Workforce Payments Guide Colombia

Last updated: Dec 27, 2023

Colombian Peso (COP)
Payroll Frequency
Fiscal Year
1 January- 31 December
Employer Taxes
21.02% - 27.46%
Employee Costs
Central Bank
Banco de la Republica
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3rd Party Payments

Authority Payment Frequency Due Date Payment Method
Corporate Income Tax (CIT) for Large Taxpayers  Three instalments over the year  Usually in February, April, and June  Direct 
Corporate Income Tax (CIT) for Other Taxpayers  Two instalments over the year  Usually in April and June  Direct 
Withholding Tax (WHT) for Corporate Entities  Monthly  Within two months from the due date of submission  Direct 


Payments Coverage

Papaya Global supports Payroll payments in Colombia, payments to the authorities are done directly by the clients.

Contractor Payments

Papaya Global supports payments to contractors in Colombia. The payout currency may vary based on the receiver bank account setup when receiving foreign currencies. It is advised for contractors to reach out to their bank to confirm how foreign currencies are handled

Payroll Frequency



In Colombia, the Know Your Customer (KYC) process is a crucial procedure for businesses, particularly financial institutions, to mitigate potential risks and prevent criminal activities such as money laundering or terrorism financing.

The KYC process involves a thorough understanding and identification of the natural and legal entities that businesses are in a contracted business relationship with, as well as the origin of their funds. It is mandated by the Financial Superintendence and the Superintendence of Companies, in line with guidelines from the Financial Action Task Force (FATF).

The KYC process in Colombia includes several crucial steps. First, the verification of the validity and authenticity of identification documents, such as national ID, foreign ID, or passport. This is a prerequisite for accessing most banking services.

Next is the background check, which includes judicial, sanctions, disqualifications, and credit history. This step validates a previous positive relationship with the bank and ensures that the individual has not been involved in illegal activities.

Further, Customer Due Diligence (CDD) requires the business to obtain adequate knowledge of their clients, including consulting restrictive lists issued by national and foreign authorities related to Colombians.

This also includes the collection and validation of documents based on policy requirements, and the gathering and interpretation of data from trusted internal and external sources. Enhanced Due Diligence (EDD) is applied to certain types of clients, like politically exposed persons (PEPs), who demand more controls.

Continuous monitoring of variables such as transactional behavior and geographical location is also necessary to keep risk models updated. Banks must also assign customers a risk rating to assess how to monitor the account and determine which customers pose too significant a risk to accept as new customers.

The bank must document and store the relevant records of all customers, including the nature and size of their financial transactions, their account type, the reason for their account, and the origin of their funds.

This process is carried out with the help of trained professionals, global service delivery centers, and advanced technologies. Colombia is also planning to simplify the KYC procedures by allowing more technology to streamline verification processes in fintech and other sectors, including advancements like process automation and blockchain for verification.

Compliance with local privacy regulations is also crucial, ensuring respect for the privacy of customers while ensuring a minimum level of quality and completeness of data to properly evaluate risk.

Banking Regulations

Cross-border payments, including workforce payments, are transactions involving individuals, companies, banks, or settlement institutions operating in at least two different countries. In Colombia, these payments face challenges such as high costs, low speed, limited access, and a lack of complete transparency.

The most prevalent cross-border payment methods encompass bank transfers, credit card payments, and alternative payment methods, including eWallets and mobile payments. However, employers must comply with tax and labor laws in several countries, deal with foreign currency exchange rates, and navigate varying banking regulations.

For instance, currency exchange rates can be a significant challenge when it comes to cross border payroll payments. Employers must convert the currency they’re using to the currency of the country where their employee is based, which can result in additional fees and transaction costs.

Moreover, different countries have different legal and regulatory requirements that must be met when making cross border payroll payments. For example, some countries require certain types of payment methods, such as bank transfers or electronic payments, while others allow for other payment options.

In Colombia, unless the law specifically permits otherwise, the general rule is that payments between Colombian companies or individuals must be made in Colombian pesos, or through clearing accounts.

