How to hire employees in Colombia through an employer of record (EOR) [2024]

Step #2: How to choose the best EOR for your business

Before you choose a platform, you should consider the services you will need, and how much you plan to grow your global hiring presence.

• Is the EOR active in the countries in which you need to hire? This is the first step in selecting an EOR. 
• Does the EOR own its own entities in the countries it services? If the EOR provider doesn’t own the entities, they’re likely partnering with a local or third-party provider.
• How does the EOR protect your sensitive and confidential information? It’s crucial that your EOR has the proper data protections in place, along with secure technology that eliminates the risk of private information being disclosed.
• Does the EOR offer automated solutions? You may want to look for an EOR that automates the busy work like onboarding and benefits enrollment and other common HR and IT tasks.
• What is the EOR’s support model? Make sure your EOR has support staff available that are easy to reach and experts in the regulations of the country in which you’re hiring.

Get the full checklist in our guide: What is an EOR?

Step #3: How to hire and onboard your Colombian employees

Once you’ve picked an EOR service that works in Colombia, it's time for the next step in the hiring process: onboarding your new employees. To do so, you'll need to collect some personal information from them:

• Name
• Date of birth
• Address
• Passport
• Bank account information
• Social Security system registration
• Enrollment in public health insurance
• Enrollment in a severance fund
• Insurance or professional risk under their employment contract

You'll also need to send your new employee an employment agreement that outlines their role and key working conditions. In Colombia, a written employment agreement isn't required, but it's still a best practice—and certain working conditions and stipulations must be in writing, including:

• Probation periods
• Fixed-term contracts
• Integral salary (benefits that are included in the salary)
• Non-salary payments

An EOR can automatically localize and distribute employment agreements that comply with local laws and regulations, ensuring that every employee you hire in Colombia will have a legally compliant contract to cover statutory requirements like probationary periods, working hours, working days, minimum wage, benefits, annual leave, maternity and paternity leave, and termination policies like notice periods and severance pay.

Step #4: Run payroll

Once you've collected the right payroll information and you and your new hire have both signed the employment agreement, it’s time to set up payroll. An EOR will pay your Colombian employees in Colombian pesos (COP), while withholding legally required taxes so you stay in compliance with local tax and employment laws. This includes contributions to:

• The pension fund
• Medical plans
• Labor risk
• Family compensation funds

Frequently asked questions about hiring through an EOR in Colombia

How much does an EOR cost?

There are two common pricing structures for an EOR:

• You pay a fixed monthly fee per employee.
• You pay a percentage of payroll plus applicable taxes.

With either pricing structure, you may also be charged administrative fees, onboarding charges, costs for supplemental features, and other fees. If you’re mindful about pricing, keep in mind that you don't need to use an EOR for your entire workforce—you can choose to use it for a portion of your workforce, and you'll only be charged for the employees you employ through the EOR.

What is the difference between an EOR and PEO?

With the rise in global (and remote) employment, we've seen the emergence of many different types of tools for international payroll, human resources, benefits administration, and workforce management.

One of which is a professional employer organization (PEO). A PEO acts as a co-employer for your international employees, providing some administrative services like running payroll, filing taxes, and handling compliance. But a PEO doesn't allow you to hire employees in a country where you haven't set up your own entity. And when you use one, your company and the PEO are jointly responsible for your workforce and liable for compliance issues.

On the other hand, an EOR allows you to hire employees without setting up your own entity, and it assumes all the compliance liability on your behalf as the sole employer of the portion of your workforce employed through it.

Does an EOR protect your sensitive and confidential information?

Using an EOR to hire employees in another country can help you save time and protect you from compliance liability. But if your EOR uses third-party vendors, sharing your data with it could leave you exposed to breaches from manual uploads.

That's why it's important to seek out an EOR that prioritizes data protection. Some green flags to look out for are:

• Compliance with industry-standard privacy regulations in different countries
• Secure infrastructure with 24/7 maintenance
• Well-vetted personnel

Does an EOR help with Colombian tax filings?

An EOR is one way to streamline tax filing in Colombia—some EOR services can automatically calculate and file taxes for you.

What are the mandatory benefits for Colombian employees?

In Colombia, employees are entitled to certain benefits under labor and employment laws. These include:

• Pension
• Survivors’ benefits
• Short- and long-term disability
• Healthcare
• Paid leave, including vacation, maternity leave, sick leave, bereavement leave, and more
• 13th-month salary, paid in two installments totaling the employee's monthly wage
• 18 public holidays, including:
• New Year's Day
• Epiphany
• St. Joseph's Day
• Holy Thursday
• Good Friday
• Labor Day
• Ascension of Jesus
• Corpus Christi
• Sacred Heart
• St. Peter and St. Paul
• Independence Day
• Battle of Boyacá
• Assumption of Mary
• Columbus Day
• All Saints' Day
• Independence of Cartagena
• Feast of the Immaculate Conception
• Christmas

What are the employer costs for full-time employees in Colombia?

Employers must deduct certain contributions from their full-time employees' paychecks. See the full details below: