Labor and Payroll Tax Calculator for Employers in Colombia

Short answer: the cost of an employee is not just the salary. It is built from four blocks (payment to the worker, social security, parafiscal contributions, and provision for benefits), and the exemption in article 114-1 of the Estatuto Tributario determines whether you pay SENA, ICBF and employer health contributions or not. Here I leave you the method with percentages from official sources; I am not going to invent an "official" monthly total, because one does not exist.

I say this because it is the most common mistake of someone about to publish a job opening: they put a salary, get excited about the candidate, and only at the first PILA discover the calculation was different. Better to work out the numbers first.

The four cost blocks

To cost a position, separate it like this:

• Payment to the worker: salary and, if applicable, transportation allowance.
• Social security: health, pension and occupational risk insurance (ARL).
• Parafiscal contributions: family compensation fund, SENA and ICBF.
• Provision for benefits: severance (cesantías), interest on severance, bonus (prima) and vacation. These are set aside separately; they are not UGPP rates, so I am not giving percentages or pesos for them here.

The contribution base (the IBC, which is what the percentages are calculated on) starts from the salary. That is the number that multiplies almost everything else.

The 2026 figures that are set in decree

The legal monthly minimum wage (SMMLV) since January 1, 2026 is $1.750.905 (Decree 1469 of 2025). Decree 159 of 2026, which was transitional, repeated that same figure; it did not change the value. The transportation allowance is $249.095 per month for those who earn up to 2 SMMLV, that is up to $3.501.810 (2 × $1.750.905). The decree defines it as a non-salary benefit.

That allowance is not added to the base for health, pension or ARL. If you include it there, you are overpaying. If you also wonder whether it enters severance and bonus calculations, confirm it with your accountant according to your case; I do not settle that in this guide.

If the position pays exactly the minimum, the breakdown for that case is already in the guide on cost of an employee with minimum wage. I will not repeat that table here.

The fork in article 114-1: exempt or not

This is the part that changes the calculation the most. According to article 114-1 (as transcribed by the DIAN), companies and legal entities that file income tax returns are exempt from SENA, ICBF and the employer's health contribution, for each worker who individually earns less than 10 SMMLV. Ten times $1.750.905 is $17.509.050; from that figure upward, that worker is no longer exempt.

Pay attention to two nuances that are often confused:

• A natural person employer with fewer than two workers is not covered by the exemption. From two workers onward, it is assessed worker by worker.
• Not every SAS or every entity is exempt just for being one: the text requires being an income tax filer, and it leaves out, among others, those in the process of qualifying for the special tax regime.

Pension comes from the 16% that the UGPP calculates, split 75% employer and 25% worker (Law 797 of 2003). The exemption does not erase the family compensation fund or the pension contribution: those are always paid.

How to build your example without an official total

Take the salary of the position and follow these steps:

1. Determine whether the worker earns less than 10 SMMLV and whether your company meets 114-1.
2. Use the salary as the contribution base. Do not add the legal transportation allowance to health, pension or ARL.
3. Apply the column from the table that corresponds.
4. Ask your ARL for your company's rate. The UGPP calculates between 0.522% and 6.960% depending on the assigned risk; there is no single percentage for every office position. For a driving or logistics position the risk is not an office one, and it helps to see how it is described in a transport and logistics job posting.
5. Add your benefit provisions separately.

Watch out for one detail: if agreed non-salary payments exceed 40% of the total remuneration, the UGPP includes the excess in the base. This applies to poorly structured bonuses or extralegal allowances, not to the legal transportation allowance.

An honest frustration: there is no single calculator that gives "the" number, because it depends on your ARL and your regime. Any page that promises an exact total without asking you that is guessing.

What is not included in that percentage

Provision for severance, bonus and vacation falls outside the monthly contributions. The work-clothing allowance (dotación) is not in the percentage either; if the worker is entitled to it, check the work-clothing guide for dates and requirements.

Monday, October 12, 2026

October 12, Day of Ethnic and Cultural Diversity of the Colombian Nation, is a paid rest day. In 2026 it falls on a Monday, so that Monday is the rest day and is not moved. If no work is done, it does not generate any new parafiscal contribution.

If the person works that day, since July 1, 2026 the surcharge is 90% over the ordinary salary, proportional to the hours worked and without prejudice to the ordinary salary (Law 2466 of 2025). Use the hours in your contract; do not invent a divisor.

After costing, publish with clear details

A job posting that states the position, salary or range, contract type, working hours, on-site or remote, and whether contributions are paid, attracts fewer casual browsers. Check the price before publishing: according to the active listings on Colombia Move (October 2026), there are 0 active technology jobs, 0 operational, 1 education and 3 marketing. To see how to write one with clear requirements, look at this guide to accounting job postings. If you are looking for marketing, education or operational profiles, go to the jobs section. For contributions, always confirm with your accountant and file through PILA; you do not need a paid manager to know these percentages.

Frequently asked questions

❓ Do I always pay SENA, ICBF and the family compensation fund?

The 4% family compensation fund contribution is always paid. SENA (2%) and ICBF (3%) are not paid for a worker covered by the exemption in article 114-1; without it, they are. Verify whether your company meets the conditions (check the official source).

❓ Is a natural person with a single employee exempt?

No. A natural person with fewer than two workers remains obligated to pay SENA, ICBF and the employer's health contribution. From two workers onward, the exemption is assessed worker by worker (check the official source).

❓ Does the transportation allowance enter health and pension?

No. Decree 1470 of 2025 treats it as non-salary, so it is not added to the base for health, pension or ARL. If you have doubts about severance and bonus, consult your accountant (check the official source).

❓ From what salary is the exemption lost?

From 10 SMMLV, which in 2026 is $17.509.050 (10 × $1.750.905). Below that figure, it is checked whether the employer meets article 114-1 (check the official source).

❓ What ARL rate do I use if I don't have it yet, for a safe calculation?

Use the range of 0.522% to 6.960% only as a reference and request the certified rate from your ARL. There is no single percentage for office positions; it depends on the risk assigned to the company (check the official source).

❓ What do I publish once I have the cost of the position?

Publish the position, the salary range, the contract type, the working hours and whether the work is on-site or remote. That filters out casual browsers once you have worked out the percentages. Confirm the ARL rate with your administrator and file through PILA; you do not need a paid manager to know these percentages (check the official source).

❓ Does Monday, October 12, 2026 generate an extra parafiscal contribution?

No. It is a paid rest day. If the person works that Monday, the current surcharge is 90% over the ordinary salary, proportional to the hours, in addition to the salary (check the official source).