Ministry of Labour expects inside 120 days of the contract. A visa decision belongs to Cancillería, so nobody can promise one, but the employer-side forms are ours to file. Our onboarding timeline from offer to first payroll puts these steps in order.

Once the person starts, our job becomes a monthly cycle plus a handful of fixed dates in the year. Salary goes out at least once a month. We withhold the worker’s share of contributions from that pay (health at 4%, pension at 4%, plus a 1% solidarity fund charge for anyone earning 4 SMMLV or more) plus monthly income tax under the art. 383 table of the Tax Code, known as retención en la fuente.

Contributions from both sides travel together on a single form, the PILA, whose due date lands somewhere from the second to the sixteenth business day, depending on the employer’s NIT. DIAN separately receives the withholding return, staggered by NIT digit from the seventh business day onward, and an electronic payroll record (nómina electrónica) for every payment, no later than the tenth day of the next month. There is more on each step in our guide to how a Colombian pay run works.

The dated payments are where foreign employers most often get caught out, so we diarise them from the first month:

• the service bonus (prima de servicios): the first half settled by the end of June, the second inside December’s first twenty days
• a 12% annual return on the cesantías balance (intereses sobre cesantías), which reaches the worker each January
• the cesantías deposit, one month’s salary per year of service, into the fund before 15 February
• clothing and footwear (dotación) three times a year for anyone on 2 SMMLV or less

A late cesantías deposit costs one day’s salary for every day of delay, which is why we treat 14 February as a hard stop.

Everything about what the job is and how it is done stays with you. You recruit and interview, decide who gets the offer, and agree the salary within the limits the law sets (never below COP 1,750,905 monthly for a full-time post in 2026). You write the job description that goes into the contract, set objectives, review performance, approve holidays and run the team.

Day-to-day management in Colombia comes with rules your managers need to know, because they set the hours:

• from 15 July 2026 an ordinary week may not exceed 42 hours, and a single ordinary day stops at 8
• extra hours top out at two in any day and twelve across the week, paid at 25% more by day or 75% more at night
• the night band starts at 19:00 and ends at 6:00, with a 35% surcharge on every hour in it
• Sundays, or another agreed rest day, and public holidays attract a 90% premium since 1 July 2026, going to 100% in July 2027
• every employer needs a right-to-disconnect policy, so messages after hours should be the exception

Equipment is a point to settle at the start. The Labour Code says the employer supplies the tools and materials for the work unless the parties agree otherwise, so we agree with you in writing who buys the laptop, who owns it and how it comes back at the end. Variable pay, bonuses and benefits are also your call; we tell you how each one is treated, because regular bonuses count as salary under CST art. 127 and change the contribution base.

Some decisions start with you and are carried out by us, and the end of an employment relationship is the clearest example. You may decide that a role is no longer needed or that performance has fallen short. Because we are the employer, the formal steps and the payments run through us, and Colombian law is specific about both.

A warning or suspension now follows the procedure Ley 2466 de 2025 wrote into CST art. 115: charges set out in writing, the evidence shared, five days or more for a reply, a reasoned outcome and a route to appeal. Ending an indefinite contract without just cause (despido sin justa causa) means paying an indemnity. For pay under 10 SMMLV the formula is a month’s salary for the opening year of service plus twenty days for every year after, pro rata. Cutting a fixed-term contract short means paying out every remaining month of it.

Certain employees cannot be dismissed without authorisation from the Ministry of Labour, including pregnant workers, those on maternity leave and in the weeks after it, and expectant fathers whose spouse or companion is pregnant and has no formal job. Skip that authorisation and 60 further days’ pay is owed in addition. A termination also stays without effect until the employer can prove contributions for the preceding quarter were settled.

Resignations follow their own rule. An employee on an indefinite contract who wants to leave gives 30 calendar days’ notice so that a replacement can be found, and no penalty may be attached to skipping it. When the contract ends for any reason, the final settlement (liquidación) of pending salary, prima, cesantías, interest and unused holiday has to be paid promptly; each day of delay can cost one day’s salary, for up to 24 months.

Our guide to termination and indemnity in Colombia walks through the table with examples. In practice, tell us early when you are thinking about an exit; the cost and the steps depend on facts we can check before anything is said to the employee.

If your business is in Britain, our note for UK companies with Colombian hires adds the points specific to you.

Our service fee, from USD 560 for each employee every month and quoted in US dollars, is billed on top of the employment cost. That employment cost has two layers beyond salary. The first is the employer’s contributions: below 10 SMMLV the employer’s share is roughly 16.5%, made of 12% to pension, 4% to the caja and 0.522% to the ARL at the class I starting rate, because a company that files income tax is exempt from the employer’s 8.5% health contribution and the SENA and ICBF levies under art. 114-1 of the Tax Code. The second is the statutory benefits, which add about 17.67% (prima 8.33%, cesantías 8.33%, interest 1%).

At a salary of COP 8,000,000 a month in Bogotá, that comes to roughly 34.2% on top of base pay before our fee. The pricing page shows how we quote, and a written quote from us splits each line out.

Before you sign with any provider, us included, get clear answers to a short set of questions:

• Does the monthly quote show prima, cesantías and interest as separate accruals, or only the salary?
• What happens to the cost if a raise takes the salary past the 10 SMMLV mark, which is COP 17,509,050 monthly this year?
• Who pays the dismissal indemnity if you decide to end the role, and how is it invoiced?
• Which of the dated payments in June, December, January and February appear on which invoice?

If you are comparing providers, our checklist on how to shortlist a Colombian EOR goes further into the questions that separate a careful operator from a reseller.