Patrick
Back in 2015, I wrote a post breaking down the cost of hiring a domestic worker earning minimum wage in Colombia. At the time, it was an eye-opening exercise to see how all the components—salary, benefits, and mandatory contributions—added up. Fast forward a decade, and I thought it was time to revisit this topic. The cost of living has changed, labor laws have evolved, and the minimum wage has increased significantly. So, let’s dive into the exact costs of employing a domestic worker in Colombia in 2025, compare it to 2015, and reflect on what it means for both employers and workers.
Why Hire a Domestic Worker?
Living in Colombia, especially in vibrant cities like Cali, often means embracing a lifestyle where domestic help is both common and affordable compared to many other countries. Whether it’s cleaning, cooking, or childcare, hiring a empleada doméstica can free up time for work, family, or simply enjoying the salsa-filled streets. But as I noted in my 2015 post, hiring someone comes with responsibilities beyond just paying a monthly salary. In Colombia, labor laws ensure workers receive benefits like social security, vacation pay, and severance, which significantly increase the total cost for employers.
In 2015, I calculated that employing a full-time domestic worker cost around COP $750.981 per month (about USD $250 at the time). Today, with the minimum wage set at COP $1,423,500 for 2025, plus additional benefits, the cost has risen sharply. Let’s break it down using the latest data from Gerencie.com and see how things have changed.
The Costs of Hiring a Domestic Worker in 2025
For 2025, the minimum wage in Colombia is COP $1,423,500 per month, and workers earning up to two minimum wages are entitled to a transportation allowance of COP $200,000. This means the base amount paid to a domestic worker is COP $1,623,500 per month. But as I learned a decade ago, the salary is just the starting point. Employers must cover social security, benefits, and other mandatory contributions. Below is the detailed breakdown for a full-time domestic worker (assuming a 47-hour workweek, as per Colombia’s gradual reduction in working hours under Law 2101 of 2021).
1. Monthly Salary and Transportation Allowance
- Minimum Wage: COP $1,423,500
- Transportation Allowance: COP $200,000
- Total Paid to Worker: COP $1,623,500
This is what the worker receives directly each month, assuming no deductions for taxes (most minimum-wage workers are exempt from income tax in Colombia).
2. Social Security Contributions
Employers are responsible for significant portions of social security contributions, which cover health, pension, and occupational risk insurance (ARL). The worker also contributes a smaller portion, deducted from their salary. Here’s how it breaks down for 2025:
- Health Insurance (12.5% of salary):
- Employer’s share: 8.5% = COP $120,998
- Worker’s share: 4% = COP $56,940 (deducted from salary)
- Pension (16% of salary):
- Employer’s share: 12% = COP $170,820
- Worker’s share: 4% = COP $56,940 (deducted from salary)
- Occupational Risk Insurance (ARL, 0.522% for low-risk jobs like domestic work):
- Employer’s share: COP $7,430
- Worker’s share: COP $0
3. Parafiscal Contributions
These are mandatory contributions to support social programs, calculated as 9% of the salary. However, employers hiring workers earning less than 10 minimum wages (COP $14,235,000 in 2025) are often exempt from contributions to SENA and ICBF, paying only the 4% to the Family Compensation Fund (Caja de Compensación):
- Caja de Compensación (4%): COP $56,940
- SENA (2%) and ICBF (3%): COP $0 (exempt for minimum-wage workers)
4. Benefits (Prestaciones Sociales)
Colombian labor law mandates several benefits, which are either paid directly to the worker or provisioned monthly for annual payments:
- Prima de Servicios (Service Bonus): Equivalent to one month’s salary plus transportation allowance (COP $1,623,500), paid in two semi-annual installments (June and December). Monthly provision: 8.33% = COP $135,237.
- Cesantías (Severance): Also equivalent to one month’s salary plus transportation allowance (COP $1,623,500), deposited annually into a severance fund by February 17. Monthly provision: 8.33% = COP $135,237.
- Interest on Cesantías: 12% annual interest on the cesantías balance, paid by January 31. Monthly provision: 1% = COP $16,235.
- Vacations: 15 days of paid vacation per year, equivalent to half a month’s salary (COP $711,750). Monthly provision: 4.17% = COP $59,360.
- Dotación (Work Uniforms): Employers must provide three sets of clothing and shoes per year (no fixed cost specified by law, but estimated at COP $80,000 annually or COP $6,667 monthly, which is very low in my opinion.)
