Employee Benefits in Colombia: What Global Employers Need to Know in 2025
Expanding into Colombia opens the door to a vibrant talent pool and a growing economy, but it also comes with new responsibilities, especially around employee benefits.
While the law requires essential benefits like health insurance, pensions, severance pay, and paid leave, top employers in Colombia often go beyond the basics. By offering flexible work options, wellness programs, and professional development perks, companies can stand out in a competitive market and build long-term employee loyalty.
In this guide, I’ll walk you through everything you need to know about managing employee benefits in Colombia—from eligibility and statutory entitlements to the additional benefits that help attract and retain top talent.
I’ll also explain how partnering with an Employer of Record (EOR) in Colombia can streamline this process, simplifying your expansion journey by simplifying ongoing compliance significantly.
Who Qualifies for Statutory Benefits in Colombia?
In Colombia, statutory employee benefits extend to workers with standard employment contracts, such as full-time, part-time, and fixed-term arrangements. These employees are mandatorily enrolled in Colombia's social security system, providing them with essential benefits like health insurance, pensions, occupational risk insurance and family welfare contributions.
Enrollment in the social security system is required from the first day of employment, ensuring immediate access to these benefits. Employers are responsible for registering their employees and facilitating the necessary contributions.
By making this enrollment mandatory and immediate, employees receive necessary support and financial security, aligning with national standards.
Who Is Excluded?
Some categories of workers are not automatically covered under the standard statutory benefits framework in Colombia, including:
- Freelancers and Contractors: While not enrolled by default, independent workers are legally obligated to contribute to the social security system, covering health, pension, and, in some cases, occupational risk insurance. They must register and make these contributions through the Integrated Contribution Settlement Worksheet (PILA).
- Interns and Agency Temps: Eligibility for benefits depends on the nature of their contractual relationship. If they are engaged under formal employment contracts, they are entitled to statutory benefits. However, if classified differently, their access to benefits may vary.
For comprehensive and up-to-date information on statutory benefit eligibility and obligations, you can consult Colombia's official social insurance authority.
The Role of Collective Bargaining Agreements in Colombia
Before we jump into the details of benefit requirements in Colombia, it’s important that you have a grasp of how collective bargaining agreements (CBAs) work in Colombia, since they play a significant role.
What are Collective Bargaining Agreements in Colombia?
A collective bargaining agreement (convención colectiva de trabajo) in Colombia is a legally binding contract between one or more employers and a labor union (sindicato) that represents a group of employees. These agreements establish the terms and conditions of employment, often above and beyond the statutory minimums set by law.
CBAs in Colombia typically address:
- Wages and bonuses (often above minimum standards)
- Working hours and overtime pay
- Additional paid leave or vacation
- Meal or transportation allowances
- Educational support or scholarship funds
- Health and wellness benefits
- Job security provisions and layoff protocols
- Union rights and dispute resolution mechanisms
In the context of managing employee benefits, you also need to be aware of any CBAs that may exist in your business sector.
In Colombia, CBA agreements are most common in unionized sectors, such as oil and gas, mining, education, transportation, healthcare, and government or public sector work. Currently, research suggests that only 5% of the private-sector workforce in Colombia is unionized.
So, while CBAs certainly exist, they are also not universal across all workplaces, or as prevalent as in other countries, such as within Italy’s employee benefits landscape.
Statutory Employee Benefits in Colombia
Understanding and complying with statutory benefit requirements in Colombia is crucial for employers to avoid legal, compliance, and reputational risks. Non-compliance with these obligations can result in significant penalties and damage to an organization's reputation. Below is a list of the legally required benefits employers must provide in Colombia:
Health Insurance (EPS - Entidades Promotoras de Salud)
Managed through the General System of Social Security in Health (SGSSS), this benefit ensures employees have access to healthcare services, which is vital for maintaining a healthy workforce.
Employers contribute 8.5% and employees contribute 4% of the monthly salary towards this benefit.
Pension Insurance (AFP - Administradoras de Fondos de Pensiones)
Employers contribute to pension funds, providing financial security for employees in retirement. This is administered through a combined approach of employer contributions and public and private fund management.
Employers contribute 12% and employees contribute 4% of the monthly salary to pension funds.
Severance Pay (Cesantías)
Employers are required to contribute one month's salary per year to a severance fund for each employee. This fund assists employees during periods of unemployment or upon termination of employment.
Minimum Wage (Salario Mínimo)
Employers must adhere to the national minimum wage set by the Ministry of Labor, ensuring fair compensation for all employees.
