How much a minimum-wage employee costs in 2026

A minimum-wage worker does not cost the employer $1,750,905 per month. When you add the transportation allowance, social security contributions, the family compensation fund contribution, and the amounts you should set aside for bonus, severance and vacation pay, the real cost 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 comes to $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 history of the last five years, and the total cost of an employee in three scenarios. In this guide we explain where every peso comes from.

The 2026 minimum wage in figures

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

The decree had an unusual legal path: the Council of State provisionally suspended it in February 2026, and in July it revoked that suspension, so Decree 1469 is back in force. The main proceeding continues, but the amount paid today is $1,750,905.

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

If you want details on who is entitled to the allowance and how it is calculated by day, we explain it in our guide to the 2026 minimum wage: daily value, hourly value and transportation allowance.

Minimum wage history 2022–2026

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, and it is the main reason to recalculate the cost of each employee in January instead of reusing last year's figure.

How much an employee earning the minimum wage costs: full breakdown

The employer's cost has four blocks: salary and allowance, social security, payroll contributions (parafiscales), and social benefits. Social security and payroll contributions are calculated only on the salary, never on the transportation allowance. Severance and bonus pay, however, do include the allowance.

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

In other words: on top of the salary and allowance, an exempt company pays about 41% extra over 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 you should set aside. The bonus is paid in two installments (June and December), severance is deposited into the fund before February 14, severance interest is paid to the worker before January 31, and vacation is 15 business days paid for each year worked.

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

The difference between the scenarios comes from article 114-1 of the Tax Statute. Companies and legal entities that file income tax, and individual employers with two or more workers, do not pay the employer's health contribution (8.5%), SENA (2%) or ICBF (3%) for workers who earn less than 10 minimum wages.

• Exempt company: most companies (SAS, limited liability companies) with minimum-wage employees. It pays pension, ARL, the compensation fund and benefits.
• Non-exempt employer: for example, an individual with a single worker in their business, or non-profit entities that do not meet the conditions. It also pays health, SENA and ICBF.
• Domestic service: a household that hires a domestic worker pays health, pension, ARL and the compensation fund, but never SENA or ICBF.

If you have doubts about your regime, confirm it with your accountant before filing the PILA payroll contribution form. The calculator lets you switch scenarios with one click and see the difference instantly.

The domestic service case

Domestic workers have the same rights as any employee: at least the minimum wage (prorated if they work by the day), transportation allowance, bonus, severance with its interest, vacation, and enrollment in health, pension, ARL and the compensation fund. For a full-time schedule, the monthly cost for the household is $2,864,400.

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

Costs the calculator does not include

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

• Work uniforms: those who earn up to two minimum wages are entitled to a pair of shoes and a work outfit three times a year.
• ARL risk: the calculator uses class I (0.522%), which corresponds to offices and low-risk work. A construction or field worker contributes at a higher class.
• Overtime, Sunday and holiday work: these are paid separately with a surcharge over the regular hour of $8,338.
• Occupational medical exams at hiring and termination, and the cost of electronic payroll if you are already required to use it. If you are a small employer, check our guide to electronic payroll for small employers.

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

Already clear on the budget and need to hire? On Colombia Move you can publish the job offer for free and receive candidates near you. If you have never done it, this guide explains how to publish vacancies for technical and operational staff.

Editorial 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 an employer pay for a minimum-wage worker in 2026?

In 2026, about $2,715,573 per month for an exempt company 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, allowance, contributions and the provision for social benefits.

How much is the minimum wage hour in 2026?

From 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 (divisor of 220 hours).

Is the transportation allowance counted for social security?

No. Health, pension, ARL and the compensation fund are calculated only on the salary. The allowance does enter the base for severance and bonus, and in 2026 it applies to those who earn up to two minimum wages ($3,501,810).

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

Companies that file income tax and individuals with two or more workers. The exemption covers employees who earn less than 10 minimum wages (less than $17,509,050 in 2026). They still pay pension, ARL, the compensation fund and benefits.

Is the $1,750,905 minimum wage still in force 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 main proceeding continues, so it is worth watching for a final decision.