How much does a minimum wage employee cost in 2026

A minimum wage worker does not cost the employer $1,750,905 per month. When you add the transportation subsidy, social security contributions, the family compensation fund, and what you must set aside for the service bonus, severance pay, and vacations, the actual value for an exempt company is $2,715,573 per month. If there is no exemption, it rises to $2,951,945, and for domestic service, it stands at $2,864,400.

So you don't have to do the math by hand, we launched the 2026 minimum wage and employer cost calculator at Colombia Move. It shows the monthly, daily, and hourly value, the historical data for the last five years, and the total cost of an employee in three scenarios. In this guide, we explain where every peso goes.

The 2026 minimum wage in numbers

Decree 1469 of December 29, 2025, set the current legal monthly minimum wage (SMMLV) for 2026 at $1,750,905, and Decree 1470 set the transportation subsidy at $249,095. Together they total $2,000,000 for those earning the minimum. The increase compared to 2025 was 23.0%.

The decree had an unusual judicial journey: the Council of State provisionally suspended it in February 2026 and in July revoked that suspension, so Decree 1469 returned to force. The underlying process continues, but the value paid today is $1,750,905.

The hourly value changed mid-year due to the reduction of the working day under Law 2101 of 2021: starting July 15, 2026, the maximum workday is 42 hours per week, so the monthly salary is divided by 210 hours instead of 220. The worker earns the same amount per month, but each hour is worth more, and with it, overtime and surcharges also increase. If you pay additional hours, the overtime and surcharge calculator already applies the date change.

If you are looking for details on who is entitled to the subsidy and how it is settled by day, we explain it in our guide to the 2026 minimum wage: value per day, per hour, and transportation subsidy.

2022–2026 Minimum wage history

In five years, the minimum went from one million to almost $1.75 million. For a small business, that changes the payroll budget from one year to the next, which is the main reason to recalculate the cost of each employee in January instead of reusing the previous year's figure.

How much does a minimum wage employee cost: full breakdown

The employer's cost has four blocks: salary and subsidy, social security, parafiscal contributions, and social benefits. Social security and parafiscal contributions are calculated only on the salary, never on the transportation subsidy. Severance pay and the service bonus, however, do include the subsidy.

On that subtotal, what changes is whether you pay health, SENA, and ICBF:

In other words: on top of the salary and transport subsidy, an exempt company pays about an additional 41% on the salary; a non-exempt one, about 54%; and a household with a domestic worker, about 49%.

Benefits are not paid every month: the table shows the monthly provision that should be set aside. The semi-annual bonus (prima) is paid in two installments (June and December), severance pay (cesantías) is deposited into the fund before February 14, interest on severance pay is paid to the worker before January 31, and vacations are 15 working days paid for each year worked.

Exempt, non-exempt, or domestic service: what is your case?

The difference between the scenarios comes from Article 114-1 of the Tax Statute. Corporations and legal entities that file income tax, as well as natural persons who are employers with two or more workers, do not pay the employer health contribution (8.5%), SENA (2%), or ICBF (3%) for workers earning less than 10 minimum wages.

• Exempt company: Most corporations (SAS, limited companies) with minimum wage employees. Pays pension, ARL (occupational risk), family compensation fund (caja), and benefits.
• Non-exempt employer: For example, a natural person with a single worker in their business, or non-profit entities that do not meet the conditions. Also pays health, SENA, and ICBF.
• Domestic service: A household that hires a domestic employee pays health, pension, ARL, and family compensation fund, but never SENA or ICBF.

If you have questions about your tax regime, confirm it with your accountant before filing the PILA form. The calculator lets you change scenarios with a click and see the difference instantly.

The case of domestic service

Domestic service workers have the same rights as any employee: at least the minimum wage (proportional if they work by the day), transport subsidy, semi-annual bonus, severance pay with interest, vacation, and enrollment in health, pension, ARL, and family compensation fund. For a full-time position, the monthly cost for the household is $2,864,400.

If you hire them by the day, the contributions and benefits are calculated proportionally, with specific rules for weekly contributions. We explain it step-by-step in the guide for hiring a domestic worker by the day with social security, and if you are looking for the English version for foreigners living in Colombia, it is in our legal guide for hiring a domestic worker.

Costs that the calculator does not include

The figure of $2,715,573 is the legal monthly floor for an exempt company, not the total budget. Also, keep in mind:

• Uniform (Dotación): those earning up to two minimum wages are entitled to a pair of shoes and a work uniform three times a year.
• ARL Risk: The calculator uses Class I (0.522%), which corresponds to offices and low-risk jobs. A construction or field worker quotes at a higher class.
• Overtime, Sundays, and holidays: are paid separately with a surcharge on the regular hourly rate of $8,338.
• Occupational medical exams entry and exit, and the cost of electronic payroll if you are already obligated. If you are a small employer, check our guide on electronic payroll for small employers.

When the employment relationship ends, the labor settlement calculator helps you calculate what you must pay at the closing.

Do you already have the budget clear and need to hire? On Colombia Move, you can post your job offer for free and receive candidates near you. If you have never done it, this guide explains how to post vacancies for technical and operational personnel.

Editor's Note: The figures in this guide come from the same logic used by the Colombia Move calculator, with rates verified on September 24, 2026. They are a reference estimate and do not replace the advice of an accountant or the official settlement from your PILA operator.

Frequently Asked Questions

How much does a minimum wage worker cost the employer in 2026?

In 2026, about $2,715,573 per month for a company exempt under Article 114-1 of the Tax Statute. A non-exempt employer pays about $2,951,945, and a household with domestic service, $2,864,400. All three figures include salary, transport subsidy, contributions, and the provision for social benefits.

What is the hourly minimum wage worth in 2026?

As of July 15, 2026, $8,338, because the maximum workweek dropped to 42 hours and the salary is divided by 210. Between January and July 14, the hour was worth $7,959 (using a 220-hour divisor).

Is the transport subsidy taken into account for social security?

No. Health, pension, ARL, and family compensation fund are calculated only on the salary. The transport subsidy is included in the base for severance pay and the semi-annual bonus, and in 2026, it applies to those earning up to two minimum wages ($3,501,810).

Which companies are exempt from paying health, SENA, and ICBF?

Corporations that file income tax and natural persons with two or more workers. The exemption covers employees earning less than 10 minimum wages (less than $17,509,050 in 2026). They still pay pension, ARL, family compensation fund, and benefits.

Is the $1,750,905 minimum wage still in effect after the decree was suspended?

Yes. The Council of State provisionally suspended Decree 1469 in February 2026, but in July 2026, it revoked that measure and the decree regained its validity. The underlying case continues, so it is advisable to be attentive to a final decision.