Cesantías in Colombia: the annual severance deposit, 12% interest, and the 14 February deadline

Cesantías in Colombia are severance savings: one month of salary for every year of service, which the employer calculates on 31 December and deposits by 14 February into a fondo de cesantías, the severance fund the worker chooses. Separately, the employer pays the worker the intereses sobre cesantías directly in January: 12% a year on the cesantías accrued. A late deposit costs one day of salary for every day of delay.

In a spreadsheet, these rules mean three jobs each January and February: interest paid to each employee, cesantías sent to each employee's chosen fund, and separate calculations for mid-year joiners and commission earners.

How cesantías accrue: one month's salary per year of service

Art. 249 of the Substantive Labour Code (Código Sustantivo del Trabajo, CST) sets this one-month-per-year entitlement, proportional for part of a year. Under Ley 50 de 1990 Art. 99, which covers contracts signed since 1991, the employer calculates the liquidación de cesantías (the year-end settlement) every 31 December for the year or fraction worked.

Colombian payroll practice counts a year as 360 days and a month as 30, so cesantías = base × days worked ÷ 360. An employee who joined on 1 July has 180 days at year end and accrues half a month's base.

The cesantías base: salary, transport allowance, variable pay

Under CST Art. 253, if the salary has not changed in the last three months, the base is the last monthly salary. If the salary changed, or pay is variable, the base is the average earned over the last year (or the whole period, if shorter). That average includes everything that counts as salary under CST Art. 127: overtime, Sunday premiums, commissions, and habitual bonuses.

The base also includes the auxilio de transporte (transport allowance) for employees earning up to two minimum wages, because Ley 1 de 1963 Art. 7 treats the allowance as salary for prestaciones sociales (statutory benefits). The minimum wage and the transport allowance are set by decree each December. For 2026 the monthly minimum wage (SMMLV) is COP 1,750,905 (two minimum wages: COP 3,501,810) and the transport allowance is COP 249,095 a month. The Consejo de Estado (the highest administrative court) has not yet ruled finally on challenges to the 2026 minimum-wage decree; the figure remains in force.

Intereses sobre cesantías: 12% a year, paid by 31 January

Ley 52 de 1975 Art. 1 and Ley 50 de 1990 Art. 99 require interest of 12% a year on that year's cesantías (not the whole fund balance), proportional for part of a year. The formula is cesantías × days worked × 12% ÷ 360. A full year earns 12% and 180 days earn 6%; applying the flat 12% to half a year's cesantías pays twice the interest owed.

The interest goes directly to the worker, never to the fund: in January, or in the final settlement when the contract ends. An employer that does not pay the interest on time owes a one-time additional amount equal to the interest (Ley 52 de 1975 Art. 1, numeral 3). The interest is fully exempt from income tax only if the worker's average monthly income over the last six months is at most 350 UVT (tax value units), and partially exempt on a sliding scale above that (tax code, Estatuto Tributario Art. 206, numeral 4). The interest cannot be garnished, except for child-support orders and debts to cooperatives, up to 50% (CST Art. 344).

The 14 February deposit into the fondo de cesantías

Ley 50 de 1990 Art. 99 requires the consignación de cesantías (the deposit) "before 15 February", so by 14 February, into an individual account at the fund the worker chooses: a private fund administrator or the state Fondo Nacional del Ahorro (National Savings Fund).

In 2027, 31 January and 14 February both fall on a Sunday. Practitioners usually move such a deadline to the next business day, Monday 15 February, under Ley 4 de 1913 Art. 62, but that article covers periods counted in days, months or years, and Art. 99 sets a fixed date. The cautious course is to pay the interest by Friday 29 January and deposit by Friday 12 February.

