Updated on October 16, 2020:Mandatory «EPS» affiliation for M and R type visas
If you are a foreigner, but you reside in Colombia and you have a Cédula de Extranjería, you must keep in mind that under Law 100, and the Decree 064, you are legally responsible for contributing to social security in Colombia through the contributory system.
This regime covers all employees, independent workers, and pensioners. The family group that depends economically on the holder may also be included as beneficiaries.
Regarding independent workers, are included income associated with activities such as:
- Rentals
- Financial returns
- Dividends
- Profits from the marketing of goods and services
- Fees, commissions, and/or services provided
It is important to clarify that even if the foreigner has private international insurance or is affiliated with the health system of his or her country of origin, he or she is NOT exempt in Colombia, it is his or her duty to be affiliated with the Colombian system and make the corresponding payments to social security within the terms of the law.
To know how much you must contribute or pay, it is important to be clear about the «Ingreso Base de Cotización» (IBC) according to your specific case.
What is the IBC?
It is the minimum value on which the value of the contributions to the General System of Social Security (SGSS) must be calculated.
How do you calculate the IBC?
Employees
For those who have a permanent or indefinite work contract with a Colombian company, the company is responsible for making the corresponding affiliations at the beginning of the contract. In this case, contributions to the Social Security System are made per the following percentages taking as an IBC the total monthly salary earned:
Self-employed workers
To calculate the IBC in this case, which may vary every month, it is necessary to complete the following steps:
- Identify the type of activities you carry out.
- Include the total income you receive from all activities carried out independently, in Colombia, and/or abroad.
- Identify the expenses and costs associated with the income received. In case you have them, these are subtracted from the total income to obtain the IBC. However, the contributions to the General Social Security System, in this case, are the responsibility of the independent, and must be made through the Integrated Contribution Settlement Form – PILA with the following rates:
However, the contributions to the General Social Security System, in this case, are the responsibility of the independent, and must be made through the Integrated Contribution Settlement Form – PILA with the following rates:
1. Health care contribution ………………. IBC total x 12,5%.
2. Pension contribution …………….IBC total x 16% (*Not required for foreigners).
3. Contribution to occupational risks ………….. IBC total x rate associated with the risk category (*Not required for foreigners).
Having clear the above information, the IBC will be 40% of the total net monthly income received, minus the costs and associated expenses that may be applicable. So the base of your contributions to the system could be higher than 40% of that amount, but can never be less than this percentage.
We will give you some examples to help you understand this topic:
Example 1: Workers with permanent or indefinite contracts.
Elizabeth is a foreigner and was hired by the ABC Colombia company, she has a 2-year full-time contract, earning a monthly salary of $3,500,000.
Which should be the base of contribution to the SGSS?
The employer is responsible for enrolling the worker in the SGSS and the contribution base (IBC) should always correspond to the real salary earned by the employee. In this case, $3,500,000.
How should she contribute to the SGSS?
Monthly salary earned: $3,500,000
Base to contribute (IBC): $3,500,000
Health rate: ABC Colombia company (8.5%) – Elizabeth (4%)
Pension rate: You are not required to contribute because you are a foreign employee
Occupational risk rate: company ABC Colombia (0.5%)
Rate of compensation fund: company ABC Colombia (4%).
ABC Colombia company health contribution: $3,500,000 x 8.5% = $297,500
Elizabeth Health Contribution: $3,500,000 x 4% = $140,000
ABC Colombia’s contribution to labor risks: $3,500,000 x 0.5%= $17,500
Contribution to the ABC Colombia company compensation fund: $3,500,000 x 4% = $140,000.
Total contributions by ABC Colombia Company: $455,000.
Total contributions by Elizabeth: $140,000.
Note: Total contributions are automatically deducted by the company, that is, Elizabeth’s contribution: $140,000, is deducted directly from her paycheck.
Example 2: Workers with a service contract.
Amelia is a foreigner currently living in Colombia. She is an expert in digital marketing and has a service contract with the company XYZ in Colombia. This month, she had a total income of $2,800,000 for the contract mentioned.
Does she have the obligation to contribute to healthcare in Colombia?
Yes, even if she is a foreigner, she lives in Colombia and has an income that exceeds the Colombian minimum wage. Therefore, she is compelled to contribute to the SGSS with an IBC corresponding to the total monthly income, that is, $2,800,000.
How must she contribute?
Total income for the month: $2,800,000
Minimum contribution base: 40%
Health rate: 12.5%
IBC: total revenue x minimum contribution base
IBC: $2,800,000 x 40%: $1,120,000
IBC: $1,120,000.
Contribution to healthcare: $1,120,000 x 12.5% = $140,000.
Example 3: Freelance workers.
He has been in Colombia for more than 6 months and has not made any contributions to the General Social Security System.
Does he have an obligation to contribute to health care in Colombia?
Yes, as a resident of Colombia, and having an income above 1SMLMV ($1.000.000).
How must he contribute?
Total income for the month: $1200 USD ($4,560,000 approximately).
Costs: $500 USD ($ 1,900,000 approximately).
Minimum contribution base: 40%
Health rate: 12.5%
IBC: (total revenue – costs) x minimum contribution base.
IBC: ($4,560,000- $1,900,000) x 40%=$1,064,000
IBC: $1,064,000
Contribution to health: $1,064,000 x 12.5% = $133,000
Note: A freelancer is a person who meets at least one of the following conditions:
- He performs an economic activity on his own.
- Has a contract other than a service contract, meaning contracts for civil works, supplies, commodities, and leases, among others.
- Develops activities that generate profits, dividends, and financial returns, among others.
- Generates income by providing personal services that are related to the functions of the contracting company.
