With the beginning of 2024, many Colombian workers are making their calculations to either invest or cover the year’s expenses. Some may be waiting Payment of severance pay and severance pay interest. When are these paid and how are they calculated?
(More: Severance Payments: This is how you can check the balance of these savings in Colombia).
Remember that severance pay is a type of social assistance and savings that the employee has and is the responsibility of the employer, depending on the contract.
Severance pay is one month’s salary for each yearThat is, the transfer is made only once a year. If you have a monthly salary contract of $1,500,000 and have worked for 12 months, you will receive this amount as severance pay.
(Also: How to pay property tax with severance pay? Here we explain).
If you have not worked throughout the year, you should make the calculation as follows. dismissal formula:
Days worked x salary / 360 days.
Example: You worked 200 days with a monthly salary of $1,500,000. When multiplied by the formula, it equals 300,000,000, which is divided by 360 to get $833,333. This will be the value of severance pay.
Colombians who have a contract to provide services, receive informal or full salary, are not entitled to severance pay.
(See: How to reverse dismissals: conditions and requirements?).
A portion of the interest accrued during the year is included in the severance pay. As established by Law No. 50 of 1990, the interest payment must be paid to the employee and is proportionate to 12% per annum or fractions.
The severance pay calculation formula is as follows::
Severance pay value x days worked x 0.12 / 360.
Example: your severance pay was $833,333 and you worked 200 days. Multiply this by 0.12 and the result is 19,999,992, which you then divide by 360. So you get an interest payment of $55,555.
(See: These are the requirements of ‘Jóvenes en Paz’, a program that will provide $1 million a month).
The employer must transfer the severance pay to the fund chosen by the employee by February 14, 2024.
Severance pay interest must be paid in advance. As decided on December 31st, It must be paid on the next pay slip, i.e. by January 31st at the latest.
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I am Bret Jackson, a professional journalist and author for Gadget Onus, where I specialize in writing about the gaming industry. With over 6 years of experience in my field, I have built up an extensive portfolio that ranges from reviews to interviews with top figures within the industry. My work has been featured on various news sites, providing readers with insightful analysis regarding the current state of gaming culture.