As of January 1, 2025, the national minimum wage is 1,300,000 Colombian Peso (COP) per month. In addition, a transportation allowance of COP 162,000 is mandatory for employees earning up to twice the minimum monthly wage.
Occupational Health and Safety Compliance
Employers must implement an Occupational Health and Safety Management System (SG-SST) to ensure a safe working environment, complying with national safety standards to prevent workplace accidents and promote employee well-being.
Anti-Discrimination Policies
Employers are legally obligated to adhere to policies that prevent discrimination based on gender, race, religion, age, disability, or other protected characteristics, fostering an inclusive workplace.
Paid Leave
We’ll explore these in more detail in the following section, but employees in Colombia are entitled to several types of paid leaves, including 15 days of annual vacation, 18 weeks of maternity leave, and 14 days of paternity leave, all fully paid by the employer.
Public Holidays
Employees are entitled to paid leave on national public holidays, ensuring employees can participate in cultural and family activities.
Colombia observes 18 public holidays annually.
13th Month Salary / Christmas Bonus (Prima de Navidad)
Employers must pay an annual service bonus (Prima de Servicios), which is equivalent to one month's salary but divided into two payments: one in June and one in December. It’s legally mandated by Colombian law.
Since the second half of the Prima de Servicios is paid in December, it’s often informally referred to as a “Christmas bonus,” however, it’s only the second half of the 13th month salary payment. There is no separate or additional 14th month salary or holiday bonus required in Colombia currently.
Transportation Allowance
Colombia offers a transportation allowance for employees earning up to twice the minimum wage. Employees who meet this criteria are entitled to a monthly transportation allowance of COP 162,000 to assist with commuting costs.
Family Compensation Fund (Caja de Compensación Familiar)
The Family Compensation Fund is a mandatory employer-sponsored benefit in Colombia, established under Law 21 of 1982.
This fund is designed to improve workers’ quality of life, particularly for lower-income families, by offering social services and financial support in areas such as housing assistance, education subsidies, recreational service discounts, employment services, cash subsidies for childcare, and other health and wellness programs.
Employers are required to contribute 4% of each employee’s monthly salary to the fund. These funds are then distributed through regional compensation funds (known as cajas).
This table summarizes the most important cajas in Colombia currently:
| Caja | Region or Focus | Services Offered |
| Compensar | Bogotá and surrounding areas | Health services (EPS), education, recreation |
| Colsubsidio | Nationwide | Extensive childcare, education, and housing benefits |
| Cafam | Bogotá region | Recreation centers, housing, educational subsidies |
| Comfama | Antioquia (e.g., Medellín) | Strong regional support in health, employment, and housing |
| Comfenalco | Various regions | Vocational training, health campaigns, vacation subsidies |
Employers must navigate these statutory requirements carefully to ensure compliance. The Ministry of Labor (Ministerio del Trabajo) provides detailed regulations and guidelines that must be followed to ensure lawful employment practices. For more information, you can visit the Ministry of Labor's website.
Other Public Benefits in Colombia
While these next two programs are not technically considered mandatory benefits, they both require mandatory contributions from employers via payroll, making them important to be aware of.
Much like the requirement for employers to contribute to the Family Compensation Fund, employers must also contribute to Colombia’s National Training Service (the Servicio Nacional de Aprendizaje or SENA) and the Colombian Institute for Family Welfare (Instituto Colombiano de Bienestar Familiar or ICBF).
What is SENA?
SENA is a public institution under the Colombian Ministry of Labor that provides free technical and vocational education and job training programs to workers, students, and job seekers across Colombia.
Employers are required by law to contribute 2% of their payroll to fund SENA, which helps finance their training programs and services.
What is ICBF?
The ICBF is a public institution under the Ministry of Labor and Social Protection, created to protect and promote the welfare of children, adolescents, and families in Colombia. It plays a central role in providing nutrition, protection, early childhood education, and family support services—especially to vulnerable populations.
Employers are required to contribute 3% of the monthly payroll to the ICBF.
Leave Entitlements in Colombia
Colombia provides a variety of leave entitlements to support employees' well-being and work-life balance. These national leave policies are well-protected by law, ensuring employees have access to necessary time off.
Below, I’ve outlined the different types of leave entitlements offered in Colombia.
Annual Paid Vacation
Employees are entitled to 15 consecutive business days of paid vacation annually after completing one year of service. This annual leave supports rest and leisure and is administered directly by the employer.
Vacation time accrues proportionally throughout the year, and employees must take at least six consecutive days per year.
