The Republic of Costa Rica (República de Costa Rica) is situated in Central America and covers an area of 51,766 square kilometers. It shares borders with Nicaragua to the north, the Caribbean Sea along the northeastern coastline, Panama to the southeast, and the Pacific Ocean along the southwestern coastline. The country’s population is largely urban with the rural population accounting for less than 25% of the inhabitants. The services industry accounts for around 67% of the Gross National Product (GNP).
*Please note that the official currency is the currency of remuneration when employed through WorkMotion in Costa Rica.
Capital : San José | Currency : Costa Rican Colón (₡, CRC) | Languages spoken : Spanish |
Population : 5.09 million (2020 est.) | Minimum wage 2023 : CRC 752,220.04 (monthly) | Cost of Living index : $$ (67 of 139 countries) |
Payroll Frequency : Weekly/Fortnightly/Monthly | VAT - standard rate : 13% | GDP - real growth rate : -4.1% (2020 est.) |
The holidays mentioned below are valid for the year 2023.
The approximate time for sharing the contract with an employee in Costa Rica is 14 business days assuming no special requests or changes to our standard employment contract. Any such requests or changes would need to undergo internal and external review, directly leading to a time delay.
NOTE: This number is subject to change and is only an estimation of the Contract Sharing Time. The estimated Contract Sharing Time begins from the moment that WorkMotion has received all required information from both the client and the employee.
Daytime working hours are eight hours per day or up to a maximum of 48 hours per week. The working hours can be extended to nine per day provided the work and its environment do not adversely affect the health of the employee. Employees are entitled to a minimum rest period of 30 continuous minutes.
Work performed beyond the stipulated normal working hours is classified as overtime. The maximum overtime that an employee can work is four hours per day (maximum 12 working hours per day inclusive of overtime). Overtime is not permitted in unhealthy or dangerous jobs.
Overtime work is paid at plus 50% of the normal wage rate. When overtime is worked on holidays, it is paid at double the rate.
The Labor Code does not specifically provide for a probation period, but it is a customary practice to give a probation period of three months.
Each of the parties may terminate the contract without just cause, by giving prior notice to the other, in accordance with the following rules:
| Period of Continuous Work | Applicable Notice Period |
| 0 to 3 months | No notice required |
| From 3 months to 6 months | 1 week |
| Over 6 months to 1 year | 15 days |
| Over 1 year | 1 month |
An employee accrues annual leave at the rate of one day for every month of employment or two weeks for every 50 weeks of employment. The leave is paid for by the employer.
Ordinarily, an employee is expected to take all their leave at one time. Where the nature of the work precludes this, and by agreement between the employer and the employee, the leave may be divided into two segments that are more than 15 weeks apart.
Employees are entitled to sick leave when such a condition leaves them unable to perform their duties normally for a period not exceeding three months.
It is the obligation of the employer to give leave to the worker, up to total restoration, provided that it occurs within the indicated period, and in accordance with the following rules:
A pregnant employee is entitled to four months (120 days) of mandatory paid leave, one month of which is to be taken before birth. The employer pays 50% for the four months and the Social Security Administration pays the other 50%.
Birth parents are granted paternity leave of two days per week during the first four weeks after the birth of their son or daughter. The employer has an obligation to grant permission to the father to spend time with his newborn child.
During this leave, the employee receives 50% of the salary from the employer and the other 50% from the Social Security Administration (CCSS).
Upon submitting a certificate from the National Foundation for Children or a family court confirming an adoption to the employer, an employee has a right to three months’ paid adoption leave beginning on the date the child arrives. The leave is paid for by the employer (50%) and the Social Security Administration.
The employer is obliged to facilitate an employee’s participation in the voting process by providing the time necessary, with pay in cases where the voting hours are within the working hours of the employee.
Social Security in Costa Rica provides medical assistance, maternity assistance, and pensions. Employers pay approximately 26.67% of wages towards statutory benefits.
An overview of the statutory benefits is presented in the table below:
| Category | Employer Contribution |
| Basic Pension (Old age, invalidity and survivors) | 5.42% (gradually increasing to 5.75% by 2035) |
| Sickness and Maternity | 9.25% of monthly covered payroll. |
| Family and Household Benefits | 5% of monthly payroll |
| National Training Institute | 1.5% |
| Social Welfare Institute (Instituto Mixto de Ayuda Social – IMAS) | 0.5% |
| Worker Owned Development Bank (Banco Popular y de Desarrollo Comunal) | 0.5% |
| Workers Pension Fund (Fondo de Capitalización Laboral-FCL) | 1.5% |
| Complementary Pension Fund | 2% |
| National Insurance Institute | 1% |
| Accidents at Work and Occupational Diseases | Premium varies according to assessed degree of risk. |
The employer contributes 9.25% of gross monthly payroll towards sickness and maternity.
To qualify for cash sickness benefits, one must have at least six months of contributions in the 12 months before the incapacity began and have contributed in the month immediately before the incapacity began. There is no minimum qualifying period for other medical benefits.
The employer is responsible for the total cost of accident insurance through paying insurance premiums that vary depending on the assessed degree of risk.
To qualify for coverage an employee must be assessed with a work injury or occupational disease. Accidents that occur while commuting to and from work are covered.
The employer pays 1.5% to the Labor Capitalization Fund.
It is a labor-saving that employees can use or withdraw when any of the following conditions happen:
The employer contributes 5.42% of the gross monthly covered earnings of all employees towards social insurance which covers old age, invalidity, and survivors benefits.
To qualify for old-age benefits, participants must be at least 65 years of age with at least 300 months of contributions. The retirement age may be reduced with additional months of contributions to as low as age 61 years and 11 months with at least 462 months of contributions (men) or age 59 years and 11 months with at least 450 months of contributions (women).
The employer contributes 5% of payroll towards family and household benefits that finance the Family Allowance and Social Development Fund (FODESAF).
The program is a social assistance system for needy persons and households with school-aged children.
The information contained in this Country Guide is provided for informational purposes only and should not be construed as legal advice on any subject matter. The contents of this Country Guide contain general information and may not reflect current legal developments or address your situation. You should not act or refrain from acting on the basis of any content included in this Country Guide without seeking the advice or representation of a licensed attorney. WorkMotion Software GmbH disclaims all liability for actions you take or fail to take based on any content included in this Country Guide.
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