Work and payroll
How much to charge as a contractor?
The fee that matches a salary, with everything an employee receives and a contractor pays.
The ordinary salary, without the transport allowance.
That of the work: I is office work, V is high risk.
Stop billing for the employee’s 15 business days of vacation: about 3 weeks, 0.74 of a month.
Between one contract and the next, unbilled. The employee is paid all year.
Charge at least, a month
COP 4,311,559
43.7 % more than the salary, billing 11.26 months a year. That leaves you COP 42,811,944 a year, the same as the employee.
| Item | Employee | Contractor |
|---|---|---|
| What is billed a month | COP 3,000,000 | COP 4,311,559 |
| Transport allowance | COP 249,095 | — |
| Allowance not paid during vacation, a year | − COP 185,277 | — |
| Health | COP 120,000 | COP 218,863 |
| Pension | COP 120,000 | COP 280,145 |
| Solidarity Fund | COP 0 | COP 0 |
| Occupational risk | Paid by the company | COP 9,140 |
| Income tax withheld | COP 0 | COP 0 |
| Net a month | COP 3,009,095 | COP 3,803,411 |
| Months billed a year | 12 | 11.26 |
| Bonus, severance and interest, net | COP 6,888,081 | — |
| Net a year | COP 42,811,944 | COP 42,811,953 |
| What it costs whoever hires, a year | COP 51,639,864 | COP 48,531,763 |
How it is worked out
Work out the services fee that leaves you the same in a year as a salary: with the bonus, severance, vacation, social security contributions and withholding, side by side.
A salary and a fee of the same amount do not leave the same. An employee also gets the service bonus, severance with its interest and paid vacation, and pays only 4 % to health and 4 % to pension. A contractor has no benefits and pays 12.5 % health, 16 % pension and occupational risk themselves, on 40 % of what they bill. This finds the fee that, after contributions and withholding, leaves you the same in a year as the salary.
The rules it applies
- The employee: twelve salaries with the transport allowance up to two minimum wages, except during vacation; a 30-day bonus, a month of severance with 12 % interest —exempt up to a salary of 350 UVT— and 15 business days of paid vacation. On an all-inclusive salary, from 13 minimum wages, there is no bonus or severance and contributions go on 70 %.
- The contractor: 12.5 % health, 16 % pension, the Solidarity Fund and occupational risk at classes I to III, on 40 % of the fee, between one and 25 minimum wages.
- Withholding for both comes from the table in article 383, with the 25 % exemption; the contractor gets it by stating in writing that no costs will be deducted. The bonus is withheld on separately.
- To rest as much as the employee, the contractor stops billing for their 15 business days of vacation: about 3 weeks, 0.74 of a month in 2026.
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On a 3 million salary, charge 4,311,559
An employee on 3,000,000 pesos a month takes home 3,009,095 —the 249,095 transport allowance outweighs the deductions, though it is not paid during vacation—, plus a bonus of 3,249,095, severance of 3,249,095 and 389,891 of interest: 42,811,944 pesos a year, with 15 business days of paid vacation.
To be left with the same, a contractor who rests those three weeks has to charge 4,311,559 pesos a month for the 11.26 months they bill: 43.7 % more than the salary. On that fee they pay 218,863 for health, 280,145 for pension and 9,140 for occupational risk, because 40 % of what they bill is below a minimum wage and they contribute on the minimum.
Why the gap is wider on low salaries
A contractor contributes on at least one minimum wage, even when 40 % of what they bill is less, and an employee on a low salary gets the transport allowance, which counts towards their bonus and severance. So matching a minimum wage of 1,750,905 pesos takes a fee of 2,851,200: 62.8 % more.
On high salaries the gap narrows, because the employee pays withholding and the Solidarity Fund too. On a salary of 8 million, the matching fee is 10,854,913, 35.7 % more, and the contractor already has 425,136 withheld a month.
Months without a contract count too
The calculation assumes the contractor rests as much as the employee and stops billing for their three weeks of vacation. If they do not rest and bill all twelve months, 4,075,810 pesos are enough against the 3 million salary: 35.9 % more.
If, as well as resting, they spend a month a year between contracts, they have to charge 4,722,474, 57.4 % more. Months without a contract are the cost most often forgotten when setting a rate.
What each contract costs whoever hires
The 3 million employee costs the employer 51,639,864 pesos a year with contributions and benefits —vacation is paid within the twelve salaries—, for a company exempt from health, ICBF and SENA on salaries below ten minimum wages. The contractor on 4,311,559 costs 48,531,763 for the 11.26 months they bill: even charging 43.7 % more, it comes out cheaper.
That is why a fair rate is not a salary: it is one that covers what the contractor pays and does not receive. A services contract that is a job in practice —with hours, subordination and a single client— is still an employment contract, and the difference can be claimed.
Frequently asked questions
- How much more should a contractor charge than an employee earns?
- It depends on the salary: 62.8 % more on a minimum wage, 43.7 % on 3 million and 35.7 % on 8 million, if they rest as much as the employee and spend no months without a contract. Each month without a contract weighs: on 3 million, a single one a year takes the gap to 57.4 %.
- What if the salary is all-inclusive?
- From 13 minimum wages, 22,761,765 pesos in 2026, an all-inclusive salary is common, and it already includes the benefits: there is no separate bonus or severance and contributions go on 70 %. The tool compares with an ordinary salary unless you mark it as all-inclusive. On 30 million all-inclusive, the matching fee is 34,517,594, 15.1 % more.
- On what amount does a contractor pay social security?
- On 40 % of what they bill each month, before VAT, and never on less than one minimum wage nor more than 25: 12.5 % to health, 16 % to pension and occupational risk for their class. At classes IV and V occupational risk is paid by whoever hires them.
- Is income tax withheld from a contractor?
- Yes, with the same table in article 383 as employees, since Ley 2277 de 2022. If they hand in a written statement that they will not deduct costs or expenses, the 25 % exemption is subtracted too; without it, it is not. On fees up to about 7.4 million a month nothing is withheld: after contributions and the 25 % exemption, the base stays under 95 UVT.
- What about the income tax return?
- This compares what arrives each month after withholding, not the year’s tax, which is settled in the return with all income, deductions and what was already withheld. For most salaries and fees in this range withholding and tax are close, but they are not the same.