Cesantías in Colombia: a severance guide for employers

Every February, a foreign finance team with staff on the ground in Colombia hits the same cash surprise: depositing cesantías for every worker into a fund at once, on top of a separate interest payment due just two weeks earlier. If the monthly accrual was not tracked properly during the year, the February bill lands larger than planned.

At Soulbit Academy we cover cesantías from the employer's side, not from the worker's side looking for how to withdraw it for housing or education. The goal is for a finance team managing payroll in Colombia, whether directly or through an employer of record, to know how much to accrue each month, which date pays what and to whom, and what happens if a deadline slips. This does not cover the partial withdrawal process a worker files with their own fund, a separate procedure the employer does not control.

What cesantías is and what an employer must accrue every month

Cesantías is a statutory severance benefit, roughly one month of salary for each year of service, owed to every worker under a Colombian labor contract. The standard formula takes the last monthly salary, including the transportation allowance when the worker qualifies for it, multiplied by the days worked in the year and divided by 360.

Even though the external payment happens once a year, the liability builds every month. A common payroll accounting practice is to accrue roughly 8.33% of monthly salary, equivalent to one-twelfth, precisely so the February deposit does not show up as a surprise cash outflow. That monthly accrual is an internal accounting convention, not an external deposit: the cash stays with the company until it is actually due.

Should a company accrue cesantías every month or is a once-a-year calculation enough?

Cesantías should be accrued monthly, even though the external payment or deposit only happens once or twice a year. Cesantías and its interest are a labor liability that grows with every payroll run, and pushing the calculation to January usually creates gaps against the real accrued balance, plus an avoidable cash spike.

The two cesantías regimes in Colombia: which one applies to your workforce

Colombia runs two cesantías regimes at once, and which one applies to a given worker depends on the hire date, not on a choice the employer makes freely. The traditional regime under Colombia's Labor Code still governs contracts signed before Law 50 of 1990 took effect, for workers who never opted in writing into the new scheme. The special regime created by Law 50 of 1990, with a private fund and no retroactive recalculation, is mandatory for every contract signed after that law.

The practical difference is where the money sits and when it leaves the company's balance sheet. Under the traditional regime, the employer keeps the cesantías liability on its own books and pays it directly to the worker only when the contract ends, calculated on the last salary, which means the liability can grow with every raise. Under the Law 50 of 1990 regime, the employer deposits the amount accrued each year into a private fund the worker selects, and that liability leaves the balance sheet as soon as the deposit is made.

Aspect	Traditional regime (Labor Code)	Law 50 of 1990 regime
Who it covers	Contracts before 1991 with no written opt-in to the new regime	Contracts after the law, plus workers who opted in
Where the money sits	On the employer's own books, no external fund	The severance fund the worker selects
When the worker gets paid	At contract termination, recalculated on the last salary	Deposited into the fund every year, no recalculation
Main risk for the employer	A retroactive liability that grows with every raise	Depositing on time every February 14

Nearly every worker hired in Colombia today, and effectively every hire a foreign employer makes in 2026, falls under the Law 50 of 1990 regime. The traditional regime only survives on very old contracts that never switched, an increasingly rare case for a company with 10 to 100 employees in Colombia.

When to deposit cesantías into the fund: the February 14 deadline

An employer under the Law 50 of 1990 regime must deposit the cesantías capital accrued the previous year into the fund each worker chose by February 14 of the following year. Numeral 3 of Article 99 of Law 50 of 1990, the official Colombian legal text, sets the deadline as before February 15, meaning by the calendar day just before it.

Missing that date means owing the worker one day of salary for every day of delay, counted from February 15 onward. On a payroll with several workers earning a mid-range salary, that liability grows fast: a two-month delay on a worker earning 3,000,000 pesos a month means one day of salary, 100,000 pesos, multiplied by every calendar day the deposit is late.

That penalty is not a fine a government agency levies automatically. In practice, the worker has to claim it from the employer and, absent an agreement, take it to a labor judge, which makes it a litigation exposure that accumulates rather than an automatic charge. That does not make it any less real: the liability for delay runs from day one, even if the claim only surfaces months or years later.

