Colombia Severance Pay Calculator
This calculator estimates the severance settlement (liquidación) of an indefinite-term contract in Colombia under the Labor Code. It adds the pending social benefits —severance fund (cesantías), interest on the fund, service bonus (prima) and vacation pay— and, if the exit was a dismissal without just cause, the corresponding compensation. Enter your monthly salary, the start and end dates of the contract, whether you received the transport allowance and the type of termination to see the breakdown and total.
Simplified estimate based on Colombia's Labor Code (indefinite-term contract) and the 2026 minimum wage of $1,750,905 and transport allowance of $249,095. It uses the 360-day commercial year. It ignores surcharges, overtime, commissions, garnishments and individual deductions. This is not a definitive legal figure: consult a labor lawyer or the Ministry of Labor.
Total severance
Severance fund (cesantías)
Interest on severance fund
Service bonus (prima)
Vacation pay
Compensation (indemnización)
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How it works
The calculation base is the monthly salary plus the transport allowance, which in 2026 is $249,095 and is only added if the worker earns up to 2 minimum wages ($3,501,810). The severance fund (cesantías) equals the base multiplied by the days worked in the year divided by 360. Interest on the fund is 12% per year of the cesantías, prorated by days. The service bonus (prima) is the base times the days of the half-year divided by 360. Vacation pay is calculated on the salary (without the allowance) times the days worked divided by 720. If there was a dismissal without just cause on an indefinite contract with a salary below 10 minimum wages, a compensation of 30 days of salary for the first year plus 20 days for each additional year, prorated by fraction, is added.
Example settlement for one year worked
To see how a settlement is built up, take an example: a worker on a salary of $2,000,000 a month who receives the transport allowance ($249,095), after one full year of an indefinite contract, dismissed without just cause. The benefits base is salary plus allowance ($2,249,095), except for vacation, which is settled on the salary alone. This is the breakdown:
| Item | Calculation | Value (COP) |
|---|---|---|
| Severance fund (cesantías) | Base × 360/360 | $2,249,095 |
| Interest on the fund | 12% of the cesantías | $269,891 |
| Service bonus (prima) | Base × 360/360 | $2,249,095 |
| Vacation pay | Salary × 360/720 | $1,000,000 |
| Compensation (30 days) | Dismissal without just cause | $2,000,000 |
| Total | $7,768,081 |
Reference values 2026 and dismissal compensation
The settlement uses the monthly minimum wage (SMMLV) and the transport allowance set for 2026 by decrees 1469 and 1470 of 2025. The allowance is only added to the cesantías and prima base when the worker earns up to 2 minimum wages. Compensation for dismissal without just cause on an indefinite contract depends on the salary: below 10 SMMLV it is 30 days of salary for the first year plus 20 days for each additional year; at 10 SMMLV or more it is 20 days for the first year plus 15 for each following year. If the dismissal is for just cause (art. 62 of the Labor Code) or the worker resigns, there is no compensation, but the accrued social benefits are always paid.
| Item | 2026 value |
|---|---|
| Minimum wage (SMMLV) | $1,750,905 |
| Transport allowance | $249,095 |
| Allowance ceiling (2 SMMLV) | $3,501,810 |
| Compensation threshold (10 SMMLV) | $17,509,050 |
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Preguntas frecuentes
- What does severance pay in Colombia include?
- It includes the pending social benefits: severance fund (cesantías), interest on the fund, service bonus (prima) and unused vacation. If the contract ended in a dismissal without just cause, a compensation is also added.
- How is the severance fund (cesantías) calculated?
- The cesantías equal one month of salary per year worked. They are calculated as the base (salary plus transport allowance, if applicable) multiplied by the days worked in the year and divided by 360.
- Does the transport allowance count in the settlement?
- Yes, it is part of the base for cesantías and the service bonus, but only for those earning up to 2 minimum wages. In 2026 the transport allowance is $249,095 per month. Vacation pay is settled on the salary alone, without the allowance.
- How much is compensation for dismissal without just cause?
- On an indefinite-term contract with a salary below 10 minimum wages, the compensation is 30 days of salary for the first year plus 20 additional days for each following year, prorated for the fraction of a year. If you resign voluntarily, there is no compensation.
- Which minimum wage is used in 2026?
- The current legal monthly minimum wage (SMMLV) in 2026 is $1,750,905, set by decrees 1469 and 1470 of 2025. The 2-minimum-wage threshold for the transport allowance is $3,501,810.