Employer Record in Costa Rica

Basic information

Capital: San José

Time zone: GMT-6

Languages: Spanish

Currency code: CRC

Human Resources at a Glance 

Contract Terms

Contracts must be in Spanish and can be bilingual. They must be in writing and signed by both parties.
A contract must include:

• Name
• Hours of work
• Compensation
• Duties and responsibilities
• Termination conditions

Guidelines Regarding Probation Period/Trial Period

Probation periods are not mandatory. The minimum probation period is 30 days and the maximum probation period is 90 days (3 months).

Regulations and Rules Regarding Working Hours

Standard working hours are 8 hours per day, 40 hours per week. The standard workweek is from Monday to Friday.

Overtime is paid according to the following rates

Any overtime shall be paid at 150% of the employee’s regular salary.

Minimum Wage Requirements

The minimum wage depends on the occupation and education of the worker:

• Worker in specialized occupation: CRC 13,914.32
• Worker in higher education CRC 21,593.60
• Higher Education Technician CRC 464,335.77
• University Bachelor CRC 568,819.96
• University Degree CRC 682,607.23

Payroll Cost for Employers

The employer cost is generally estimated at 27.04% of the employee salary.

• Social Security (CCSS) – 26.67%
• Workman Compensation – 0.37%
  One-time costs:
• Vacation Pay – 4.17%
• Preaviso – 8.33%
• Cessentia – 5.33%
• 13th Month Salary Accrual (Aguinaldo) – 8.33%
  All salaried employees are entitled to a 13th month salary which is due once per year in December. This cost will be accrued monthly at the rate of 8.33% of one month’s salary and paid in December.
  Holidays are accrued each month at the rate of 4.17% of one month’s salary and must be paid when the employee takes vacation days.
  Compensation for Time of Service (Preaviso and Cesantia) is accrued each month at the rate of 0.14 of one month’s salary and must be paid at end of working relationship.

Termination

Grounds

erminations must respect complex rules and the rules of an employee’s employment country. The off-boarding is always handled by the Employer with the primary stakeholders. It may include ad-hoc fees as well as required or recommended steps on specific termination cases.
Terminations in Costa Rica can be complex. There is no at-will termination in Costa Rica for employers, outside the probation period, and termination must be done for just cause.
Compliant terminations include:

• As agreed on in the Employment Agreement
• Retirement
• Resignation
• Dismissal by the employer
• Mutual agreement
• For serious breach of the obligations by the employee

Notice Period

The minimum notice period is 1 week and will be increased according to the length of the employment.

• Less than 3 months of employment or Probation period – no obligation
• Between 3 to 6 months of employment – 1 week of notice
• Between 6 to 12 months of employment – 2 weeks of notice
• Above 12 months of employment – 1 month of notice

Severance compensation

All employees who quit for cause, or who are terminated without cause by the employer, are entitled to severance pay. Severance pay is based on the length of employment and the amount of the salary.

Severance is based on the average salaries earned and paid over the past 6 months or 12 months depending on the situation.

Length of employment	Amount of severance pay
Between 3 to 6 months	7 days
Between 6 to 12 months	14 days
1 year	19.5 days
2 years	20 days
3 years	20.5 days
4 years	21 days
5 years	21.25
6 years	21.5
7 – 13 years	22 days
13 or more years	20 days

In all cases, the employee must be paid any accrued vacation and earned bonuses.

Payment & leave Compensation & Holidays

SalaryPayment

Monthly

Payslip Payroll

No explicit provision.

Annual Leave

Terminations must respect complex rules and the rules of an employee’s employment country. The off-boarding is always handled by the Employer with the primary stakeholders. It may include ad-hoc fees as well as required or recommended steps on specific termination cases.
Terminations in Costa Rica can be complex. There is no at-will termination in Costa Rica for employers, outside the probation period, and termination must be done for just cause.
Compliant terminations include:

• As agreed on in the Employment Agreement
• Retirement
• Resignation
• Dismissal by the employer
• Mutual agreement
• For serious breach of the obligations by the employee

Sick Leave

There is no maximum limit for employees to take sick leave.

The employee gets 100% of their salary on the first 3 days of the sick leave, this cost is covered by the employer. From the 4th day onwards, until the end of the disability, the CCSS pays 60% of the salary.

During this time, the employer is still obligated to pay the CCSS premium for the employee during the disability.

Maternity & Parental Leave

Pregnant employees, who have worked for a minimum of 90 days, are entitled to 120 days of paid leave. 30 days must be taken before the child’s birth. 90 days must be taken after the child’s birth.

The employee will receive 100% of the salary during this period, where 50% of the salary is covered by the employer, and the remaining 50% of the salary is covered by CCSS.

In the case of illness caused by pregnancy or childbirth, the employee can extend leave up to 6 months.

In Costa Rica, no law covers parental leave. However, employees may be entitled to maternity leave and paternity leave.

Tax and Social Security Information

Personal Income Tax

  The individual income tax ranges from 0% to 25%. Income tax is calculated according to progressive rates.

Gross Annual Income (CRC)	Tax Rate (%)
Upto 863,000	0%
863,000 – 1,267,000	10%
1,267,000 – 2,223,000	15%
2,223,000 – 4,445,000	20%
Above 4,445,000	25%

Social security

• Social Security (CCSS)
• Work Accident Compensation Insurance
• Private Healthcare – Unisure (optional)
• Private Healthcare – Allianz (optional)

Public Holidays 2024

Holidays	Date
New Year’s Day	1.1
Maundy Thursday	3.28
Good Friday	3.29
Battle of Rivas	4.15
Labour Day	5.1
Annexation of Guanacaste	7.25
Mother’s Day	8.15
Independence Day	9.15
Christmas Day	12.25