Hire employees and contractors in Costa Rica

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

Facts & Stats

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)

Grow your team in Costa Rica with Remote

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.

Risks
of misclassification

Employing in Costa Rica

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.

Public holidays

Date
Holiday Name
Extra information
Saturday, January 1, 2022New Year's Day
Sunday, April 10, 2022Holy WeekVary every year
Monday, April 11, 2022Juan Santamaria
Thursday, April 14, 2022Maundy ThursdayVary every year
Friday, April 15, 2022Good FridayVary every year
Sunday, April 17, 2022EasterVary every year
Sunday, May 1, 2022Labor Day
Tuesday, July 26, 2022Annexation of Nicoya
Tuesday, August 2, 2022Virgen de los Angeles
Monday, August 15, 2022Assumption of Mary
Tuesday, September 13, 2022Independence Day
Thursday, December 1, 2022Abolition of the Army
Sunday, December 25, 2022Christmas Day

Minimum Wage

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

  • Unskilled workers: ₡10,652.48 ($17.20)
  • Semi-skilled workers: CRC 11,583.80 ($18.71)
  • Skilled workers: CRC 11,797.05 ($19.05)
  • Specialized worker: CRC 13,914.32 ($22.47)
  • Superior specialization worker: CRC 21,593.60 ($34.87)

Monthly wage rates

  • Generic unskilled worker: CRC317,915.58 ($513.36)
  • General semi-skilled worker: CRC 342,027.40 ($552.30)
  • Generic skilled worker: CRC 359,544.27 ($580.59)
  • General highly skilled: CRC 403,764.18 ($651.99)
  • Technical worker with diversified education qualification: CRC 376,776.77 ($608.41)
  • Technical worker - Superior Education: CRC 464,335.93 ($749.80)
  • Technical worker with higher education diploma: CRC 501,500.15 ($809.81)
  • Technical worker with university bachelors: CRC 568,819.86 ($918.52)
  • Technical worker with graduate qualification: CRC 682,607.23 (1,102.26)

Payroll Cycle

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.

Onboarding Time

We can help you get a new employee started in Costa Rica fast. The minimum onboarding time we need is ten days for your first hire in the country, and just three business days for subsequent hires.

Competitive benefits package in Costa Rica

Remote can help you provide a customized and compliant benefits package for your employees in Costa Rica. If you have questions about developing a competitive benefits plan, let us know and we can help.

  • Medical insurance plan
  • Dental insurance plan
  • Vision insurance plan
  • Additional paid holidays
  • Flexible work schedule
  • Pension scheme
  • Life insurance
  • Other insurance

Taxes in Costa Rica

Learn how employment taxes affect your payroll and your employees’ paychecks in Costa Rica.

  • Employer

    • 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

  • Employee

    • 5.5% - Medical and maternity contribution

    • 4.0% - Disability, old age, and death benefits

  • Employee income taxes

    • 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)

Types of leave

Paid time off

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.

Public holidays

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.

  • Juan Santamaria,
  • Annexation of Nicoya,
  • Mother’s Day, and
  • The Assumption of Mary

And should an employee be required to work on a public holiday, the employer will provide a replacement holiday within 15 days.

Sick leave

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.

Maternity leave

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.

Paternity/Parental leave

There are no provisions for private employees to receive paternity or parental leave under Costa Rican labor law.

Employment termination

Termination process

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 period

Notice periods required under Costa Rican law depend on an employee’s tenure, ranging between 1 week and a month.

  • 0 – 3 months: No notice period
  • 3 – 6 months: 1 week
  • 6 – 12 months: 15 days
  • 1+ year: 1 month

Severance pay

Severance pay entitlements are issued based on an employee’s tenure with the employer.

  • 3 – 6 months: 7 days pay
  • 6 – <12 months: 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: 20 days’ pay

Probation periods

The Probation Period is maximum of 3 months. It is common to apply the maximum probation period to senior roles.

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