Public Holidays
Colombia observes 18 public holidays annually, during which employees receive paid leave. This leave allows participation in cultural and family activities, enhancing societal cohesion.
Sick Leave
In Colombia, employees are entitled to sick leave for up to 180 days. The employer pays for the first two days at two-thirds of the employee's regular salary. From the third day onward, the Colombian health system assumes payment at the same rate (2/3rds of the employee’s salary), funded by social security contributions.
Maternity Leave
Expectant mothers receive 18 weeks of fully paid maternity leave, ensuring time for recovery and bonding with the newborn. This leave includes one mandatory week before the due date and 17 weeks after childbirth.
In cases of multiple or premature births, the leave can be extended by two additional weeks.
This leave is administered by the employer, with social security covering a portion of the compensation.
Paternity Leave
Fathers are entitled to two weeks (14 consecutive calendar days) of fully paid paternity leave, supporting early involvement in childcare. This leave is funded by the health insurance provider (EPS) affiliated with the father.
Parental Leave
While not as extensive as maternity and paternity leave, parental leave may be available under specific conditions, allowing additional time for family care.
Colombia offers shared parental leave, allowing mothers to transfer up to six weeks of their maternity leave to fathers by mutual agreement.
In addition, Colombian labor laws allow parents to work part-time during their leave period, effectively extending the duration of their paid leave.
Colombia's leave entitlements are generous compared to many other countries, particularly in terms of maternity and paternity leave. These policies foster a more productive and engaged workforce by supporting employees' personal needs and well-being.
For detailed information on these leave policies, visit the Ministry of Labor's official website.
Common and Additional Employee Benefits in Colombia
In Colombia, while not mandatory, many employers offer additional benefits to enhance employee satisfaction and retention. These benefits can significantly improve the overall work environment and attract top talent.
In fact, many of the benefits we’ll explore below have become so popular that they’re now commonly expected by Colombian employees, making them essential to stay competitive.
The following is a list of common additional employee benefits offered in Colombia:
- Private Pension Plans: Employers may offer supplementary pension plans to enhance retirement savings beyond the mandatory contributions. These plans are often managed by private pension funds and can provide tax advantages for both employers and employees.
- Supplemental Health Insurance: To provide extended healthcare coverage beyond the basic public system, employers may offer supplemental health insurance plans. These plans can cover additional services, reduce wait times, and may extend coverage to employees' families.
- Company Cars: Some companies, particularly those in remote areas or specific industries, provide company cars or transportation allowances to employees. This benefit facilitates commuting and can be a significant perk for employees.
- Performance Bonuses: Employers often implement performance-based bonuses to incentivize and recognize exceptional work. These financial rewards can be tied to individual, team, or company performance metrics.
- Technology Allowances: To support remote work and ensure employees have the necessary tools, some employers provide allowances for purchasing or maintaining work-related technology, such as computers or software.
- Vacation Bonus: While not mandated by law, some employers offer additional pay during employees' vacation periods as an incentive and to promote rest and well-being.
Offering these supplementary benefits can lead to higher employee engagement and loyalty, making them a valuable investment for employers.
Benefits That Attract Top Talent in Colombia
While not mandatory or legally required, certain benefits are practiced by top organizations in Colombia to enhance competitiveness when sourcing talent. These include wellness programs, flexible work perks, and more.
Below is a list of sought-after benefits offered by leading companies in Colombia:
- Wellness Programs: Companies like MantraCare offer wellness initiatives, including chronic condition management (e.g., diabetes and hypertension), mental health programs, yoga, meditation, and stress management workshops, aimed at improving employee well-being.
- Flexible Work Hours: Offering flexible schedules allows employees to balance work and personal life, increasing job satisfaction and reducing burnout. In fact, flexible work arrangements, including remote work options and compressed workweeks, have become so popular in Colombia now that they are practically expected.
- Telecommuting Options: Many companies provide remote work opportunities, offering employees the flexibility to work from home and maintain a better work-life balance. This approach has been widely adopted in both public and private sectors globally.
- Professional Development Opportunities: Employers often invest in employees' growth through training programs, workshops, and courses, enhancing skills and career progression.
- Employee Assistance Programs (EAP): Services like counseling and support for personal issues are sometimes provided, demonstrating a commitment to employees' mental health and well-being. Many insurance providers in Colombia now offer comprehensive EAP services, including counseling, coaching, and wellness programs.
- Additional Perks: Employers may offer various other benefits to enhance employee satisfaction, including:
- Medical check-ups, such as annual health screenings, to promote wellness.
- Complimentary food and snacks provided during work hours.
