☑️ The Basics

Currency: CRC, Costa Rican colón (Rate)

Public Holidays: Up to 13 public holidays (see here)

Employer Taxes: 26.5% of gross salary

Official Language: Spanish

Payroll frequency: Monthly, bi-monthly, weekly

13th / 14th Salary: (what's this?) ****Employees get a 13th salary (aguinaldo), paid in December.

Three things to know about employing in Costa Rica

1. Employees get a 13th salary, which is a Christmas bonus, known as an aguinaldo. The bonus is equivalent to one month’s salary, and must be paid within the first 20 days of December.
2. Notice periods in Costa Rica range from one week to one month. During the notice period, the employee is entitled to take one paid day off per week to find a new position.
3. Only employees dismissed without just cause are entitled to severance pay. Employees fired with just cause are paid only their acquired vacation days and Christmas bonus portion earned that year.

Employment in Costa Rica

Notice Period

Notice periods depend on the length of employment:

• 0-3 months: No notice required
• 3-6 months: 1 week notice
• 6 months-1 year: 2 weeks notice
• More than 1 year: 1 month notice

During the notice period, the employee is entitled to take one paid day off per week to find a new position.

Termination & Severance

Employees dismissed without just cause are entitled to severance pay. The amount of this depends on their length of employment:

• 3-6 months: 7 days' pay
• 6 months–1 year: 14 days' pay
• 1 year: 19.5 days' pay
• 2 years: 20 days’ pay
• 3 years: 20.5 days’ pay
• 4 years: 21 days’ pay
• 5 years: 21.24 days’ pay
• 6 years: 21.5 days’ pay
• 7-9 years: 22 days’ pay
• 10 years: 21.5 days’ pay
• 11 years: 21 days’ pay
• 12 years: 20.5 days’ pay
• 13 years and over: 20 days’ pay

Employees fired with just cause are paid only their acquired vacation days and Christmas bonus portion earned that year.

Probationary period

Three months

Minimum Wage

The minimum monthly wage ranges from CRC 316,964 to 680,565, depending on the employee’s skill and education level.

IP protection and non-compete agreements

Non-compete agreements must include compensation to the employee for the duration of the agreement.

Working Hours

48 hours per week.

Overtime

Any work over 48 hours in a week is considered overtime,and is paid at 150% regular wages. On holidays or weekly rest days, its value is doubed. Overtime work cannot exceed four hours per day.

Paid Holidays

Employees are entitled to one day of vacation for every month of work. After 50 weeks of continuous employment, they get 12 working days (two weeks) of paid vacation in a year.

Sick pay and time off

For the first three days of sick leave, the employer and social security each pay 50% of the employee's salary.

From the fourth day on, social security pays the employee 60% of their salary, and the employer is no longer obligated to pay.

Parental leave

Employees are entitled to four months of paid maternity leave, which can be taken one month before and three months after childbirth. This is paid in half by the employer and half by the Costa Rican Social Security Fund.

There is no paternity leave.

Taxes in Costa Rica

<aside> 💡 You can get a detailed breakdown of the employer contributions for any gross salary by using our **Oyster Platform Quote Generator**.

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VAT (13%)

VAT of 13% if required on the total cost of employment in Costa Rica

Employees

Social Security (10.5%)

Income tax

• 0-840,000 CRC: 0%
• 840,000- 1,233,000 CRC: 10%
• 1,233,001– 2,163,000 CRC: 15%
• 2,163,001 – 4,325,000 CRC: 20%
• 4,325,001 and above: 25%

Employers

Total social contributions (26.5%)

• Health and Maternity: 9.25%
• Basic Pension Scheme: 5.25%
• Banco Popular Employer Fee: 0.25%
• Family Asignations: 5%
• Social Aid (IMAS): 0.5%
• INA: 1.5%
• Contribution from Banco Popular Employer: 0.25%
• Labor Capitalisation Fund: 3%
• Complementary Pension Fund: 0.5%
• National Insurance Institute (INS): 1%

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