Cesantías interest: the 12% annual rate and the January 31 deadline

A Colombian employer owes the worker directly, never the fund, 12% annual interest on the cesantías balance as of December 31 each year, on top of depositing the cesantías capital. This separate obligation comes from Law 52 of 1975, and the payment deadline is January 31 of the following year, two weeks ahead of the capital deposit.

If the contract ends before year end, the interest is prorated to the time worked and paid within the month following the partial settlement or the worker's exit. When the employer misses the interest deadline, the same law requires paying the worker an additional amount equal to the interest owed, which doubles the effective cost of the delay.

What happens if a company employing staff in Colombia has never deposited cesantías because it pays under the traditional regime?

If every contract at the company postdates 1991, or if longer-tenured workers already opted in writing into the new scheme, that case does not exist: the annual deposit into a fund is mandatory and is not left to the employer's discretion. The traditional regime only survives on a handful of very old contracts, and it is worth checking case by case before assuming an entire payroll sits under that scheme.

Obligation	Paid to	Deadline	Penalty for missing it
Deposit of cesantías capital	The severance fund the worker chose	February 14	One day of salary for every day of delay
Payment of cesantías interest	Directly to the worker	January 31	An additional amount equal to the interest owed
Final cesantías settlement	Directly to the worker	At contract termination	Late interest and possible labor claim

Which workers are excluded from the general cesantías regime

Workers under a salario integral contract do not receive cesantías as a separate payment, because it is already folded into their pay in advance. Salario integral, defined in Article 132 of Colombia's Labor Code, requires a base salary above 10 monthly minimum wages plus a prestacional factor of at least 30% of that amount. That factor covers, in advance, night and overtime pay, statutory bonuses, and cesantías with its interest.

In 2026, with Colombia's monthly minimum wage set at 1,750,905 pesos, the 10-minimum-wage threshold works out to 17,509,050 pesos a month before adding the 30% factor. A worker below that level cannot be placed on a salario integral contract and keeps receiving cesantías under the general regime.

Can a worker under salario integral claim cesantías on top of their monthly pay?

A worker on salario integral cannot claim cesantías on top of the monthly salary, unless the company agreed to something different in writing, because the 30% prestacional factor already folds in the value of cesantías and its interest inside the monthly payment. Vacation pay is the one benefit salario integral does not cover, and it still gets calculated and paid separately on the full agreed salary.

What happens to cesantías when a contract ends: the final settlement

When a contract ends, the employer must settle and pay the worker directly, without going through the fund, the portion of cesantías accrued from January 1 through the termination date, along with the proportional interest for that same period. This obligation is independent of the annual February 14 and January 31 calendar; it applies whenever a worker leaves, regardless of the month.

That final payment is often the moment a mistake accrued during the year becomes visible, since the worker can review the settlement breakdown and spot whether the base salary used in the calculation left out a variable payment that should have counted. For a company with frequent turnover in Colombia, every termination is a chance to catch an error, but also a point of exposure if the monthly calculation was already wrong.

What Soulbit automates in this payment flow, and what it does not

Soulbit does not calculate or settle cesantías or cesantías interest; that calculation stays with the employer or its local payroll provider, the same way it does with PILA social security contributions. What Soulbit automates is the next step: holding balances in stablecoins such as USDC and USDT and in fiat currencies including COP, USD, EUR and GBP, converting between them, and disbursing the already-calculated net amount to workers' Colombian bank accounts, with KYB and anti-money-laundering processes in place.

That disbursement covers both recurring payroll and a one-off payment, such as a final settlement for a worker leaving the company. We cover that flow in more detail in how to pay payroll in Colombia and in paying payroll in stablecoins and COP in Colombia. The payroll software that should calculate cesantías, interest and the rest of the statutory benefits is covered in payroll software in Colombia: what to check.

For a company that also pays Colombia's 4x1000 tax on every deposit it makes, that banking cost adds to the full picture of payroll cost, a topic we cover in 4x1000 and the financial transaction tax for companies in Colombia. A worked example of how all these costs stack up for a real company is in the case of a 30-employee Colombian SMB.