How to Pay International Contractors in Colombia [2025]

In Colombia, workers with university degrees increased by 14% from 2009 to 2019, seeking better job opportunities and higher wages. But an economic slowdown in Colombia that began in 2014 caused many of them to look outside their country's borders for more lucrative work. For global employers, this has made Colombia an attractive place to hire employees and contractors who are well-educated and highly skilled.

But as global employment becomes more and more the norm, it's important for international companies to understand the complex nuances of international labor laws. Before you hire a contractor in Colombia, you need to ensure you know enough to comply with Colombian law—to classify them correctly, pay the right taxes, offer the right benefits, and anything else local employment laws require.

So before you sign the paperwork with your first Colombian contractor, read this step-by-step guide. Below, we'll cover some of the basics of how to hire and pay independent contractors in Colombia.

Step #1: Classify your workers in Colombia

One of the most important steps is classifying your Colombian workers—and making sure you do so correctly according to the law. While many companies see hiring contractors rather than employees as a way to avoid payroll taxes, the Colombian Pension and Social Securities Unit (Unidad De Gestión Pensional y Parafiscal or UGPP) has become more aggressive in investigating foreign businesses in an effort to make up a national social security shortfall.

In Colombia, the social security system funds the Family Compensation Fund, Family Welfare, Labor Risk, pensions, national healthcare, and more. Businesses found misclassifying their workers will be ordered to pay back all of their social security contributions and may be subject to late fees and other penalties.

Misclassifying employees as contractors can come with other penalties, including lawsuits from employees, who can take their employers to court for back wages, benefits, legal and administrative fees, and other damages.In Colombia, employment relationships are defined by the Substantive Labor Code (Código Sustantivo del Trabajo), which defines the rights and protections of employees. Independent contractors can be individuals or legal entities who are self-employed. Some of the differences are described in the table below:

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Step #2: Determine the best way to pay your contractors in Colombia

As global employment and remote work have become more common, so have ways to pay workers across international borders. You now have many options for paying Colombian contractors. Here are just a few of your choices:

• Bank wires. If you open a Colombian bank account, you can directly deposit payments into your Colombian contractors' accounts. Or, you can make international transfers from your home bank account. Keep in mind that bank wires can come with steep fees, both for the sender and the receiver.

• International money orders. International money orders have been around for a long time, so most people are familiar with them. The downside? They're slow. You have to physically purchase the money order and your contractor has to deposit it manually once it's received. Using money orders can also be expensive: They usually come with fees and are subject to exchange rates that can fluctuate.

• Digital wallets and payment platforms. Digital payment platforms are an increasingly popular way to pay contractors but note that not every platform is available in all countries (for example, Venmo is only available in the US). It's also important to note that many of these platforms are subject to exchange rates that vary from day to day, which can make it tough to predict your costs.

• Global payroll services. Contractors aren't typically included in payroll since they aren't subject to the same taxes and withholdings as employees. But some payroll services—like Rippling—allow you to pay your contractors alongside your global workforce in one system.

Step #3: Use global payroll software to process payments for Colombian contractors 

As detailed in Step #2, there are several options for paying contractors in Colombia. But the fastest and simplest way is paying international contractors through global payroll software like Rippling.

Rippling allows you to pay contractors around the world in one system. Check out this preview of Rippling's global payroll system:

Step #4: Ensure your Colombian contractor has the right tax information 

As an employer, you aren't required to withhold or pay any payroll or income taxes for your contractors in Colombia. They're responsible for registering themselves, filing the correct forms, filing their tax returns, and paying their taxes by the filing deadlines each year.

Here's what that process looks like:

• The contractor requests a Registro Único Tributario (RUT) form from the DIAN Office. The RUT form contains the contractor's Colombian Tax ID number (Número de Identificacíon de Tributaria or NIT).

• The contractor uses their NIT and ID number to log into the DIAN website and file the relevant form:

  • Form 210: Declaration of Income and Complementary Returns

  • Form 160: Declaration of Assets Abroad

• Once their tax return is complete, the contractor can pay their taxes online, or take their completed forms to any bank to pay the tax due. If no tax is due, they can take their forms to a bank to have them stamped and processed without payment.

Effortlessly manage contractors around the world

Growing your international workforce is easy with Rippling. You can pay international contractors in Colombia and around the world in one system.

Frequently asked questions about running payroll for contractors in Colombia