If you invoice Colombia as an independent contractor on a personal-services contract, you do not contribute on 100% of the fee. Law 2277 of 2022 art. 89 sets the contribution base (IBC) at 40% of the monthly contract value, without VAT. UGPP’s example: a $50,000,000 contract over 10 months → $5,000,000 a month → IBC $2,000,000 → $580,440.
Calculate my contributions → · Employee 4%+4% → · Colombia net salary →
This note is personal-services contracts only. Own-account workers may deduct real costs or the Resolution 532 presumption. UGPP’s ABC keeps that out of this 40% IBC.
Direct answer
- Take the monthly contract value (no VAT).
- Multiply by 40%. That is the IBC, floored at 1 SMMLV ($1,750,905) if you are already obligated and capped at 25 SMMLV.
- Apply 12.5% health and 16% pension on the IBC.
- If the contract is longer than one month, add ARL. The official example uses class I 0.522%.
IBC = fees_without_VAT × 40% total = IBC × 12.5% + IBC × 16% + IBC × 0.522%
Table 1 — UGPP example ($5,000,000)
| Line | Amount |
|---|---|
| Monthly fees | $5,000,000 |
| IBC (40%) | $2,000,000 |
| Health 12.5% | $250,000 |
| Pension 16% | $320,000 |
| Class-I ARL 0.522% | $10,440 |
| Total due | $580,440 |
$4,419,560 of the fee remains after those contributions. No solidarity fund: the IBC ($2,000,000) is below 4 SMMLV.
Table 2 — When 40% misses the floor
| Fees | 40% | IBC used |
|---|---|---|
| $1,500,000 | $600,000 | $0 (not obligated: < 1 SMMLV) |
| $3,000,000 | $1,200,000 | $1,750,905 (floor) |
| $5,000,000 | $2,000,000 | $2,000,000 |
At $3,000,000 you are obligated, but 40% ($1,200,000) is below the minimum. The IBC rises to $1,750,905. Health $218,863 + pension $280,145 + class-I ARL $9,140 = $508,148.
Table 3 — Employee vs contractor (same $5,000,000)
| Employee | Contractor (CPS) | |
|---|---|---|
| Base | Salary $5,000,000 | IBC $2,000,000 |
| Health | 4% = $200,000 | 12.5% = $250,000 |
| Pension | 4% = $200,000 | 16% = $320,000 |
| ARL / FSP | FSP $0 | Class-I ARL $10,440 |
| Worker pays | $400,000 | $580,440 |
Confirm planilla I (contributor type 59) with your PILA operator. Add multiple contracts. Other ARL classes are not in this note.