How Income Tax Works in Colombia (2026)
Colombia withholds retención en la fuente from salaries monthly (Procedimiento 1). The formula: gross − 8% social security − 25% exempt income (capped at 790 UVT/year, \u224865.83 UVT/month) = withholding base, then the UVT table (UVT 2026 = COP 52,374).
The 2026 monthly UVT table
| Monthly base (UVT) | Rate |
|---|---|
| 0 – 95 | 0% |
| 95 – 150 | 19% |
| 150 – 360 | 28% |
| 360 – 640 | 33% |
| 640 – 945 | 35% |
| 945 – 2,300 | 37% |
| Above 2,300 | 39% |
Social security (employee)
4% pension + 4% health on the IBC (gross minus transport allowance, capped at 25 SMMLV), plus the FSP solidarity fund of 1–2% for salaries at or above 4 SMMLV (≈COP 7,003,620).
Worked example
Monthly salary of COP 20,000,000: SS = 1.6M + FSP 200K = 1.8M. Base = 18.2M; exempt 25% = 4.55M; withholding base = 13.65M = 260.6 UVT. Withholding ≈ COP 2,169,600. Take-home ≈ COP 16,030,400.
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Another worked example
Monthly salary of COP 8,000,000: IBC = 8,000,000. SS = 8% × 8,000,000 = COP 640,000. FSP = 1% × 8,000,000 = COP 80,000 (above 4 SMMLV). Base = 7,280,000. 25% exempt = 1,820,000 (under the 790-UVT annual cap). Withholding base = 5,460,000 = 104.24 UVT → withholding ≈ COP 191,459. Take-home = 8,000,000 − 640,000 − 80,000 − 191,459 = COP 7,088,541.
Reading your Colombian payslip
Your desprendible de nómina has four deduction lines: salud 4%, pensión 4%, FSP (1–2%, only at 4+ SMMLV), and retención en la fuente (the UVT-table withholding). The 25% exemption is computed inside the withholding line — verify it's capped at 790 UVT per year, not per month. The auxilio de transporte should appear as a payment but not inside the IBC base for social security. If your salary is near 25 SMMLV, check the IBC ceiling is applied.
Common mistakes
1. The 790-UVT cap as monthly. It's per year (≈65.83 UVT/month).
2. Including the transport allowance in the IBC. Up to 2 SMMLV is excluded from social security and withholding.
3. Missing the Solidarity Fund. 4+ SMMLV salaries owe 1–2% FSP on top of the standard 8%.
What counts as taxable income in Colombia
Colombia's IBC includes salary, commissions, overtime, bonuses, and regular allowances — capped at 25 SMMLV. Excluded from the IBC: the transport allowance (up to 2 SMMLV) and genuine reimbursements. The 25% exemption (capped at 790 UVT/year) then applies to (IBC − social security). Cesantías (severance, one month's salary per year) and prima de servicios (service bonus) are separate benefits with their own tax treatment — they're not part of monthly withholding.
Sources & verification
Figures compiled from: DIAN.
Last verified: 23 October 2026. This guide is an estimate, not tax advice.