5. Total Monthly Cost
Adding all these components together gives us the total monthly cost for an employer hiring a domestic worker in 2025:
- Salary + Transportation: COP $1,623,500
- Employer’s Social Security (Health + Pension + ARL): COP $120,998 + $170,820 + $7,430 = COP $299,248
- Parafiscal (Caja de Compensación): COP $56,940
- Benefits (Prima + Cesantías + Interest + Vacations + Dotación): COP $135,237 + $135,237 + $16,235 + $59,360 + $6,667 = COP $352,736
Total Monthly Cost: COP $1,623,500 + $299,248 + $56,940 + $352,736 = COP $2,332,424
This translates to approximately USD $555 per month, based on an exchange rate of COP $4,200 to USD $1 (as of May 2025, subject to fluctuation).
Comparing 2015 to 2025: A 210% Increase
In my 2015 post, I calculated the total monthly cost at COP $750.981 (approx. USD $250 at the time). Today, that figure has ballooned to COP $2,332,424 (USD $555)—an increase of about 210% in peso terms. Even accounting for inflation and exchange rate changes, this is a significant jump. Here’s why:
- Minimum Wage Growth: The minimum wage has risen from COP $644,350 in 2015 to COP $1,423,500 in 2025, a 121% increase, driven by annual adjustments to keep pace with inflation and cost-of-living changes.
- Transportation Allowance: This has grown from COP $74,000 to COP $200,000, a 170% increase, reflecting higher commuting costs.
- Social Security and Benefits: Contribution rates have remained relatively stable, but the higher base salary means larger absolute amounts. Additionally, the gradual reduction in working hours (from 48 to 47 hours per week in 2025, heading to 42 by 2027) has slightly increased hourly costs.
In USD terms, the cost has risen by about 122%, from $250 to $555, though this is tempered by exchange rate fluctuations. For comparison, hiring a full-time domestic worker in the U.S. might cost $2,000–$3,000 per month, making Colombia still relatively affordable for expats or locals with higher incomes.
Practical Considerations
As I noted in 2015, hiring a domestic worker is a balancing act. On one hand, it’s a valuable service that supports your lifestyle and provides meaningful employment. On the other, the costs can add up, especially for small households or those on a tight budget. Here are some tips for 2025:
- Budget Accordingly: At COP $2,332,424 per month (roughly COP $28 million annually), ensure this fits your financial plan. If full-time help is too costly, consider part-time arrangements, though you’ll still need to prorate benefits.
- Know Your Legal Responsibilities: Colombian labor laws strongly favor employees, and failing to comply with requirements like social security payments or benefits can result in steep penalties. For instance, if you miss the deadline to deposit cesantías into the severance fund (due by February 17 each year), you could face a fine equivalent to one year’s salary. To avoid costly mistakes, use resources like the Gerencie.com calculator to ensure your calculations are accurate and all obligations are met on time. Better yet, consider partnering with a local accountant as your ally—they can help navigate the complexities of Colombian labor laws and ensure you’re fully compliant, saving you from potential headaches down the road.
- Value the Relationship: A good domestic worker is worth their weight in gold. Fair pay, respect, and clear communication go a long way in building a lasting employment relationship.
Reflections on a Decade of Change
Looking back at my 2015 post, I’m struck by how much has changed in Colombia’s labor market. The minimum wage increases reflect efforts to improve workers’ purchasing power, but they also raise the bar for employers. For domestic workers, the higher salary and benefits are a step toward financial security, though many still face challenges in an economy with high informality (57.7% of workers don’t contribute to social security, per 2023 data). For employers, the rising costs underscore the importance of planning and compliance.
Personally, the biggest challenge for us has been ensuring that our kids don’t become spoiled or lazy with so much help around the house. With a domestic worker handling most cleaning, cooking, and other chores, there’s basically very little left for the kids to do. We’ve had to be intentional about assigning them responsibilities—like tidying their rooms, helping with dishes, or taking care of their pets—to teach them the value of work and independence. It’s a delicate balance, but one worth navigating to raise grounded kids in a home with domestic support.
Hiring a domestic worker remains a practical choice for many in Colombia, but it’s not just about the numbers. It’s about supporting someone’s livelihood while enhancing your own quality of life—and, in our case, making sure the kids learn to pitch in too. As I concluded a decade ago, the cost is significant, but the benefits—both practical and personal—can make it worthwhile.
