How Much Does It Cost to Have an Employee in Colombia Earning the Minimum Wage?
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Accounting Bogotá
How much does it cost to have an employee in Colombia earning the minimum wage?
The minimum wage in Colombia for 2026.
Key information
With the issuance of Decree 0159 of February 19, 2026, the amount of the minimum wage for 2026 was defined at $1,750,905. This means that for an employee who works full time, between 6 and 8 hours per day and 44 hours per week, the minimum amount payable for services is $1,750,905 plus all other factors that make up salary under the Substantive Labor Code. Assuming the employee works only daytime daily hours and no holidays, the employer’s monthly cost is $2,765,488, broken down as follows:
| Concept | Monthly value |
|---|---|
| Salary | $1,750,905 |
| Transportation allowance | $249,095 |
| Service bonus | $166,600 |
| Severance pay | $166,600 |
| Interest on severance pay | $19,992 |
| Vacation | $73,012 |
| Health contributions | $0 |
| Pension contributions | $210,108 |
| ARL occupational risk rate I | $9,140 |
| SENA exempt under Article 114-1 (1) | $0 |
| ICBF exempt under Article 114-1 (1) | $0 |
| Compensation fund | $70,036 |
| Estimated work clothing/equipment (2) | $50,000 |
| Total monthly cost | $2,765,488 |
(1) Article 114-1. Exemption from contributions. Companies, legal entities and similar entities that are income tax and complementary tax filers are exempt from paying payroll contributions to the National Learning Service (SENA), the Colombian Family Welfare Institute (ICBF), and contributions to the contributory health regime for workers who individually earn less than ten (10) current legal monthly minimum wages.
Likewise, individual employers are exempt from paying payroll contributions to SENA, ICBF and the health social security system for employees earning less than ten (10) current legal monthly minimum wages. This does not apply to individuals who employ fewer than two workers, who remain required to make the contributions referred to in that paragraph.
(2) Article 230 and following of the Substantive Labor Code do not determine a specific amount for work clothing/equipment; they only state that one pair of shoes and one work outfit must be supplied every four months. Therefore, we estimate a minimum monthly value of $50,000.
This information is vital when deciding to hire one or more employees because it allows the true cost to be known in advance. Many times, at first glance, only the minimum wage is considered as the only monthly payroll cost, creating an imbalance in the income budget. This generally occurs among employers who do not keep proper accounting records, and more frequently among individual employers who do not keep accounting records and do not have proper labor advice.
As a business owner, you should focus your efforts on developing your company’s operations. We take care of labor advice and the correct calculation of your payroll.
Remember that we treat your accounting matter, situation or problem as our own in order to solve it quickly.
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