Payroll and Benefits Guide - Costa Rica

Costa Rica
null

Currency

Costa Rican Colón
null

Capital

San José
null

Employer Taxes

26.67%
null

Date Format

dd/mm/yyyy
null

Fiscal Year

1 Jan – 31 Dec

Fun Facts

Nicoya, Costa Rica is one of the five “Blue Zones” which are places where people consistently live up to 100 years old or more.

In Costa Rica, conventional street addresses are rarely utilized. Instead, directions are given based on recognizable landmarks.

Despite its relatively small size, the country has 5% of the world’s biodiversity.

Since it was abolished 75 years ago, Costa Rica has no military force.

As of 2021, it is the first carbon-neutral country in the world.

Costa Rica is the home to almost 2,000 species of birds.

Costa-Rica

Contributions

Employee Payroll Tax

Medical & Maternity5.50%
Disability, Old Age & Death Benefits4.17%
Workmens Savings Banks1.00%

Employer Payroll Tax

Health and Maternity9.25%
Basic Pension Scheme5.42%
Family Assignations5.00%
Complementary Pension Fund2.00%
Labor Capitalization Fund1.50%
INA1.50%
National Insurance Institute (INS)1.00%
Social Aid (IMAS)0.50%
Banco Popular Employer Fee0.25%
Contribution from Banco Popular Employer0.25%
Solidarity Association (optional cost5.00%

Payroll

Payroll Cycle

Payroll in Costa Rica typically runs on a monthly cycle.

13th Salary

The law requires employers to pay all employees a 13-month salary to be given by December 20th of every year.

Work Hours and Week

A work week may range from Monday to either Friday or Saturday. Daytime employees may only work up to 48 hours while nighttime employees’ legal limit is 36 hours.

Overtime

Any additional hours after the 48-hour cap is considered and paid as overtime with a 150% pay rate and work done on holidays have 200% pay rate. A 4-hour maximum of daily overtime is fixed.
Costa-Rica

Leave

Paid Time Off

At least fifty continuous weeks of employment grants employees 14 days of paid time off. Otherwise, an employee is granted a day of leave per month.

Public Holidays

There are 11 public holidays in Costa Rica.

Sick Days

With the requirement of a medical certificate within 48 hours, all employees are given paid sick leave at a rate of 100% for the first three days. From the fourth day onwards, an employee is paid 60.00% of his normal rate by social security.

Maternity Leave

Pregnant employees are given four months of maternity leave starting on a month before the due date and three months after birth.

Paternity Leave

Fathers working for public entities are entitled eight days of paid leave while the law does not have provisions for those in private agencies.

Parental Leave

Parental leave is also not required by law for employees in private agencies.

Other Leave(s)

Costa Rican employees are given three days of paid time off in the event of a death of an immediate relative.

Termination

Termination Process

The country follows the regular termination process, but compared to other countries, they are not required to give a written dismissal letter to an employee unless requested.

Notice Period

Depending on the length of service, the notice period could be none at all up to a month.

Severance Pay

Like notice periods, the amount of severance pay given to an employee depends on length of service. The lowest amount is 7 days worth of pay at minimum of 3 months of work and peaking at 22 days with 7-9 years of service. It then declines to 20 days from 10 years onwards of service.

Probation Period

Probation Period

It greatly depends on what type of work one is employed, but it typically lasts up to three months.

Immigration

Regardless of a foreigner’s necessity for an entry visa, they still need to get a work visa from either a Consular or the Restricted Visa Commission when they want to conduct any type of work in Costa Rica.

VAT

The commonly used standard rate of VAT in Costa Rica is 13.00%