Decree 533 of 2024 introduces a fundamental incentive to promote the creation and consolidation of new formal jobs in Colombia. Below, we detail the most relevant aspects of this regulation, which companies should be aware of to maximize the benefits it offers.
What the Incentive for New Job Creation Entails
Decree 533 of 2024 introduces a fundamental incentive to promote the creation and consolidation of new formal jobs in Colombia. Below, we detail the most relevant aspects of this regulation, which companies should be aware of to maximize the benefits it offers.
Incentive beneficiaries
Beneficiaries may include natural and legal persons, consortia, temporary unions, and autonomous patrimonies that prove their employer status through complete contributions to the Comprehensive Social Security System via PILA. However, entities in which the Nation or its decentralized entities hold more than 50% of the capital are excluded from this benefit.
To qualify for the incentive, employers must keep the new workers formalized for a minimum of six months and comply with all the requirements of the Ministry of Labor’s operating manual.
Requirements to apply for the incentive
- Employment comparison: The number of employees reported in PILA in May 2023 must be compared with those reported in the application period.
- Minimum employment period: The new worker must have been employed for at least six months prior to the application.
- Complete contributions: The employer must have made complete contributions to the Social Security System in PILA, with a contribution base income of at least 1 SMLMV.
The incentive will not be granted to workers who have had a temporary contract suspension or unpaid leave in the last six months.
Step-by-step application process
Eligible companies should follow these steps to apply:
- Submit an application signed by the legal representative.
- Certify that the related employees have received their corresponding salaries.
- Include a copy of the RUT issued within the previous six months.
Timing and amount of the incentive
The incentive is valid from the publication of the decree until August 2026, with a maximum of 24 applications per worker.
The amounts vary according to the type of worker:
- Young people (18-28 years old): 30% of 1 SMLMV.
- Women over 28 years old: 20% of 1 SMLMV.
- Men over 28 years old: 15% of 1 SMLMV.
- People with disabilities: 35% of 1 SMLMV.
- An additional 10% will be granted if the worker has not been a contributor in the last four months prior to joining.
An additional 10% will be granted if the worker has not been a contributor in the last four months prior to joining.
Tax considerations
It is important to note that incentives received must be considered as taxable income for income tax purposes, which implies that companies must include them in their income tax return.
This incentive from Decree 533 of 2024 represents a great opportunity for companies looking to grow and contribute to the formalization of employment in Colombia. At CUADRO LEGAL, we are ready to advise you through every step of the application process.
Do you have doubts or need advice? Contact us for more information on how your company can benefit from this incentive.
