Government sets Minimum Wage and Transportation Allowance for the year 2021
The National Government, through Decrees 1785 and 1786 of December 29, 2020, set the new Minimum Legal Monthly Wage and the Transportation Allowance that will be in effect as from January 1, 2021.
Such amounts are as follows:
- Minimum Wage: $908.526
- Transportation allowance: $106.454
In this regard, the following should be noted:
- Integral Social Security: The payment of contributions to the Health and Pension subsystems, for those who receive a Minimum Wage, will be as follows:
Pension | ||
Contribution (16% of IBC) | Employer contribution (12%) | Employee contribution (4%) |
$145.364 | $109.023 | $36.341 |
_
Health | ||
Quotation (12.5% of IBC) | Employer contribution (8.5%) | Employee contribution (4%) |
$113.566 | $77.225* | $36.341 |
- Parafiscal Contributions: The payment of contributions to the Colombian Institute of Family Welfare (ICBF), National Learning Service (SENA) and family compensation fund will be as follows:
Contributions (9%) | ||
ICBF (3%) | SENA (2%) | Compensation Fund (4%) |
$27.256* | $18.170* | $36.341 |
* Not applicable according to the exemption of contributions contemplated in Art. 114-1 of the Tax Statute.
c. Connectivity allowance: With the increase of the Transportation Allowance, its value will correspond to the amount of $106,454 and shall be recognized to those workers who earn up to two (2) Legal Minimum Monthly Wages and who perform their work at home, in accordance with the provisions of Decree 771 of 2020.
Finally, it is worth mentioning that, although the increase of the Minimum Wage is the lowest historically since 1985, being only 3.5%, it is still more than double the inflation which is 1.5% for the year 2021. It is expected that Colombian families will not see their purchasing power negatively affected, thus making the economy and the business sector more dynamic.
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