Example 4: Pensioners.
TAKE IN MIND: There is no clear law that determines the exact IBC for those who have a retirement income from abroad; However, currently according to the Ministry of Foreign Affairs of Colombia the IBC must correspond to 40% of the total monthly income received by the foreigner.
Edward is a foreigner and is retired by the Social Security Administration in his home country. The pension he receives monthly is equivalent to USD 3000. He is currently living in Colombia and has a Cédula de Extranjería, but he is not affiliated with the SGSS.
Does he have the obligation to contribute to health care in Colombia?
Yes, since he is a resident in Colombia and earns more than 1SMLMV from a pension abroad.
How should he contribute?
Total income for the month: $3000 USD ($11,400,000 approximately).
Minimum contribution base: 40%
Health rate: 12.5%
IBC: (total income) x minimum contribution base.
IBC: ($11,400, 000) x 40%=$4,560,000
IBC: $4,560,000
Contribution to health: $4,560,000 x 12.5% = $570,000
Example 5: Foreigner married to Colombian.
How could Nathalie be affiliated with the SGSS?
Even if Nathalie does not perform any economic activity, she is required to be affiliated with the Colombian SGSS. In this case, because she has a Colombian husband who is already in the contributory regime, Nathalie can be considered a beneficiary within the family group.
The procedure to be followed would be to register the status as a beneficiary in the system, by presenting the Marriage Certificate where the relationship with the holder is stated. This affiliation of Nathalie as a beneficiary does not have any additional cost and will be covered by the fee previously contributed by Pablo to the SGSS.
PLEASE NOTE: If you quote with an IBC lower than the real income you receive, you will be considered an EVADER before the Colombian law and the Ministry of Health.
Also, remember that if you are a foreigner, you are not obliged to contribute to a pension or occupational risk. You are only obliged to contribute to the HEALTH.
How are contributions to the SGSS related to the Colombian visa application?
Well, to fulfill the current social security regulations in Colombia, the Ministry of Foreign Affairs within the process of visa application, ensures that the following items are verified by the foreigners who meet the criteria to belong to the contributive system:
● Registration of the foreigner through the portal https://miseguridadsocial.gov.co/
● Current certificate of enrollment in the health care institution.
● Certificates of the last paid periods from social security contributions.
● IBC of contributions that coincide with the income supports that the foreigner has either in Colombia or abroad.
In the article you speak of mandatory affiliation for visa M and visa R. Where exactly can I find that people with visa V are exempt from this rule? In de decretos I can only find that residents should be affiliated, but I cannot find the definition of a resident. For example, visa V wouldn’t be a resident according to migración, but according to DIAN I am a resident: what is the definition of a resident according to the ministerio de la salud?
Short version: may they deny my application for visa M, if I had visa V and don’t have an eps, while I did make enough money to contribute (foreign income)?
“If you are a foreigner, but you reside in Colombia…”
Is “reside in Colombia” defined?
E.g. stay in Colombia greater than 180 days? Own a home in Colombia and live there at least one day per year?
Yes can you please clarify, because as an M you only have to be in the country one day every 6 months and a R one day every 2 YEARS to keep these visas valid correct? Obviously this would not make you a tax resident if doing the minimum amount of time on the ground. How are they defining «residing», just if you have a M or R visa or you actually physically present the 6 months? I imagine there are a decent amount of people who have residency but dont stay in colombia 100% of the time.Can you legally do the minimum amount of time (or less than 6 months to be a tax resident), have a CE, and not be a tax resident and not pay the eps? can you clarify? Also, by doing the minimum, could you still become a colombian citizen after 5 years with the R visa? THX
Nobody ever explains how to compare EPS companies. EPS websites don’t have functional «click here to join» buttons. I have been waiting almost a month for a response to an email to an EPS asking for an appointment to meet with someone who can subscribe me to the plan. I went in person to two plan’s clinics and even there in person no one could tell me how to subscribe. What’s going on? What am I failing to recognize here?
Hi! You’re right. Most of the time, communication with EPS is difficult. If you want, write to us by email at info@expatgroup.co telling us a little about your situation and we will help you find the best solution. Kind regards!
So, non-employed foreign pensioner must pay health but NOT social security?
Hello!
I have a cédula de extranjería. I have been living in Colombia since 2013. For the last yearI have been a beneficiary of my wife of the Eps and pension. In January I have to apply to renew y visa, would that affect my visa renewal?
Thanks in advance for your answer
Hi Zach! Thanks for writing to us. The EPS certificate became an essential requirement for visa renewals. It is necessary first to analyze your specific case to determine if being a beneficiary of your wife will affect your future process. We recommend you book a consultation with one of our specialists: https://expatgroup.co/english/book-an-appointment/. Take care!
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Are you considered a freelancer in Colombia if you are employed by a foreign company (a US company) and work remotely in Colombia while being a foreign residen (with an M-vissa)?
Is there a maximum health contribution? or is it always12.5% of 40% of your income?
Hi, Philip. The Freelance Visa is for workers who may have remote contracts. Still, it is also important that they have employment/contract with a Colombian company. On the other hand, it is always the same contribution percentage.
Contact us to solve all your doubts if you want specialized advice.
+18507714928
Or schedule an appointment with an advisor.
https://expatgroup.co/english/book-an-appointment/
Have a great day!
I very much want to understand – M/R visa AND reside in Colombia. I have an R, but I live in the United States 300 days per year. I have health insurance in the United States that I pay >$12000 USD per year for. Is it truly the case that I need to pay 12.5% of my income for EPS when I am here only 60 days per year, and not consecutively at that!
Colombians living abroad are excepted from EPS. Is there not an equivalent for visa holders living abroad?