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Colombia is one of Latin America’s most-watched economies for its international expansion efforts. With a well-diversified base of energy, services, manufacturing, and a growing tech sector, this diversification has paid dividends, leading to Colombia’s 2023 GDP reaching $363.49 billion. Today, it’s now the region’s fourth-largest economy.
According to the latest regional outlook, Colombia’s economy is expected to grow by 2.5% in 2025, which is around the South American average, as geopolitical challenges and a widening deficit hit. Despite this, the fundamentals make Colombia an ideal location for foreign businesses and investors.
In this guide, we discuss how businesses can benefit from using the Colombia Professional Employer Organization (PEO) model, what it is, and some of the rules and regulations your PEO can help you navigate as you build your team.
Deciding to work with a Colombia Professional Employer Organization, or PEO, means you’re entering into a co-employment relationship. Your local entity stays as the employer of record on paper, but your PEO partner manages HR and payroll in line with Colombia’s array of labor and tax regulations.
It’s not the same as an Employer of Record (EOR), where you’re not the legal employer and don’t need to have an entity already established in the country. A PEO requires you to have this entity already, but the extra hassle sets the stage for building an in-house team later down the line.
Some of the tasks a PEO can help with include:
The purpose behind outsourcing these functions from your back office is to redirect your resources towards building your team and expanding within the country. Additionally, they handle compliance, meaning you’re not going to fall foul of the latest rules and regulations.
The biggest compliance risks and drains on your resources are in the HR and payroll departments. Moving into a new market means you’re faced with an array of headaches that you don’t need, and this is what your PEO is there to help with.
Whether you’re running a global operation or entering South America for the first time, we’ve investigated the market to determine the best PEO companies in Colombia now. Our leading choices are:
You’re not going to find a PEO that’s the absolute best in every single business situation. Your choice depends on what you need and the type of service you’d like. Let’s go into more detail regarding each of the best Colombia PEOs.
For hands-on support, it’s difficult to beat Remote People. They operate a high-touch service that does away with generic platforms and focuses on actively mapping our processes via their network of HR and payroll specialists fluent in Colombian law and employment practices.
Remote People is well-known for helping their clients get up and running quickly, negotiating everything from social security registration to drafting legally valid employment contracts. Additionally, their strong focus on compliance gives you peace of mind that you’re not going to run into trouble later.
If you’d like to learn more about the white-glove style service on offer, read our complete Remote People review.
| Pros | Cons |
|---|---|
| On-the-ground HR and payroll expertise | Smaller global footprint |
| High-touch service | Fewer advanced integrations |
| Compliance-first approach | Â |
Payment orchestration across multiple countries is a massive challenge for global operations, which is where Papaya Global excels. Its primary strength is in payroll consolidation via an analytics-infused platform, but it also offers a raft of general PEO capabilities.
When you work with Papaya Global, they’ll help you configure a payroll engine that aligns with Colombia’s rules and regulations. They will integrate this into a global payments infrastructure that empowers you to master payroll as efficiently as possible.
If you’re a large, distributed team requiring more visibility, read our full Papaya Global review for more information.
| Pros | Cons |
|---|---|
| Ideal for data-driven HR and payroll teams | Too heavy for smaller companies |
| Eliminates the need for local payroll vendors | Less Colombia-specific HR support |
| Mature payments infrastructure | Â |
Lean, remote-first startups often lack dedicated PEO choices, which is why Oyster HR is such a top choice among Colombian PEOs. The platform is based on the philosophy of simplicity, with straightforward workflows, self-serve capabilities, and transparent pricing.
Oyster HR incorporates a dedicated Colombia country hub to help you understand core employment rules without the legalese. It also comes with automation capabilities to deal with routine tasks, thus minimizing the strain on your internal HR team.
