What a Colombian “liquidación” actually is
If you employ someone in Colombia, or you work there under a local contract, ending that contract triggers a final settlement known as the liquidación. It is not a severance penalty and it is not optional: it is the payout of the social benefits (“prestaciones sociales”) that the worker accrued while employed, guaranteed by the Substantive Labor Code. This calculator estimates the four items that show up in almost every settlement of an ordinary employee: the severance fund (cesantías), the interest on that fund, the mid-year service bonus (prima de servicios), and accrued vacation paid out in cash.
Everything runs in your browser using the 2026 figures: a minimum wage of COP 1,750,905 and a transport allowance of COP 249,095. No data leaves the page.
How to use the calculator
- Enter the monthly salary in Colombian pesos. For variable pay, use the last-twelve-months average.
- Choose how to measure the period: by dates (start and end) or directly by time worked (years, months, days).
- Tick the transport allowance box if it applies. It is only granted to workers earning up to two minimum wages (COP 3,501,810); above that ceiling the law drops it, and the calculator removes it automatically.
- Read the total and the four component cards, then open the step-by-step breakdown to see each formula.
How each component is computed
Colombia uses a 360-day commercial year (every month counts as 30 days). The transport allowance is added to the base for cesantías and prima, but is excluded from the vacation base.
| Benefit | Formula | Allowance included |
|---|---|---|
| Severance fund (cesantías) | (salary + allowance) × days / 360 | Yes |
| Interest on severance | cesantías × 12% × days / 360 | Inherited |
| Service bonus (prima) | (salary + allowance) × days / 360 | Yes |
| Vacation pay | salary × days / 720 | No |
In plain terms: cesantías equal one month of pay per year worked; the interest is 12% per year on that balance; the prima is another month of pay per year (half paid in June, half in December); and vacation is 15 working days per year, which is why it is divided by 720 (half a month per year) instead of 360.
Worked example
A worker on the minimum wage of COP 1,750,905, entitled to the transport allowance, who completed one full year (360 days):
- Base for cesantías and prima:
1,750,905 + 249,095 = COP 2,000,000 - Cesantías:
2,000,000 × 360 / 360 = COP 2,000,000 - Interest:
2,000,000 × 12% × 360 / 360 = COP 240,000 - Prima:
2,000,000 × 360 / 360 = COP 2,000,000 - Vacation:
1,750,905 × 360 / 720 = COP 875,453 - Total settlement: COP 5,115,453
For higher salaries over one full year:
| Salary | Cesantías | Interest | Prima | Vacation | Total |
|---|---|---|---|---|---|
| COP 1,750,905 | 2,000,000 | 240,000 | 2,000,000 | 875,453 | 5,115,453 |
| COP 3,000,000 | 3,249,095 | 389,891 | 3,249,095 | 1,500,000 | 8,388,081 |
| COP 5,000,000 | 5,000,000 | 600,000 | 5,000,000 | 2,500,000 | 13,100,000 |
The last row earns above two minimum wages, so no transport allowance is added.
Frequently asked questions
Does this include severance pay for wrongful dismissal?
No. The tool covers the social benefits that are always owed when a contract ends, regardless of the reason. The dismissal indemnity for termination without just cause (Article 64 of the Labor Code) is a separate payment that depends on the contract type and tenure, and is not estimated here.
Why is the transport allowance left out of vacation pay?
Vacation is settled on the ordinary salary only, without the transport allowance or occasional items such as overtime. Cesantías and prima, by contrast, do include the allowance when the worker earns up to two minimum wages. That difference is exactly why vacation uses the 720 divisor.
Does it work for less than a full year?
Yes. Every benefit is proportional to the days worked. Enter six months (180 days) at the minimum wage with the allowance and you get COP 2,497,726, precisely half of the full-year figure.
Is the 2026 minimum wage final?
The COP 1,750,905 value is set by a provisional decree (0159 of 2026) while the Council of State rules on a challenge to the original decree. It is the number payrolls use today, but it may change during the year.
This tool is an informational estimate based on 2026 Colombian labor rules; the exact settlement is determined by the Ministry of Labour and your employer under your contract. Verify it and consult a professional. Review it every year, because the minimum wage and transport allowance change each January.