Colombia Payroll & HR Glossary
Clear definitions of the payroll and human resources terms in Colombia, from prestaciones sociales (statutory benefits), the prima and the cesantías to retención en la fuente (withholding tax) and the UVT.
Prestaciones sociales
Payments on top of salary that the law requires: prima, cesantías, interest on cesantías and vacation.
Prima de servicios
A benefit equal to one month of salary per year, paid in two instalments: June and December.
Cesantías
A benefit of one month of salary per year deposited in a fund, as savings against unemployment.
Retención en la fuente
The advance payment of income tax that the employer deducts from salary and transfers to the DIAN (the tax authority).
Salario mínimo
The Salario Mínimo Mensual Legal Vigente (SMMLV), the lowest pay allowed, set each year.
UVT
The Unidad de Valor Tributario (tax value unit), a reference updated every year to standardize tax amounts.
Aportes a seguridad social
The worker's deductions for health (4%) and pension (4%), complemented by employer contributions.
Liquidación
The final payment when the contract ends: accrued benefits, vacation and pending salary.
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