- Personal short-term loans without requiring credit checks.
- Birthday leave where employees receive an extra day off to celebrate.
- Educational support, including financial assistance for postgraduate studies, which may also require a commitment to remain with the company for a specified period.
These benefits not only help companies stand out in a competitive job market but also contribute to long-term employee engagement and satisfaction.
According to an industry report, the average cost of such perks in Colombia is approximately $1,800 per year, covering health insurance, retirement plans, and additional benefits. Top employers in Colombia find value in these benefits as they foster a supportive and engaging work environment.
How to Set Up and Manage Employee Benefits in Colombia
Setting up and managing employee benefits in Colombia requires strategic planning and adherence to local regulations.
Here's a brief overview of how companies can effectively establish and administer benefits programs:
1. Partner with Local Benefits Providers
First, you should collaborate with local providers to offer competitive and culturally relevant benefits. This will ensure that your benefits package aligns with local expectations and practices.
Engaging with local experts can also help navigate the complexities of Colombia's social security system, which includes healthcare, pension, labor risks, and family allowances.
2. Ensure Compliance with Ministry of Labor Regulations
Familiarize yourself with the legal requirements set by the Ministry of Labor (Ministerio del Trabajo) to avoid penalties and ensure compliance. This means regularly reviewing regulations to stay updated with any changes.
Recent labor reforms have introduced significant changes, including enhanced employee protections and new standards for teleworking arrangements.
3. Communicate Benefits to Employees
Clearly convey the details of the benefits package to your employees. Use multiple channels, such as meetings, newsletters, and digital platforms, to ensure comprehensive understanding. This is crucial, because transparent communication fosters trust and ensures employees are aware of their entitlements.
4. Monitor and Update Benefits Offerings
Regularly assess the effectiveness of your benefits program and make necessary adjustments. Solicit feedback from employees to ensure their needs are being met and that the offerings remain competitive.
Staying attuned to employee feedback can help in tailoring benefits that enhance satisfaction and retention.
Alternate Option: Use an EOR Service
If you’d like to outsource the entire process of managing benefits in Colombia to a third-party, you may wish to consider partnering with an EOR service in Colombia instead.
EOR services can simplify numerous time-consuming global HR processes for you, including handling onboarding, compliance, payroll, benefits administration, and even Colombian work permit processes. By outsourcing these tasks, you’ll ensure that you meet all legal obligations while offering attractive benefits to your workforce.
Stay Compliant with Local Employment Laws
Ignoring local employment laws in Colombia can lead to serious consequences for your company. It's crucial to follow these rules to avoid issues like employee misclassification and financial penalties.
Here are the risks you might face if you don't comply:
- Employee Misclassification: Mislabeling employees as independent contractors can lead to legal disputes and financial repercussions. Employers found misclassifying workers may be required to pay back wages, missed social security contributions, back taxes, and face additional penalties.
- Underfunding Social Security Contributions: Failing to contribute adequately to the Colombian Social Security System can result in penalties and affect employee benefits. Employers are obligated to make compulsory contributions covering healthcare, pension, labor risks, and family allowances.
- Corporate Fines and Penalties: Non-compliance with labor laws can lead to hefty fines and damage your company's reputation. The Ministry of Labor enforces compliance and can issue sanctions against employers who violate labor regulations.
- Legal Action from Employees: Disgruntled employees might take legal action, costing you time and money. Employees have the right to file complaints with the Ministry of Labor if they suspect wage violations or other labor law infringements.
- Reputational Damage: Non-compliance can harm your brand's image and hinder talent acquisition. Ensuring adherence to labor laws is essential to maintain a positive reputation in Colombia's business landscape.
Staying compliant with local employment laws is essential to protect your business from financial and legal troubles. It ensures smooth operations and a positive reputation in Colombia's business landscape.
Get Support Setting Up Benefits in Colombia
Understanding employee benefits in Colombia is vital for attracting and retaining top talent. Aligning your benefits offerings with legal requirements and employee expectations ensures compliance and satisfaction. Furthermore, offering a well-rounded benefits package can enhance your company's reputation and competitiveness in the job market.
Staying compliant with local laws protects your company from penalties and enhances your reputation as an employer of choice. However, managing ongoing compliance is a big and complex responsibility, especially if you’re new to hiring employees in Colombia.
That’s why many global companies choose to partner with an Employer of Record service, to simplify the process of hiring employees significantly.
If you’re ready to take the next steps, here’s my list of the best EOR providers in Colombia to help you navigate the complexities of benefits management so you can regain peace of mind and time back in your work week for other priorities.
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