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The Costa Rican Colón is the official currency of Costa Rica. Its currency symbol is ₡, CRC.
26.5% of employees salary
Spanish is the official language and has been since the Spanish colonisation in the 16th century.
The population of Costa Rica is 5.139 million
Usually paid monthly
To start growing your team in Costa Rica, you must establish a local entity- including an account with a local bank, a local office and an address registered as a subsidiary.
This allows you to manage payroll, tax, benefits and compliance for your employees, but can take several months.
Emerald can hire and payroll your workers, quickly and compliantly with their ready to go entity. Make growing your team simple with Emerald as a global partner.
Costa Rica is extremely popular due to its highly skilled workforce, innovative technology, and the benefits it provides companies. The workforce has the highest literacy rate in Latin America due to the government’s commitment to transforming the country’s talent. Costa Rica is widely described as home to the top human capital in Latin America. Companies from the US and the UK tend to utilise the Costa Rican workforce to take advantage of the low labour costs compared to their home country.
Latin America is well-known overall for low attrition and Costa Rica has a great reputation of low attrition amongst developers specifically. This allows companies to invest in a team for an uninterrupted workflow which is highly attractive to tech start-ups, where IP protection is a priority. Costa Rica is invested in growing its tech industries. San Jose is becoming popular for its fast growth in the IT sector, as well as developing its digital tech across the region.
However, due to the country’s workforce being so sought after, the number of skilled developers available is low. Therefore, although labour costs are lower than in some countries, Costa Rica’s competitive working environment means that it may not be the most cost-effective destination for small start-ups to expand. Costa Rica’s labour laws are known for being employee-friendly, which can be difficult for employers.
Costa Rica is a favourite for tourists and is consequently popular amongst the remote working community, due to its affordable living costs, large expat communities, and
fast internet.
Costa Rica offers a short-term visa for remote workers which allows foreign nationals to reside in, and work remotely from, Costa Rica without sponsorship for one year. To
qualify, workers must be employed outside of Costa Rica and have a monthly salary of at least USD $3,000.
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| Employer payroll contributions are generally estimated at an additional 26.67% on top of the employee salary in Costa Rica. | |
| Social Security | 27.67% - 28,67% |
| Occupational Risk Insurance | 1% - 2% |
Basic Pension (Old age, invalidity and survivors)
Sickness and Maternity
Family and Household Benefits
National Training Institute
Social Welfare Institute (Instituto Mixto de Ayuda Social – IMAS)
Worker Owned Development Bank (Banco Popular y de Desarrollo Comunal)
Workers Pension Fund (Fondo de Capitalización Laboral-FCL)
Complementary Pension Fund
National Insurance Institute
Accidents at Work and Occupational Diseases
Contracts in Costa Rica must include:
Non-compete provisions are permitted in Costa Rica if they are reasonable. The employee will need to be paid during any periods of restriction. The terms will need to be assessed on a case-by-case basis including activities, geographical restrictions, and payment. If no agreement is in place for payment, it is commonly 50% of the standard salary. Non-solicitation provisions are also permitted in Costa Rica.
Probation periods in Costa Rica are generally 3 months. However, this can vary depending on the industry and role of the employee.
Emerald Technology can onboard employees in Costa Rica within 48 hours.
During employment, employees are obliged to respect their employer´s intellectual property, confidentiality and non-compete provisions. There are no specific laws around restrictive covenants after the termination of employment.
However, the constitution provides freedom of work, which means that the employee may challenge any non-compete or non-solicitation provisions after termination of employment. The employee is obliged by labour laws not to compete during any current employment relationship. Restrictive Covenants, such as non-compete or non-solicitation of customers, after termination of employment will need to comply with specific requirements.
Costa Rica’s healthcare system is run by the Costa Rican Social Security Fund (CCSS) (Caja Costarricense de Seguro Social). When registered with the CCSS, employees
will have access to free services such as doctors’ appointments, inpatient care, outpatient, maternity services, surgery, medications, dental care, optical care, and emergency services.
Costa Rica’s healthcare system is very highly regarded in Latin America, ranking amongst one of the highest in the Americas. Around 30% of Costa Rica’s population have private health insurance and it is a very common option for foreign workers. This is because it is a lot easier to access English speaking staff in private hospitals and the wait times are considerably shorter.
Social security contributions in Costa Rica are compulsory and are based on an employee’s earnings. The Costa Rican Social Security Fund (Caja Costarricense de Seguro Social) is in charge of most of the public health sector.