Bank Account Opening

To open a company bank account in Colombia, the following requirements need to be met:

1. Obtain a pre-taxpayer ID number (pre-RUT) from the DIAN.

2. Provide a Colombian identification card, the cedula.

3. Submit the application form and the articles of incorporation.

4. Provide identification documents of the shareholders and legal representatives.

5. Submit the existence certificate from the Chamber of Commerce, verifying the existence of your company in Colombia.

6. Provide the tax certificate (NIT).

7. Submit the opening balance sheet of the company.

8. Be prepared to make a minimum deposit, the amount of which may vary from bank to bank.

9. Provide correctly the data and documents requested by the bank, as they often request information to identify the final owners.

10. Appoint a legal representative who is responsible for company operations, authorizing tax declarations, and signing all contracts and legal documents. This representative may sometimes be required to meet with the bank officials for opening the account.

All documents must be signed with wet ink and delivered to the bank both digitally and physically. Foreigners can have access to the bank account if they have the capacity of a legal representative of the company or have banking powers provided by the legal representative to manage the account.

The process to open a company bank account in Colombia can take from 2 weeks to a month on average. This time frame depends on the speed with which the company provides the needed documents and also on the local bank chosen by the company.

International Banks

The major foreign banks operating in Colombia include:

  • BBVA Colombia S.A. (a subsidiary of Spanish BBVA Group),
  • Scotiabank Colpatria S.A. (a subsidiary of Canadian Scotiabank),
  • Itau CorpBanca Colombia S.A. (a subsidiary of Itau Unibanco, the largest bank in Brazil and Latin America),
  • BNP Paribas Corporacion Financiera S.A.,
  • Bank of America N.A.,
  • Barclays Bank plc,
  • Bank Julius Baer & Co Ltd,
  • Banco de Sabadell S.A.,
  • Banco General S.A.,
  • Banco de Credito e Inversiones,
  • Bank of New York Mellon,
  • Caixabank S.A.,
  • Commerzbank A.G.,
  • Credit Suisse AG,
  • Credit Agricole Corporate and Investment Bank,
  • Deutsche Bank A.G.,
  • JPMorgan Chase Bank, N.A.,
  • HSBC Bank USA, N.A.,
  • MUFG Bank, LTD,
  • Mizuho Bank LTD,
  • Natixis CIB Americas,
  • Societe Generale,
  • Standard Chartered Bank,
  • Sumitomo Mitsui Banking Corporation,
  • UBS AG,
  • Wells Fargo Bank,
  • National Association,
  • Citibank,
  • HSBC,
  • Banco Santander

Local Major Banks

The major local banks operating in Colombia are:

  • Bancolombia S.A.
  • Banco de Bogota S.A.
  • Banco Davivienda S.A.
  • BBVA Colombia S.A.
  • Banco de Occidente S.A.
  • Scotiabank Colpatria S.A.
  • Itau CorpBanca Colombia S.A.
  • Banco GNB Sudameris S.A.
  • Banco Popular S.A.
  • Banagrario
  • Bancamia
  • AVVillas
  • Caja Social
  • Colmena
  • Citibank Colombia
  • Procredit
  • RBS Colombia
  • HSBC Colombia

Payment Tools

The B2C payment tools available in Colombia include:

  • Bank transfers through the PSE banking system,
  • Cash payment options such as Efecty, Baloto, SuRed, and Gana,
  • Credit, debit, and prepaid cards like MasterCard, Visa, and American Express.

Additionally, digital wallets, mobile phone payments, online or mobile payment types, QR code payments, and a cash-based payment solution called Baloto Electronico that allows customers to use vouchers to pay both in-store and online are also available.


In Colombia, the legal environment towards cryptocurrencies is quite restrictive. The Financial Superintendence of Colombia (SFC) has virtually prohibited banks from providing financial services to cryptocurrency companies. Consequently, cryptocurrency firms in Colombia may not utilize banking institutions. Colombian officials declared in 2014 that regulated financial institutions shall not possess or invest in cryptocurrencies.

Colombia’s central bank, Banco de la Republica, declared that cryptocurrencies are not classified as “legal tender”. This declaration is inconsistent with Colombian law considering cryptocurrency can act as a means of payment and can act as a “deposit of value” as well as a “unit of account”. According to Colombia’s regulations, cryptocurrencies also cannot be categorized as “money”. In addition, the Financial Superintendence of Colombia (SFC) proclaimed that cryptocurrencies are not classified as “currency”.

Therefore, while it might technically be possible to pay employees in cryptocurrencies, it would likely be challenging due to the restrictive legal environment and the lack of support from banking institutions.

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