Endowment
At a minimum, this benefit consists of the provision of one set of work clothing and one pair of shoes, which must be appropriate to the nature of the employee’s duties and the activity performed.
This obligation is regulated by Articles 230 to 234 of the Colombian Substantive Labor Code and does not constitute a discretionary benefit or an optional internal policy of the employer, but rather a legal duty subject to strict compliance.
Who is eligible for the endowment?
Earn up to two (2) times the current legal monthly minimum wage Have worked for at least three (3) consecutive months prior to each payment date
Note: If the employee exceeds the established wage cap or does not meet the required minimum length of service, the employer is not legally obligated to provide the endowment.
When is the deadline?
The law requires three mandatory payments per year, on fixed dates:
- April 30
- August 31
- December 20
Note: These dates are not flexible or negotiable. Failure to comply may result in penalties from the Department of Labor.
Can the endowment be paid in cash?
No. The law expressly prohibits compensating for the endowment of work clothing with cash. The purpose of this requirement is to ensure that the employee actually has the appropriate clothing to perform their duties safely and properly, not to receive an additional payment in lieu of the endowment.
How is endowment reported in the electronic payroll system?
Although the endowment is not considered salary or income for the employee, it must be reported in the Electronic Payroll Support Document.
- The DIAN requires its inclusion because it constitutes a labor cost or expense for the employer.
- It must be reported based on the value assumed by the company (in cash or in kind).
- This applies even when the allowance is provided in kind or through specific vouchers.
This is established in DIAN Resolution 000013 of 2021 and confirmed by official DIAN doctrine.
Note!! Failure to include the endowment report in the Electronic Payroll Payment Support Document may result in the expense being disallowed as a deduction for income tax purposes, as it does not meet the tax documentation requirements set by the DIAN.