Automate payroll in Colombia with Al-powered calculations, local PILA handling, and compliant payslips generated in seconds.
Establish credibility and match buyer objections: compliance, local knowledge, pricing clarity, and support.
Local Compliance Without Local Overhead: Ontop automates Colombia tax calculations and Convención Colectiva requirements so you avoid setting up a local entity. The platform handles Prima de Servicios payments, wage floors, and regional tax variation to keep payroll compliant and predictable. Transparent Pricing And Fees: Pricing clearly shows payroll fees, exchange rates, and contractor or EOR plan costs before payment.
Finance teams get predictable statements with no surprise charges. Human Support When It Matters: Live support helps resolve local queries and edge cases. Dedicated onboarding specialists guide tax registration and social security setup so teams move from hire to pay faster. Global Coverage With Colombia Expertise: Ontop supports hiring across 150+ countries while providing Colombia-specific workflows. Proration for Prima de Servicios, Convención Colectiva compliance, and DIAN deadline management. Scale globally while keeping local accuracy.
Provide fast facts: minimum wage, pay frequency, bonuses, regional salary ranges. Satisfies informational intent and helps long-tail SEO.
Minimum Wage And Pay Frequency: Colombia's minimum wage is $1,750,905 COP Monthly. With Prima de Servicios, annual total reaches the statutory requirements. Many employers pay 1 month of salary per year (statutory 13th month pay) or prorate into Bi-weekly (Quincenal) or Monthly payments. Ontop supports both structures.
Average Salary And Net Take Home: National average salary is ~$25,896,000 COP per year, about ~$2,158,000 COP per month gross. Ontop displays gross-to-net breakdowns so payroll and offers align with local expectations.
Regional Variation To Budget For: Salaries run higher in Bogotá and Medellín. Bogotá averages $2,500,000 - $3,500,000 COP (~20% above national). Medellín around $2,300,000 - $3,200,000 COP (~10-15%). Ontop lets you model regional differences in offers and cost projections.
Prima de Servicios: Colombia commonly provides 1 month of salary per year (statutory 13th month pay). Payroll logic captures proration rules so payslips match local contract terms.
Colombia's wage structure includes Convención Colectiva that set sectoral minimums. Buyers search "minimum wage by sector," "Convención (CBA) wages." Captures mid-funnel research intent.
National Statutory Minimum Wage: Colombia's national minimum wage is $1,750,905 COP Monthly. Applies to all workers unless a higher sectoral minimum applies. Revised annually.
Convención Colectiva Sectoral Minimums: Colombia has multiple active Convención Colectiva agreements covering specific sectors. These set minimums higher than the statutory minimum depending on industry and role. Sectors include key local industries.
How Sectoral Wage Floors Affect Payroll: If an employee falls under a specific Convención (CBA), you must pay the sectoral minimum. Underpaying triggers wage claims, back pay, and penalties. Ontop stores and applies the correct rate based on employee role and sector.
How Ontop Applies Correct Wage Floors: Ontop maintains an updated Convención (CBA) database and automatically applies the correct minimum wage. During payroll preview, the system displays which agreement applies and confirms compliance. Removes manual compliance risk.
National Average Salary Benchmark: Colombia's national average salary is approximately ~$25,896,000 COP per year. Varies by role, experience, and sector. Larger cities run up to 20% higher; rural regions typically align with the statutory minimum.
High-Cost Cities: Bogotá and Medellín: Bogotá offers salaries ~20% above national average, particularly in tech and finance. Typical range: $2,500,000 - $3,500,000 COP annually for mid-level roles. Medellín offers ~10-15% premium with strength in innovation and services. Typical range: $2,300,000 - $3,200,000 COP.
Secondary Cities and Regional Variation: Secondary cities generally sit between 5% to 10% above the national average, depending on local industries. Rural regions typically align with or fall below the national average. When budgeting for diverse teams, account for market research to ensure equitable offers.
How Ontop's Cost Calculator Handles Regional Modeling: Input location and role to preview total employer cost. See how regional differences, wage floors, and benefits combine to show true cost of employment by city.
Buyers search "contract types Colombia," "permanent vs fixed-term." Legal structure and misclassification risk are critical for compliance.
Permanent Full-Time Employment (Contrato a Término Indefinido): Standard indefinite contract with full statutory protections. Employees get all mandatory benefits (Prima de Servicios, Vacaciones, sick leave, maternity leave, Cesantías). Termination requires just cause or economic redundancy with notice and severance payout. Employer PILA contributions typically 20.5%.
Fixed-Term Contracts (Contrato a Término Fijo): Limited-duration contracts (typically for a fixed period, renewable). Used for project work, seasonal roles, or temporary needs. Same taxes and benefits as permanent, but with defined end date. Subject to renewal restrictions and Convención (CBA) rules. Simpler termination but accrued benefits paid in full.
Part-Time Contracts: Reduced hours subject to local statutory limits. Salary and benefits are prorated by hours worked. PILA and taxes apply pro-rata. Ontop handles prorated Prima de Servicios automatically.