Although it lacks in areas like enterprise governance, startups and remote-first teams have much to gain. If you’d like to learn more, read our Oyster HR review today.
| Pros | Cons |
|---|---|
| Easy to adopt for small teams | Limited ability to deal with complex operations |
| Colombian employment framework explained in plain English | Lack of advanced governance tools |
| Quick implementation | Â |
Global enterprises seek standardization through their employment practices to reduce headaches, and G-P are the undisputed specialists in this area. Although they originally started as an EOR, they’ve expanded their capabilities to include PEO services.
G-P works with its clients to align local processes with its global frameworks. With an array of AI-powered tools, including G-P Meridian, your HR team is fully equipped to deal with issues like compliance and risk.
To learn more about this enterprise-grade PEO, check out our full G-P review now.
| Pros | Cons |
|---|---|
| Perfect for enterprises seeking global standardization | Higher pricing |
| Exceptional governance features | It may be too heavy for regional operations |
| Intuitive UX for managing larger workforces | Â |
Larger organizations operating using multiple employment models often find that generic tools don’t work, but Safeguard Global is one of the few capable of supporting more complex enterprises. Key to their success is their focus on governance, audit trails, and multi-model management.
Within the Colombian market, Safeguard Global is among the best when it comes to centralizing workforce data while ensuring local nuances are accounted for. They can handle both PEO and EOR simultaneously, which is why so many of their clients begin with EOR services before migrating to PEO services under the same umbrella.
If you’d like to learn more about the functions they fulfill, read our complete Safeguard Global review now.
| Pros | Cons |
|---|---|
| Designed around the needs of multi-jurisdictional companies | Resource-intensive implementation |
| Single umbrella for all workforce models | Limited pricing transparency |
| Robust executive-level reporting and governance features | Â |
Not every business needs a high-touch service. For these companies, Deel offers a product-led PEO experience that leans heavily into automation. With a unified interface bringing your entire global operation into a single dashboard, managing your organization at a global level becomes infinitely more streamlined.
Despite focusing more on a product-led PEO service, Deel still includes all the services you would expect, including employment contracts, minimum wage validation, and a compliance engine that’s well-tuned for the specifics of the Colombian employment framework.
If you want to know more about what they can do for you, read our detailed Deel review now.
| Pros | Cons |
|---|---|
| Automation-focused workflows | Limited support for edge cases requiring human intervention |
| Easily handles multi-country stacks | Pricing can climb quickly with add-ons |
| Polished UX for your HR team | Â |
Working with a PEO is designed for when you already have a local entity on the ground in Colombia. Ultimately, you’re becoming the legal employer, whereas your PEO joins you to transform it into a co-employment relationship to reduce the load on your back-office personnel.
So, what are the advantages of moving into the Colombian market with the support of a PEO?
Choosing to work with a PEO doesn’t mean you’re committed to this model for years to come. If you want to move everything in-house later, any reputable PEO will be happy to provide migration support to manage the transition.
Colombia’s labor framework is increasingly leaning towards more worker protections, especially in the aftermath of the COVID-19 pandemic. The grounding force of the country’s labor framework is the Código Sustantivo del Trabajo (CST), which has been supplemented several times with additional laws and reforms.
The Ministerio del Trabajo is responsible for issuing guidance, conducting inspections, and, ultimately, ensuring that workers’ rights are respected. The costs of non-compliance can be punishing, which is why we’ve provided a basic guide on the most important elements of Colombian labor law.
Nearly all Colombian employment relationships have a written contract in place. In principle, contracts aren’t mandatory, but in practice, you’ll be using one of three contract types:
All employment contracts should include certain pieces of information, such as job title, duties, work location, salary, working hours, benefits, probationary periods, and termination/severance clauses.
Note that although most foreign companies will offer bilingual contracts in Spanish and English, the former takes precedence in the case of a dispute. Your PEO will ensure all contracts are legally valid and correctly understood by staff, whether they’re local or foreign hires.
Previously, Colombia used the 48-hour work week of eight hours a day spread over six days. With the implementation of Law 2101, this has been steadily reduced, without a salary reduction, to 42 hours, which is expected to be completed in 2026.
