Remote’s guide to employing in Costa Rica.
Capital city
San José
Currency
Costa Rican colón
(₡, CRC)
Population size
5,094,118
(est. 2020)
Languages spoken
Spanish
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The Republic of Costa Rica is a sovereign unitary presidential constitutional republic. The Central American country is recognized within the region for its stable democracy, press freedom, and high per capita income. Costa Rica also registers a strong rating on the human development index compared with Latin American neighbours.
Costa Rica’s economy has witnessed significant strides driven by an educated population, diversification from agriculture, and investment and tax incentives that have earned it the colloquial tag of Switzerland of Central America.
Capital city
San José
Currency
Costa Rican colón
(₡, CRC)
Languages spoken
Spanish
Population size
5,094,118 (est. 2020)
Ease of doing business
Easy
Cost of living index
50.64 (2021)
Payroll frequency
Monthly
VAT - standard rate
13%
GDP - real growth rate
2.1 (2019)
To employ in Costa Rica, companies must own a local legal entity in the country or work with a global employment solution. Managing payroll, benefits, taxes, and compliance in Costa Rica can get complicated, especially without established local relationships.
Remote’s global employment solution makes it easy for your company to employ workers in Costa Rica quickly, efficiently, and in full compliance with all applicable labor laws. We take on the responsibility and legal risks of international employment so you can focus on hiring great talent and growing your business.
The Costa Rican Labor Code (Código de Trabajo) is the preeminent statute guiding employment relations and spells out provisions for employee protections and workers’ rights. Employees in Costa Rica enjoy protections against discrimination based on age, religion, sexual orientation, gender expression, and race.
Common questions that could come up during the hiring process include the minimum wage, overtime rates, and guaranteed paid time off. Remote can help you offer a complete, competitive, and compliant benefits package to your employees in Costa Rica.
Date | Holiday Name | Extra information |
---|---|---|
Saturday, January 1, 2022 | New Year's Day | National Holiday |
Monday, April 11, 2022 | Battle of Rivas | National Holiday |
Thursday, April 14, 2022 | National Holiday | |
Friday, April 15, 2022 | Good Friday | National Holiday |
Sunday, May 1, 2022 | Labor Day/May Day | National Holiday |
Monday, July 25, 2022 | Annexation of Guanacaste | National Holiday |
Tuesday, August 2, 2022 | Our Lady of Los Angeles Day | National Holiday. Non Compulsory Payment Holiday |
Monday, August 15, 2022 | Assumption of Mary/Mother's Day | National Holiday |
Monday, September 19, 2022 | Independence Day | National Holiday |
Monday, December 5, 2022 | Day of Abolition of the Army | National Holiday. Non Compulsory Payment Holiday |
Sunday, December 25, 2022 | Christmas Day | National Holiday |
The Costa Rican minimum wage is set on a sliding scale depending on an employee’s skill level or educational qualification.
Minimum wage ranges from 9,598.73 CRC per 8-hour workday for unskilled workers to 12,537.91 CRC per day for specialized workers.
The monthly minimum wage ranges from 10,652.48 to 682,607.00 CRC per month depending on the employee’s skill and education level.
Daily wage rates
Monthly wage rates
For customers of Remote, all employee payments will be made in equal monthly installments on or before the last working day of each calendar month, payable in arrears.
Note that a 13th salary or 13th month salary payment in Costa Rica is mandated by law. The 13th salary must be paid by the 20th of December and will be equal to one month’s pay. The payment is commonly known in Costa Rica as Aguinaldo Salary.
We can help you get a new employee started in Costa Rica fast. The minimum onboarding time we need is seven days for your first hire in the country, and just three business days for subsequent hires.
At Remote, we’re obsessed with helping you craft the best possible employee experience for your team. We are leading the way in practicing “fair equity,” which means making sure employees everywhere have access to both the required and supplemental benefits they need to thrive (and that will allow you to attract the best local talent).
Our benefits packages in Costa Rica are tailored to fulfill the local needs of your employees. Typically, our packages contain some or all of the following benefits:
Learn how employment taxes affect your payroll and your employees’ paychecks in Costa Rica.
30% - Corporate tax rate
9.25% - Health & Maternity
5.25% - Basic Pension Scheme
0.25% - Banco Popular Employer Fee
5.0% - Family Assignations
0.5% - Social Aid: (IMAS)
1.5% - INA
0.25% - Contribution from Banco Popular Employer
3% - Labor Capitalization Fund
0.5% - Complementary Pension Fund
1% - National Insurance Institute
5.5% - Medical and maternity contribution
4.0% - Disability, old age, and death benefits
0% - Up to CRC 817,000 ($1319.28)
10% - CRC 817,001 to 1,226,000 ($1319.28 - $1979.72)
15% - CRC 1,226,000 to CRC 2,103,000 ($1979.72 - $3395.88)
20% - CRC 2,103,000 to CRC 4,205,000 ($3395.88 - $6790.15)
25% - Over 4,205,000 ($6790.15)
Employees are entitled to two weeks of paid vacation annually once they have worked with an employer for an entire year. Many Costa Rican employers increase the number of allotted days off per year as a benefit for the employee.
Employees can take nine paid public holidays off and non-Catholics are entitled to paid time off to observe religious holidays such as Yom Kippur, Eid-el-Fitr, etc.
Whenever the following holidays fall on any day other than a Monday, employees will take the following Monday off in place of the holiday.
And should an employee be required to work on a public holiday, the employer will provide a replacement holiday within 15 days.
Employees are entitled to sickness benefits from both the employer and the social security office, provided they’ve made the latter’s required contributions.
For the first three days of an illness, employees can draw a sickness benefit equivalent to their full wages, with 50% paid by the employer and 50% paid by the social security office.
The employee will draw wages equivalent to 60% of their normal wages from the fourth day, paid by the social security office.
Female employees are entitled to 4 months of maternity leave, starting a month before delivery, and compensated at a 100% rate, paid 50:50 by the employer and the social security office.
There are no provisions for private employees to receive paternity or parental leave under Costa Rican labor law.
Employee contracts can be terminated if a just cause is established, such as dishonesty, negligence, fraud, redundance, or any other tangible reasons, with notice provided in advance and stipulated below.
Notice periods required under Costa Rican law depend on an employee’s tenure, ranging between 1 week and a month.
Severance pay entitlements are issued based on an employee’s tenure with the employer.
The Probation Period is maximum of 3 months. It is common to apply the maximum probation period to senior roles.