Severance pay in Colombia: how to calculate the liquidación

When a job in Colombia ends, the employer must pay the worker what is still owed. That final payment is called the liquidación. On a fixed salary it has four parts: the cesantías, the interest on them, the prima and any unused vacation, paid in money. Each part covers only its own unpaid period, counted in 30-day months. The severance calculator does the sums; this guide shows you how to check them by hand.

First, the words

In English, "severance pay" can mean two different things. Cesantías are a benefit worth one month of pay per year worked; they are often translated as "severance" and are part of the liquidación. The indemnity for dismissal without just cause (CST art. 64) is a separate payment, and neither this guide nor the calculator covers it. CST is the Código Sustantivo del Trabajo, Colombia's labor code. The prima de servicios is a service bonus, and SMMLV is the monthly legal minimum wage.

The four parts and their formulas

Part	Formula	Days counted
Cesantías (CST art. 249)	base × days ÷ 360	From 1 January of the end date's year
Interest on cesantías (Ley 52 de 1975)	cesantías × days × 12% ÷ 360	The same days as the cesantías
Prima (CST art. 306)	base × days ÷ 360	From the start of the end date's semester: 1 January or 1 July
Vacation (CST art. 186, Ley 995 de 2005)	(days × 15 ÷ 360 − days taken) × salary ÷ 30	The whole contract

If the contract started after 1 January or after the start of the semester, those parts count from the start date instead.

The base for cesantías and prima is the monthly salary plus the auxilio de transporte, a transport allowance for workers who earn up to two SMMLV, when the worker gets it (Ley 1 de 1963 art. 7). Vacation uses the salary without the allowance. The figures:

• 2026: minimum wage $1,750,905 (Decreto 1469 de 2025; while the Consejo de Estado had that decree suspended, from 12 February 2026, Decreto 159 de 2026 set the same figure) and transport allowance $249,095 (Decreto 1470 de 2025). Two minimum wages are $3,501,810.
• 2025: minimum wage $1,423,500 and transport allowance $200,000.

Vacation is 15 working days per year worked (CST art. 186). When the contract ends, the days not taken are paid in money in proportion to the time worked (Ley 995 de 2005). With no vacation taken, the formula shrinks to salary × days ÷ 720.

Why only this year and this semester

A long contract doesn't mean a huge liquidación, because most of the money was paid along the way. Each year's cesantías go into the worker's fondo de cesantías (a fund that holds them) by 14 February of the next year, and their interest is paid to the worker by 31 January. The prima is paid in two halves, by 30 June and by 20 December. So at the end, cesantías and interest count only the current year, and the prima only the current semester. Vacation looks back over the whole contract and subtracts the days already taken.

How payroll counts the days

Payroll in Colombia uses a 360-day year of twelve 30-day months and counts both the first and the last day. No single statute sets this; it is how payroll counts, and the calculator does the same. So 1 to 31 January is 30 days, 1 January to 30 June is 180, and a contract ending on the last day of February counts February as 30 days.

How to calculate it, step by step

1. Collect four facts: the start date, the end date, the monthly salary, and the working days of vacation already taken over the whole contract. Payroll keeps the vacation record if you don't.
2. Check the transport allowance. If the salary is up to two minimum wages of the end date's year, the allowance goes into the base for cesantías and prima. The net salary calculator shows whether a salary gets it, along with the take-home pay.
3. Count the vacation already taken in working days. If you only know the dates of a past vacation, the business days calculator counts the working days between two dates and skips Colombian public holidays. You choose whether Saturdays count.
4. Count the days for each part and apply the formulas from the table above. Then add the four amounts.
5. Check your result with the calculator. In the severance calculator, enter the two dates, the salary and the vacation days taken. The transport allowance box ticks itself when the salary is up to two minimum wages, and you can untick it. It shows each base, the days each part covers and each amount. It runs in your browser; what you type isn't sent anywhere.
6. Compare with the employer's liquidación line by line. If a figure differs, look first at the dates, the base and the vacation days, and ask payroll to explain.

Example 1: six months at the minimum wage

Pepito Pérez works at tienda-ejemplo.co from 1 January to 30 June 2025 for the 2025 minimum wage, $1,423,500, plus the $200,000 transport allowance. The base for cesantías and prima is $1,623,500, the vacation base is $1,423,500, and the period is 180 days. The calculator gives the same figures.

Part	Calculation	Amount
Cesantías	1,623,500 × 180 ÷ 360	$811,750
Interest	811,750 × 180 × 12% ÷ 360	$48,705
Prima	1,623,500 × 180 ÷ 360	$811,750
Vacation (7.5 working days)	1,423,500 × 180 ÷ 720	$355,875
Total		$2,028,080

Example 2: a long contract

Now a contract from 1 March 2020 to 30 September 2026 at $4,000,000 a month. That is more than two minimum wages ($3,501,810 in 2026), so there is no transport allowance and the base is the salary. The worker took 60 days of vacation over the years.

Part	How it's counted	Amount
Cesantías	1 January to 30 September 2026: 270 days	$3,000,000
Interest	3,000,000 × 270 × 12% ÷ 360	$270,000
Prima	1 July to 30 September 2026: 90 days	$1,000,000
Vacation	2,370 days worked = 98.75 working days, minus 60 taken = 38.75	$5,166,667
Total		$9,436,667

The years 2020 to 2025 don't appear in the cesantías or the prima: their cesantías went into the fund each February, their interest was paid each January, and their prima each June and December. Counting all 2,370 days for cesantías would pay those years twice.

What the calculator leaves out, and when it's due

The calculator doesn't include the indemnity for dismissal without just cause (CST art. 64), the salario integral arrangement, or variable pay such as overtime, night surcharges or commissions.

At the end of the contract, the employer must pay what is owed. The labor code provides a sanction for paying late, the indemnización moratoria (CST art. 65). If your payment is late, ask payroll in writing and get advice on whether that sanction applies.

Quick checklist

• I have the start date, the end date, the salary and the vacation days taken.
• Cesantías and interest count from 1 January, the prima from the start of the semester.
• Vacation counts the whole contract, minus the days taken, on the salary alone.
• Days are counted in 30-day months, both dates included.
• I compared my figures with the employer's, line by line.

This is a guide, not legal or tax advice. For any real liquidación, the payroll department or a contador (a certified accountant) has the final word.

Frequently asked questions

Why is vacation divided by 720?

Every 360 days worked earn 15 working days of vacation, and the calculator pays each one at a thirtieth of the monthly salary. 15 ÷ 360 ÷ 30 is 1 ÷ 720.

Does the transport allowance go into the base?

For cesantías and prima, yes, when the worker gets it, that is, when the salary is up to two minimum wages. For vacation, no.

I count 181 days from January to June. Who is right?

Both. In 2025 or 2026 the calendar has 181 days there, but payroll counts every month as 30 days, so 1 January to 30 June is 180. The formulas divide by 360, so they expect that count.

Why doesn't the calculator count my cesantías from earlier years?

Because each year's cesantías go into your fund by 14 February of the next year, so they should already be there; ask the fund for your balance. The calculator counts only the current year, so if your contract ended early in the year, ask payroll whether last year's were deposited.

Try it

• 7.5Severance pay ColombiaCalculate the final settlement (liquidación) when a job ends in Colombia: cesantías and their interest, prima and unused vacation, with the days each covers.
• 7.3Net salary ColombiaWork out take-home pay in Colombia from the gross monthly salary: health and pension deductions, the solidarity fund and the transport allowance, line by line.
• 7.2Business days ColombiaCalculate working days between two dates or add business days to a deadline in Colombia.