Ley 2466 de 2025 (the 2025 labour reform) Art. 64 lets the employer deposit 8.33% of the base each month in advance (not a partial payment to the worker), and lets the parties agree in writing on monthly interest at 1% of the base. The law makes the option conditional on the Ministry of Health adapting the PILA (the social-security contribution form). The Ministry of Labour's draft implementing decree (May 2026, revised July 2026) makes the monthly deposit voluntary and subject to a written agreement; no final decree had been issued by mid-October 2026. Where pay varies, the difference between the monthly deposits and the 31 December settlement is still due by the February deadline.

Worked example: a full year at 1.5 SMMLV in 2026

An employee earns a fixed 1.5 SMMLV for all of 2026.

1. Monthly salary: COP 1,750,905 × 1.5 = COP 2,626,358 (rounded).
2. Base: the salary is below two minimum wages, so the transport allowance is added: COP 2,626,358 + COP 249,095 = COP 2,875,453.
3. Cesantías: COP 2,875,453 × 360 ÷ 360 = COP 2,875,453, deposited into the employee's fund by 14 February 2027.
4. Interest: COP 2,875,453 × 360 × 12% ÷ 360 = COP 345,054, paid to the employee by 31 January 2027.

Cesantías and interest together cost the employer COP 3,220,507 for the year. Had the employee joined on 1 July 2026 (180 days), cesantías would be COP 1,437,727 and interest COP 86,264.

Salario integral: no separate cesantías

Employees on salario integral (a single all-inclusive salary) receive no separate cesantías or interest; every other employee accrues cesantías. CST Art. 132 allows a written agreement for a salary of at least 10 SMMLV plus a factor prestacional (benefits component) of at least 30%, so at least 13 SMMLV (COP 22,761,765 a month in 2026). That single figure compensates in advance for cesantías, their interest, the service bonus, and most premiums; only vacation is paid separately. Without a written agreement, cesantías accrue as normal.

Late deposits: one day of salary per day of delay

The sanción moratoria (late-deposit penalty) is one day of salary for each day of delay (Ley 50 de 1990 Art. 99, numeral 3), calculated as monthly salary ÷ 30 without the transport allowance. In the worked example the daily salary is COP 87,545, so a 30-day delay costs a full month's salary (COP 2,626,358), nearly the size of the deposit.

The Corte Suprema de Justicia (Supreme Court of Justice) held in SL15097-2014 (24 September 2014) that the penalty accrues from 15 February until the deposit or the end of the contract, whichever comes first. Courts also weigh the employer's good faith, so the penalty is not automatic. Ley 2466 de 2025 Art. 15 added a narrow defence to CST Art. 57: a proven direct payment of the cesantías to the worker discharges the obligation and avoids the penalty, unless it is shown that the payment was not made freely and was not used for a purpose the law allows. Affiliation to a fund remains mandatory.

Partial withdrawals and payment at termination

Under Ley 50 de 1990 Art. 102, the worker can withdraw from the fund only:

• when the employment contract ends;
• for housing: buying, building, improving, or paying off the worker's home (CST Art. 256), after the employer confirms the requirements are met;
• for higher education of the worker, a spouse or permanent partner, or children, paid directly to the institution, with education savings plans or education insurance for children or dependants added by Ley 1809 de 2016.

The fund must pay within five business days of a complete request (Decreto 1072 de 2015).

On termination, the employer pays the current year's undeposited cesantías, with proportional interest, directly to the worker in the final settlement on the day the contract ends (Ley 50 de 1990 Art. 99, numeral 4). Late payment of the final settlement is subject to a separate penalty under CST Art. 65, covered in our article on termination in Colombia.

Summary

Cesantías accrue at one month of base pay per 360 days of service; for employees earning up to two minimum wages, the base includes the transport allowance. The employer settles them on 31 December and deposits them in the worker's fund before 15 February; the 12% interest, prorated for part-years, goes to the worker in January. Salario integral employees receive neither. A late deposit costs a day of salary per day of delay, and unpaid interest triggers a one-time extra payment of the same amount.

Flux runs Colombian payroll for partners, so a partner's team can spend January reviewing these figures rather than rebuilding them in a spreadsheet.