Daily working time is capped at eight hours, and overtime requires employee consent. This is also capped at two hours per day and 12 hours per week. All overtime, night work, Sunday work, and work on public holidays must be paid with a statutory surcharge. Currently, this is 125% of gross hourly wages for daytime overtime and 175% for all other forms of overtime, including night work.
It should also be mentioned that Colombia is also in the process of implementing a time-tracking system requirement using the European Union (EU) template.
Colombia determines its minimum wage annually through tripartite negotiations among the government, employers, and trade unions. In 2025, the monthly minimum wage is COP 1,423,500, representing a 9.5% year-on-year increase. Eligible workers are also entitled to a mandatory transport allowance of COP 200,000.
However, although the minimum wage is low by Western standards, skilled professionals typically earn multiple times more. That’s why working with a PEO is essential for benchmarking your job openings with market norms.
Statutory benefits are a reality of the Colombian workplace. These are required by law, so you’ll need to bake them into your company’s policies with the support of your PEO. Generally, the benefits you’ll have to account for are:
Colombia’s generous benefits system focuses on supporting workers in a variety of ways, but it does place immense burdens on businesses. A PEO helps you budget for these benefits and configures your payroll to pay them out.
Colombia utilizes a pay-as-you-earn system mixing employer and employee social security contributions. The key aspects you’ll need to factor into your costs include:
Note that you’ll be under the monitoring of the Unidad de Pensiones y Parafiscales (UGPP). Making incorrect contributions or misclassifications can result in significant penalties. It’s your PEO’s job to reduce your audit exposure and sift through the complex rules involved in the Colombian social contributions system.
Rules on termination depend on whether an employee was dismissed with or without cause. Additionally, the employee’s contract type and tenure will impact what happens in each situation.
The key point to remember is that there’s no universal notice period. Instead, it depends on the employment contract and the company’s policies. Severance is handled via the universal severance fund. Employers are required to contribute one month of salary per year of service, payable when employment ends.
If an indefinite-term employee is terminated without cause, companies are required to pay an extra indemnity. The formula is nuanced, especially for higher earners. Still, an employee earning less than 10 minimum wages will equal about 30 days of salary in the first year, plus 20 extra days per extra year of service.
Colombia’s migration policies have moved to a more welcoming posture, particularly for those who are exceptionally skilled or work in sectors where there are local shortages. If you choose to hire foreign workers, you’ll be working with both Migración Colombia and the Ministerio del Trabajo throughout the process.
Several visa types are available for bringing in foreign workers, and they’re usually tied to a specific employer. In terms of your obligations, you must align both pay and conditions with local standards, ensure both the worker’s visa and work contracts are registered with the authorities, and take steps to guarantee equal treatment.
PEOs are your partner in establishing footholds in new markets. Colombia’s solid, consistent growth trajectory and increasingly deep pool of skilled workers make it an intriguing proposition for organizations looking at international expansion.
However, the downside with Colombia is that its evolving labor framework and complicated social security system mean that foreign businesses often struggle to adapt. Colombian PEOs are there to support you in tapping into this market and minimizing your compliance risk.
If you want to learn more about what PEOs can do for you in Colombia, RemotePad provides instant access to global hiring and PEO specialists. Take the first step to hiring a PEO in Colombia and contact us today.
Not at all. Some PEOs offer in-house recruitment services, where they’ll help you source candidates, whereas others may offer partnerships with in-country recruitment agencies to help. Generally, the focus is on HR and payroll, and your PEO only becomes a co-employer after you’ve already hired your favored candidate.
Colombian PEO pricing is often bespoke, meaning you’ll receive a tailored quote after your initial consultation. Factors that play into how much it could cost you include the number of employees, operational complexity, and how many additional services you need.
Typically, most PEOs will charge based on a per-employee, per-month model. Some may also levy implementation fees. That’s why, when you contact a PEO, you should ask for a fully itemized breakdown of what their services cost.
