# Labor Code Article 128: why mileage reimbursement is not salary in Colombia

> Legal analysis of Article 128 of Colombia's Labor Code: why mileage reimbursement is not salary, Supreme Court case law and UGPP cases.

**Author:** Valentina Osorio — Colombian Tax Specialist (DIAN)  
**Published:** 2026-04-28  
**Updated:** 2026-04-28  
**URL:** https://quilometragem.com/blog/labor-code-article-128-why-mileage-reimbursement-is-not-salary-in-colombia

**TL;DR:** Legal analysis of Article 128 of Colombia's Labor Code: why mileage reimbursement is not salary, Supreme Court case law and UGPP cases.

- Article 128 of the Colombian Labor Code is the cornerstone to understand why certain payments do not constitute salary.
- The text, amended by Law 50 of 1990, lists payments that are not salary: occasional payments out of liberality, sums for proper performance of duties (transport, tools), and benefits expressly agreed as non-salary.
- Case law requires three conditions: exclusion by law or agreement, real cause distinct from service compensation, and no disguised habitual payment.
- Mileage is a means of transport contributed by the worker, with cost reimbursed.
- The Labor Chamber reiterates that the salary nature of a payment is determined by intrinsic nature, not by name.

## Article 128 of Colombia's Labor Code in modern reading

Article 128 of the Colombian Labor Code is the cornerstone to understand why certain payments do not constitute salary.[^cst-128-funcion-56] The Supreme Court Labor Chamber has consolidated over two decades an interpretation that lets companies structure mileage reimbursement as a payment with no impact on social benefits or contributions.

## What the article says

The text, amended by Law 50 of 1990, lists payments that are not salary: occasional payments out of liberality, sums for proper performance of duties (transport, tools), and benefits expressly agreed as non-salary.

## Essential requirements

Case law requires three conditions: exclusion by law or agreement, real cause distinct from service compensation, and no disguised habitual payment.

## Why mileage reimbursement complies

Mileage is a means of transport contributed by the worker, with cost reimbursed. It is not service compensation because it varies with actual kilometers driven.

## Supreme Court case law

The Labor Chamber reiterates that the salary nature of a payment is determined by intrinsic nature, not by name.[^corte-suprema-56] Fixed payments without support are reclassified as salary.

## UGPP cases

UGPP penalizes fixed payments without log, excessive rates, payments to workers without vehicles, and missing support documents.

## Proper documentation

Written policy, contract clause, GPS log, electronic invoice, separate accounting entry and monthly reconciliation.

## Recommendations

Never pay fixed monthly amounts, require log, keep reasonable rates. See [DIAN 2026 requirements](/en/blog/dian-2026-deducir-reembolso-kilometraje-colombia).

## Frequently asked questions

### Why does mileage reimbursement not constitute salary in Colombia?

Because it falls under Article 128 of the Labor Code as a sum received for proper performance of duties, not as service compensation. It reimburses a real cost the worker assumes when using their vehicle for business.

### Can I pay a fixed monthly mileage amount without a log?

No. The Supreme Court and UGPP reclassify any habitual fixed payment without real-cost support as salary. A GPS log and monthly supports are essential.

### Is it mandatory to agree on the non-salary character in the contract?

It is highly advisable. Although Article 128 excludes it by nature, an explicit clause in the contract or addendum strengthens defense against UGPP and labor lawsuits.

### What risk does a company face for misclassifying the reimbursement?

UGPP penalties for unpaid contributions plus interest, DIAN inaccuracy fines, individual labor lawsuits for benefit recalculation and, in extreme cases, criminal liability for social-security fraud.

## Sources

- [Función Pública — Código Sustantivo del Trabajo, Artículo 128](https://www.funcionpublica.gov.co/eva/gestornormativo/norma.php?i=33104) — Departamento Administrativo de la Función Pública (Colombia) (2026-04-28)
- [Corte Suprema de Justicia — Sala de Casación Laboral, jurisprudencia sobre pagos no salariales](https://www.cortesuprema.gov.co/corte/index.php/sala-laboral/) — Corte Suprema de Justicia de Colombia (2026-04-28)
- [UGPP — Determinación de aportes y fiscalización](https://www.ugpp.gov.co/) — Unidad de Gestión Pensional y Parafiscales (Colombia) (2026-04-28)