What is AIU in Colombia? Complete Guide 2026 + Calculation and Examples

Understanding AIU in Colombian Construction

AIU (Administración, Imprevistos, Utilidad) is the standard overhead and profit structure used in Colombian construction contracts. Understanding it correctly is essential for any contractor working in Colombia.

What Does AIU Stand For?

A - Administración (Administration): 5-15%

Office expenses

Project management salaries

Software and technology

Legal and accounting fees

Insurance premiums

I - Imprevistos (Contingencies): 2-5%

Unforeseen conditions

Weather delays

Material price fluctuations

Design changes

Risk coverage

U - Utilidad (Profit): 5-10%

Contractor's profit margin

Return on investment

Business development costs

Typical AIU Percentages

AIU and Taxes

IVA (VAT) on AIU

In Colombia, IVA (19%) is applied ONLY to the Utilidad (U) portion:

IVA = U × 19%

This is a significant advantage vs. applying IVA to the full contract value

Retención en la Fuente (Withholding)

Applied to the full contract value

Rate: 2% for construction contracts

Common Mistakes with AIU

Applying IVA to total AIU instead of just Utilidad

Using the same percentages for all project types

Not justifying each component in public bids

Forgetting that AIU is applied to direct costs only

OneEstimate Calculates AIU Automatically

Our software understands Colombian AIU rules and calculates everything correctly — including tax implications.

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