All about the minimum wage 2023 in Colombia, including transportation subsidy

How much is the minimum wage in Colombia in 2023?

• Minimum wage in force in 2023: $1,160,000 COP.
• Transportation subsidy in 2023: $140,606 COP.
• Minimum wage with transportation subsidy in 2023: $1,300,606 COP.

Total costs of an employee who earns the minimum wage

It is important to take into account that the employer must pay $1,770,407 COP  per month for each employee earning the current minimum wage.

This is due to the fact that, in addition to what the worker receives, the employer must assume the costs of social security, parafiscal contributions, and social benefits of that worker.

Monthly social benefits costs for a worker earning minimum wage in 2023

• Service bonus: $108,340 COP.
• Severance pay: $108,340 COP.
• Interest on severance payments: $13,001 COP.
• Vacation: $48,372 COP.
• Total benefits: $278,054 COP.

It is important to note that these payments are not made every month. In order to maintain the time unit, the monthly cost was calculated.

With regard to vacations, it was assumed that these are compensated in cash and that the worker does not take the days off. It is true that, if the worker does go on vacation, he/she will not receive salary plus vacation. However, the employer will probably find it necessary to hire a replacement, which will have a similar cost.

Monthly social security costs of a worker earning a minimum wage in 2023

• Health contributions: not applicable, according to Article 114-1 of the Tax Statute.
• Pension contributions: $139,200 COP.
• Labor risks: $6,055 COP.
• Total social security: $145,255 COP.

Monthly costs for parafiscal contributions in 2023

• SENA: not applicable, according to Article 114-1 of the Tax Statute.
• ICBF: not applicable, according to Article 114-1 of the Tax Statute.
• Compensation Fund: $46,400 COP.
• Total parafiscales: $46,400 COP.

The monthly cost for a worker earning a minimum wage ($1,770,407 COP) is the sum of the monthly minimum wage, transportation allowance, social benefits, social security, and parafiscal contributions.

Amount of people earning the minimum wage in Colombia

According to labor market figures presented by the National Government, 15.7% of the employed personnel in Colombia earn a salary equivalent to the minimum wage. This represents around 3.4 million people, out of a total of 22 million workers in the country.

On the other hand, 43.1% of workers earn less than the legal minimum wage in force in Colombia.