It’s official: Colombia’s minimum wage rises 9.5% for 2025

In a significant move aimed at improving workers’ quality of life, President Gustavo Petro officially decreed a 9.5% increase in Colombia’s minimum wage for 2025. 

This change raises the monthly minimum wage from $1,300,000 to $1,423,500. When combined with the updated transportation subsidy, workers earning the minimum wage will now receive a total of $1,623,500.

What does this mean for workers?

After the mandatory deductions for health and pension contributions, employees can expect their biweekly pay to be approximately $746,810. 

It’s important to note that this figure doesn’t include additional earnings from overtime or bonuses for working night shifts.

For those putting in extra hours, here’s a breakdown of the updated rates:

  • Daytime overtime: $7,413 per hour (+25%)
  • Nighttime overtime: $10,379 per hour (+75%)

For a much more complete outlook on the minimum wage increase, we have designed two tables so you can know HOW MUCH IT COSTS TO HIRE AN EMPLOYEE IN 2025,  both for those exempt from contributions and for those not exempt from them. 

And how can you know if you’re exempt from contributions?

Exemption from Parafiscal Contributions and the Health Regime: Who Can Benefit?

In Colombia, there is an important tax relief measure that allows certain companies and employers to be exempt from paying parafiscal contributions and health regime contributions. This measure, designed to promote formal employment, applies under specific conditions explained below:

What contributions are covered by this exemption?

The exemption includes contributions made to:

  • The National Learning Service (SENA).
  • The Colombian Institute of Family Welfare (ICBF).
  • Contributions to the Contributory Health Regime.

Who can access this exemption?

  1. Corporations and legal entities subject to income tax:
    • These entities are exempt from the specified contributions for workers earning less than ten (10) current legal monthly minimum wages (SMLMV).
  2. Natural persons employing workers:
    • They also qualify for the exemption if their employees earn less than 10 SMLMV.
    • Exception: This exemption does not apply to individuals employing fewer than two workers. In such cases, they must continue paying the required contributions.

This measure provides significant savings while encouraging formal employment. If you’re an employer, consult your tax advisor to determine whether you qualify and ensure compliance with the applicable regulations.

Monthly cost for 2025

Employee earning one minimum wage

EMEMPT FROM CONTRIBUTIONS

SALARY1.423.500,00
TRANSPORTATION ALLOWANCE200.000,00
HEALTH-
PENSION170.820,00
ARL (Maximum rate 6,96%)99.075,60
FAMILY COMPENSATION FUND56.940,00
BONUS135.286,26
SEVERANCE135.286,26
SEVERANCE INTERESTS16.234,35
VACATION59.359,95
WORK SUPPLIES100.000,00
TOTAL EMPLOYEE COST PER MONTH$2.396.502,41 COP

Monthly cost for 2025

Employee earning one minimum wage

NOT EMEMPT FROM CONTRIBUTIONS

SALARY1.423.500,00
TRANSPORTATION ALLOWANCE200.000,000
HEALTH120.997,50
PENSION170.820,00
ARL (Maximum rate 6,96%)99.075,60
FAMILY COMPENSATION FUND56.940,00
SENA28.470,00
ICBF42.705,00
BONUS135.286,26
SEVERANCE135.286,26
SEVERANCE INTERESTS16.234,35
VACATION59,359,95
WORK SUPPLIES100.000,000
TOTAL EMPLOYEE COST PER MONTH$2.588.674,91 COP

Reactions to the increase

President Petro emphasized that the wage hike reflects his administration’s commitment to enhancing the living standards of Colombian workers. 

However, not everyone is celebrating. Some business groups have raised concerns about the potential economic repercussions, warning that higher labor costs could lead to job cuts or increased prices for consumers.

The new minimum wage takes effect on January 1, 2025. 

Whether you’re an employer, employee, or just curious about how this change impacts Colombia’s economy, stay informed and plan accordingly!

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What will happen after you fill out this form? ​

After submitting the form, your case undergoes a comprehensive review by our team of specialist to assess its viability. Providing clear and concise information about your objectives accelerates this process.

Subsequently, a specialist will be assigned to your case, reaching out to you within a day to clear up details about your case and outline the next steps to help you achieve your goals.

Get started with a free case assessment ​

What will happen after you fill out this form? ​

After submitting the form, your case undergoes a comprehensive review by our team of specialist to assess its viability. Providing clear and concise information about your objectives accelerates this process.

Subsequently, a specialist will be assigned to your case, reaching out to you within a day to clear up details about your case and outline the next steps to help you achieve your goals.

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