What is Retención en la fuente?
Retención en la fuente (withholding tax) on salaries is a mechanism for prepaying income tax: the employer refines the base (subtracting contributions and a 25% exempt income) and applies the table of Art. 383 of the Estatuto Tributario, expressed in UVT.
Many salaries end up at zero after the refinement, because the table only taxes amounts above 95 UVT per month. Deductions such as dependents reduce the base even further.
In practice
From a high salary, contributions and the 25% exempt income are subtracted; if the base exceeds 95 UVT, the corresponding percentage is applied and deducted from payroll.