Apprenticeships: Training contracts for students or junior profiles with reduced PILA contributions where applicable. Includes structured training and on-the-job learning. Misclassification can trigger reclassification penalties.
Self-Employed / Prestación de Servicios (Contractor/Independent): Independent contractor operating own business. No employer obligations, only invoice payments. Contractor handles own PILA, taxes, invoicing. Critical: if worker appears to be employee (direction, control, exclusivity), you face reclassification and back-pay exposure.
Compliance Differences Between Contract Types: Tax rates, PILA contributions, benefits, termination rules, and Cesantías accrual vary by type. Misclassification triggers wage claims, penalties, and reclassification costs.
How Ontop Templates & Payroll Logic Handle Each Type: Ontop provides compliant templates for each type and applies correct payroll logic: permanent benefits, fixed-term accruals, part-time prorations, apprenticeship rates, and Prestación de Servicios (Contractor/Independent) invoicing. Avoids misclassification risk.
Explain operational flow from onboarding to monthly payments. Reduces friction and clarifies steps.
Onboarding And Registration: Ontop handles registration with Colombia tax authorities (DIAN) and PILA and collects required IDs. Automation plus human verification reduces setup time and avoids compliance gaps. Typical onboarding: a few business days.
Monthly Payroll Calculation: Gross-to-net includes progressive 0 - 39 tax rates, 8% PILA, and Prima de Servicios proration. Platform applies region-specific tax bands, Convención (CBA) rules, and wage floors for accurate payslips.
Contributions And Filings: Employer contributions include PILA (8) and applicable local surcharges. Submitted according to statutory deadlines to PILA on your behalf. Ontop maintains records for annual reconciliation.
Payment Execution And Reconciliation: Payments in COP $ (Peso Colombiano) via local bank transfers to local accounts. Ontop shows conversion rates and fees before approval. Audit-ready receipts and instant USD payout options available.
EOR Vs Prestación de Servicios (Contractor/Independent): Your Options: Choose Prestación de Servicios (Contractor/Independent) plans for flexible work or full EOR for permanent employees. Ontop supports both and highlights compliance differences so you pick the right structure.
Finance teams search "Colombia payroll deadline." Captures operational queries and establishes Ontop as deadline-management partner.
Monthly Tax Withholding & PILA Payment Deadlines: DIAN tax withholding due Between August 12 and October 23 (Individuals, based on Tax ID) via DIAN online portal. PILA contributions due Monthly, between the 2nd and 10th business day (based on Tax ID) to PILA authority. Late payments trigger Daily default interest (usury rate -2%) + UGPP Penalties (up to 200% of omitted value) penalty plus interest.
Annual Compliance Deadlines: Certificate of Contributions (Certificado de Aportes): annual PILA reconciliation, due Issued annually (no specific filing deadline, handled monthly). Declaración de Renta Personas Naturales: due August - October annually. Certificado de Ingresos y Retenciones (Form 220): annual employee tax certificate due By March 31st (for the previous tax year).
Payroll Processing Calendar (Monthly Example):
Week 1-3: Gather incidents -> Week 4: Calc -> Day 30/1: Pay Employee -> Day 1-10 next month: Pay Social Security. Key Regulatory Bodies & Filing Channels: DIAN:
Tax collection and customs (Income Tax, Withholding). Online filing via official portals.
UGPP (Pension and Parafiscal Management Unit): Audits social security contributions (The "Payroll Police").
Ministerio del Trabajo (Ministry of Labor): Labor rights protection and contract inspection.
Penalties for Non-Compliance: Late DIAN remittance:
Daily default interest (usury rate -2%) + UGPP Penalties (up to 200% of omitted value) plus interest. PILA shortfalls result in fines. Missing documentation increases audit exposure. Audit exposure increases with missing filings. Willful violations can trigger criminal liability.
How Ontop Manages Deadlines Automatically: Ontop tracks all compliance deadlines, sends alerts before due dates, and submits filings automatically. Finance team approves payroll ahead of deadlines. All documentation audit-ready.
Buyers search "how much leave Colombia," "maternity leave," "paid leave entitlements." Impacts total cost of employment and satisfies planning intent.
Prima de Servicios (Paid in two installments: 50% by June 30th, 50% by December 20th): All permanent employees entitled to 1 month of salary per year (statutory 13th month pay). Typically paid in Paid in two installments: 50% by June 30th, 50% by December 20th, or prorated across year. Statutory bonus, not discretionary. Must factor into annual payroll cost.
Vacaciones: Minimum 15 working days of paid vacation annually. Unused leave carryover varies by Convención (CBA). Some allow unlimited carryover; others limit carryover. Leave paid at regular rate upon termination if unused.
Incapacidad (General or Labor): Statutory sick leave paid at 66.6% (Days 3-90 via Health entity), 50% (Days 91-180). Employer pays days 1-2 at 100%.. Medical certification required after a few consecutive days as per local law. PILA may provide supplementary coverage for longer absences.