Both the employer and employee have mandatory contributions. The contributions cover items such as maternity benefits, health protection, work accidents, unemployment, child benefits, disabilities, and old age
Expectant mothers are entitled to four months’ maternity leave. This is taken one month before the expected due date and three months after. The cost of maternity leave is split equally between the employer and the CCSS (Costa Rican Social Security Fund). Fathers working in the private sector are not entitled to paternity leave. Fathers working in the public sector are entitled to eight days’ paid paternity leave.
Fathers working in the public sector are entitled to eight days’ paid paternity leave.
An employee is entitled to the first three days of sick leave at full pay. This is split between the employer and social security. After three days, the employer is not obliged to make continued payments, but social security will pay 60% of the employee’s salary.
The employee must ensure a medical certificate is submitted to the social security administration within 48 hours of the start of the sick leave to receive payment. Employees are also entitled to three days’ paid bereavement leave.
As the legal employer, Emerald Technology requires the following employee documents to ensure complete compliance:
When an employer dismisses an employee it must be with just cause and they must give them notice. The notice period starts from the day after the employer notifies the employee of the termination. Notice must be given in accordance with the following schedule at a minimum:
The employee may terminate their employment by providing notice in writing. The required notice period will depend on the length of service, as follows: | |
| 3-6 months: | 1 week’s notice |
| 6-12 months: | 2 weeks’ notice |
| 12+ months: | 1 month’s notice |
Termination processes may vary depending on if any agreements were negotiated when the employee was initially employed. If an employee is terminated without just cause an advance notice (Preaviso) must also be provided. The advance notice period is 30 days and if the employee is not required to work during this time, the equivalent salary must be paid in addition to any severance payment. | |
If an employee is made redundant, they are entitled to a payment based on years of continuous service.
If an employee is terminated without just cause, they will be entitled to a severance payment (Prestaciones Laborales) The below table is a guide to severance payments depending on length of service. In addition to severance payments, the employee will also be entitled to payment of any accumulated holiday pay and the pro-rated Christmas bonus. | |
| 3-6 months | 7 days salary |
| 6-12 months | 14 days salary |
| 1 year | 19.5 days |
| 2 years | 20 days |
| 3 years | 21 days |
| 4 years | 21.24 days |
| 5 years | 21.5 days |
| 6 years | 22 days |
If an employee is terminated with just cause this must be based on one of the grounds set out in Article 81 of the Costa Rican Labour Code. The employer holds the burden of proof, so the cause will need to be well justified. The employer will also need to personally deliver a dismissal letter to the employee clearly outlining the facts behind the dismissal. Employees dismissed with cause will not be entitled to notice or severance payments. They will only be entitled to payment of owed salary, accumulated holiday and the pro-rated Christmas bonus. | |
Full-time employees are entitled to one days holiday for each month worked, and two weeks after 50 weeks of employment. Employees are not permitted to carry over
annual leave unless there is a written agreement.
There is no set minimum wage in Costa Rica. Pay rates are generally agreed upon directly with the employer and stated on the contract of employment or through a
collective bargaining agreement. As a general guide, pay rates per day should not fall below the following, according to skill level of the employee. The below rates are in
Costa Rican Colon (CRC).
| Unskilled worker | 10,875.11 CRC |
| Skilled worker | 12,043.60 CRC |
| Specialised worker | 14,205.12 CRC |
| General skilled worker | 367,058.74 CRC |
| General highly skilled worker | 4,12,202.85 CRC |
| Technical worker university graduate | 696,873.71 CRC |
The maximum number of hours an employee may work in Costa Rica are 48 hours per week for daytime hours, and 36 hours for night work. If an employee works over 48 hours this is considered overtime and will be paid at an additional 50% of the hourly salary. Employees should not work more than 12 hours per day including overtime.
Salaries in Costa Rica are generally paid on a monthly basis, manual employees must be paid every 15 days. A 13th month salary payment (Aguinaldo) is mandatory. This
must be paid within the first 20 days of December.
It is the employer’s responsibility to ensure taxes are paid from salaries before payments are made to employees. The general personal income tax rates are listed below as guidance.
| Earnings per month | Percentage of Tax |
| 0 – 863,000 CRC | 0% |
| 863,001 – 1,267,000 CRC | 10% |
| 1,267,001- – 2,223,000 CRC | 15% |
| 2,223,001 – 4,445,000 CRC | 20% |
| 4,445,001 + | 25% |
.
Similar to other countries, Costa Rica has strict rules on classifying individual contractors and full-time employees differently. Misclassifying your workers can put your business at risk of fines.
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