While onboarding any individual from Costa Rica, the employer should know about the employment terms, Labor laws, deductions, and benefits. This section has all the necessary information that employers can use.
Employee Contract
Public and Provincial Holidays
Leave Information
Basic
According to the Costa Rica Labor Laws, an Employment contract is necessary and should be in Spanish or English mentioning all the terms and conditions of the employer. The contract has to be provided within one month of commencement.
Probation Period
The probation period in Costa Rica is 90 days.
13th Month Pay
The 13th-month pay in Costa Rica is mandatory.
Employee Benefits
- Health Insurances
- Pension Scheme
- Bonuses
- Leaves
- Allowances
The payroll cycle is monthly in Costa Rica.
In Costa Rica, the minimum wage varies from CRC10,875.11 to CRC696,873.72 per day for Unskilled workers to Technical Workers (University graduates), respectively.
The standard working hours in Costa Rica are 8 hours a day and 48 hours a week. Overtime in the country is termed as exceptional, and an individual is allowed to extend working hours only on high necessity. The overtime pay is generally 50% of the regular daily wage. However, overtime on a holiday must be compensated at twice the regular wage.
Employer Payroll Cost:
| Scheme |
Employer’s Contribution |
| Disability, Old-Age and Death Insurance (IVM) |
5.75% |
| Mandatory Pension Regime |
3.25% |
Employee Payroll Cost:
| Scheme |
Employer’s Contribution |
| Medical and Maternity |
5.5% |
| Disability, Old age and Death Benefits |
4.5% |
| Workmans Savings |
1% |
Employee Income Tax
| Monthly Taxable Income (Costa Rican colones, CRC) |
Tax Rate (%) |
| 0 to 863,000 |
0% |
| 840,001 to 1,267,000 |
10% |
| 1,267,001 to 2,223,000 |
15% |
| 2,223,001 to 4,445,000 |
20% |
| Above 4,445,000 |
25% |
*CRC is Costa Rica Colones.
VAT
Standard rate of VAT in Costa Rica is 13%.
In Costa Rica, either the employer or the employee can terminate the employment contract without any responsibility.
The notice period in Costa Rica is 14 days.
Severance pay
The severance pay is the average earning of the individual in the last six months of service in Costa Rica.
In order to stay and work in Costa Rica, individuals have to get a “Special Category Permit”. This permit allows the individual to stay and work in Costa Rica under the Ministry of Labour and Social Security.