EMPLOYER OF RECORD IN COSTA RICA
Expand your orbit in Costa Rica.
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Costa Rica at a glance
CRC
Currency, Costa Rican Colón, ₡
5.2M
Population
100.25B
GDP
74th
Ranked Ease of Doing Business
Spanish
Language
Monthly
Payroll cycle
What it’s like to hire in Costa Rica
Growing across the globe is complex—Pebl’s EOR solution helps keep it simple no matter what’s on the horizon for your business.
As one of Latin America’s highly favored investment locations, Costa Rica is widely recognized for its high-quality workforce, economic sustainability, democratic history, political stability, and dynamic business sector. Hiring talented individuals is easier with the help of an employer of record in Costa Rica.
Expanded and specialized trade due to various commercial agreements and economic diversification in the tourism, manufacturing, and services sector has been the source of success for Costa Rica’s economy.
Costa Rica compares favorably to its neighbors in areas of human development. The country has some of the best social indicators in the region for education and health.
Eco-tourism is Costa Rica’s top business since Costa Rica is home to a handful of immaculate beaches, hot springs, volcanoes, mountains, rainforests, waterfalls, and more. Costa Rica’s unmatched biodiversity is what makes it a major destination.
Costa Rica is widely recognized for its high-quality workforce, economic sustainability, democratic history, political stability, and dynamic business sector
Hiring in Costa Rica
In Costa Rica, a verbal employment contract is only permitted for agricultural or livestock work carried out in a field, as well as accidental and temporary work which does not exceed 90 days. In all other cases, an employment contract is required in writing.
- The employment contract is required to have the following information:
- Names, nationality, age, sex, marital status, and country of permanent residence for the contracting parties
- Identity document number
- Employee’s residence
- Fixed-term or indefinite-term contract
- Working hours
- Salary
- Employer’s tools that will be provided, if applicable
- Work location
- Any other conditions to which the contracting parties agree
- Place and date of the conclusion of the contract
Easily navigate payroll laws, contributions and requirements in Costa Rica.
Following payroll laws in Costa Rica is essential. Using an employer of record in Costa Rica ensures compliance with all local and national laws.
February 15
Tax Due Date In Costa Rica, the tax year runs from October 1 to September 30. The filing deadline for tax returns is February 15.
Monthly
Payroll cycle in Costa Rica The payroll cycle in Costa Rica is generally monthly, where payments are made at the end of the month.
48 hrs/wk
Average working hours in Costa Rica Costa Rican daytime working hours are eight hours a day with no more than 48 hours per week.
Easily navigate payroll laws, contributions and requirements in Costa Rica.
Unlike most countries, Costa Rica does not have a legally mandated minimum employee pay rate. Instead, the National Salary Council of the Ministry of Labor and Social Security publishes a revised minimum wage scale in Costa Rica for a comprehensive list of job titles and skill levels every six months. Additionally, pay rates are usually agreed upon with the employer through a collective bargaining agreement or employment contract.
Tax and Social Security in Costa Rica
Individuals are subject to Costa Rican income tax laws if their professional services are provided in Costa Rica. If the employment relationship is physically based and carried out in Costa Rica, the employees are subject to Costa Rican tax law.
Costa Rica’s tax year runs from October 1 to September 30.
Tax thresholds in Costa Rica
As of 2022, the Costa Rican income tax brackets are as follows:
The corporate income tax rate in Costa Rica is 30%.
Social security payments due on employees’ monthly salaries are 10.5%, and the employer withholds them.
Leave Entitlements in Costa Rica
- Article 153 of the Costa Rican labor code guarantees employees annual paid leave in a minimum amount of two weeks for every 50 weeks worked. Employees are entitled to one day of vacation for every month of work.
Employment benefits in Costa Rica
Costa Rica’s government benefits programs are administered by the Caja Costarricense del Seguro Social (CCSS), the Costa Rican Social Security Administration. The CCSS was founded in 1941 and is responsible for providing social security services to Costa Rican society. The CCSS collects contributions from employers and employees to maintain the Costa Rican Social Security regime, which maintains old-age retirement pensions, pensions due to death, illness and injury benefits, disability benefits, involuntary unemployment benefits, and parental leave.
Termination and notice period in Costa Rica
After the first three months of an employment contract, both the employer and employee are obliged to give the other notice of termination or resignation.
Notice periods from employees in Costa Rica vary according to the length of employment. The breakdown is as follows:
- Less than three months of employment: no notice required
- Three to six months of employment: one week’s notice required
- Six months to one year of employment: two weeks’ notice required
- More than one year of employment: one month’s notice required
During the notice period, employees can take one paid day off per week. Employers can waive the notice period given by employees without being required to compensate them. When an employee is dismissed without just cause, they must be compensated with notice and severance.
Notice periods from employers in Costa Rica vary according to the length of the employment relationship. The breakdown is as follows:
- An employment relationship between three and six months: one-week notice required
- An employment relationship between six months and one year: 15 days' notice required
- An employment relationship of more than one year: one month’s notice required
Severance payments in Costa Rica vary according to the length of employment. The breakdown is as follows:
- Three to six months: seven days of pay
- Six months to one year: 14 days of pay
- One year: 19.5 days of pay
- Two years: 20 days of pay
- Three years: 20.5 days of pay
- Four years: 21 days of pay
- Five years: 21.24 days of pay
- Six years: 21.5 days of pay
- Seven to nine years: 22 days of pay
- Ten years: 21.5 days of pay
- Eleven years: 21 days of pay
- Twelve years: 20.5 days of pay
- Thirteen years and beyond: 20 days of pay
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