18 weeks of maternity leave. Paid at 100% of salary by the local health entity. Additional parental leave may apply.
Public Holidays: Colombia observes 18 days (Emiliani Law moves most to Mondays) national holidays annually. Employees receive full pay or premium pay if required to work. Regional variations exist. Cesantías: Permanent employees receive 1 month salary per year (deposited to fund) + 12% interest on that amount (paid directly to employee in Jan) when terminated without just cause. Cesantías is a significant liability, must be accrued regularly and paid in full at termination.
How Ontop Automates Benefit Accrual & Compliance: Ontop automatically calculates Prima de Servicios, leave balances (by Convención (CBA) type), maternity deductions, and Cesantías reserves. Payslips show accruals and deductions clearly. Audit-ready.
Decision makers need concrete cost inputs. Provide contribution ranges, deduction rates, and sample calculations for budget decisions.
Employer PILA And Additional Charges: Employer PILA varies by sector and contract. Approximate rates:
Employee Deductions And Tax Bands: Employee deductions include 8% PILA and progressive DIAN tax: 0 - 39 Regional/local taxes may add extra percentages.
Total Employer Cost Example: Scenario: Permanent employee in Bogotá at $5,000,000 COP/month gross.
For annual planning, expect the total employer cost to be roughly ~35 (with payroll tax exonerations) to ~52% (full burden) above the gross salary, plus applicable statutory accruals for benefits.
Clarify payment rails, currency handling, and worker features that influence adoption and retention.
Local COP $ (Peso Colombiano) Transfers And Pay Runs: Payroll in Colombia typically uses COP $ (Peso Colombiano) payments via local bank networks to local accounts. Ontop supports local rails so workers receive funds on payday in a single auditable run. No conversion friction.
Multi-Currency And Dynamic Conversion: When paying from other currencies, Ontop shows rates and fees before confirmation. Finance leaders get transparent previews. All conversions logged for audit.
Ontop Wallet And Instant USD Payouts: Workers receive USD via Ontop wallet backed by U.S. bank for fast access. Instant payouts reduce waiting times. Visible on worker dashboard and app. Useful for remote workers or USD preference.
Visa Debit And Worker Perks: Ontop issues Visa cards (physical or virtual) for immediate fund access. Security controls (instant freeze, limits) and perks (cashback, travel benefits, reduced transfer fees).
Buyers search "Colombia payroll mistakes," "how to avoid penalties." Fear-based content drives conversions.
"Contrato Realidad" (Misclassification of Contractors)
Risk Level: HIGH
Hiring full-time employees under independent contractor agreements (Prestación de Servicios) to avoid paying statutory benefits is a major trigger for lawsuits in Colombia. If a worker has fixed hours, company equipment, and subordination, labor courts will rule it a true employment contract, leading to massive back-pay for benefits and social security. Ontop mitigates this by properly classifying workers and providing compliant EOR or verified contractor agreements.
Incorrect IBC (Base Contribution Income) Calculation
Risk Level: HIGH
Colombia’s UGPP (the "Payroll Police") strictly audits social security contributions by cross-referencing data with the DIAN (Tax Authority). A frequent error is failing to include non-salary bonuses that exceed 40% of the employee's total monthly compensation into their taxable base. Ontop’s payroll engine automatically tracks the 40% rule, adjusting the IBC accurately to ensure compliance and avoid UGPP penalties of up to 200%.
Ontop supports payroll for both contractors and employees in Colombia. The platform provides contractor (Prestación de Servicios (Contractor/Independent)) contract templates and full EOR services for employees so you can choose the structure that fits compliance and operational needs.
Ontop applies local employer contribution rules (typically around 8) and sector-specific rates when calculating payroll liabilities. The system presents a clear breakdown of employer charges during payroll preview so you know the total cost before approval.
Yes, mandatory bonus structures like Prima de Servicios are common. The standard structure is 1 month of salary per year (statutory 13th month pay), usually paid in Paid in two installments: 50% by June 30th, 50% by December 20th or prorated across the year. Ontop supports both approaches and reflects proration on employees' payslips and in cost projections.
Employees typically see PILA deductions around 8 and progressive DIAN income tax withholding between 0 - 39 depending on income bracket and region. Ontop calculates and withholds the correct amounts based on salary, location, and personal circumstances.
Yes, Ontop provides cost previews that include employer contributions, taxes, statutory charges (like Cesantías accruals), and regional variation. Use these previews to budget hires accurately and compare contractor versus employee scenarios.
No. Ontop can operate as your Employer of Record (EOR), handling all legal employer responsibilities and registrations. You avoid the complexity and cost of setting up a local company. Alternatively, if you have an entity, Ontop can serve as your payroll processor.
Common risks include misclassifying employees as contractors, missing DIAN payment deadlines, and failing to adhere to Convención Colectiva rules. Ontop's automation and expert support mitigate these risks.
