Employment and labor laws vary from country to country. This guide is intended to provide the most up to date information available. We will update this guide as needed when changes are made to the laws.
Employment Contracts
Employers are legally required to provide formal written contracts for all employees that include salary/wage, termination terms, job title, etc. The contracts must be written in Spanish and use the Costa Rican Colón currency (CRC).
Working Hours
The maximum number of hours an employee can work is 48 hours per week. Nighttime workers, 7p.m.-5a.m., may only work a maximum of 36 weekly hours.
Overtime
Over 48 hours in a week is considered overtime and is paid at 150% regular wages. Pay for work on holidays is at 200%. The maximum overtime allowed to perform daily is 4 hours.
Public Holidays
Each year the government may decide if public holidays falling on weekends will be moved to a weekday or will be lost.
For the year 2024:
- Jan 1: New Year’s Day (Monday)
- Apr 11: Juan Santamaria’s Day (Thursday)
- Apr 4: Holy Thursday (Thursday)
- Apr 5: Holy Friday (Friday)
- May 1: Labor Day (Wednesday)
- Jul 29: Anexion del Partido de Nicoya (Monday)
- Aug 2: Our Lady of Angels Day (Friday)
- Aug 15: Mary’s Assumption and Mother’s Day (Thursday)
- Aug 31: Afro-Costa Rican Culture Day (Saturday)
- Sep 15: Independence Day (Sunday)
- Dec 1: Abolition of the Army Day (Sunday)
- Dec 25: Christmas (Wednesday)
Annual Leave (vacation)
In Costa Rica, the paid annual leave entitlement is dependent on the years of service that the employee has served. The standard paid leave entitlement is 14 days per year for employees with 50 weeks of continuous employment. If the employee has fewer than 50 weeks of employment, they are entitled to one day of leave per month.
Employees are not entitled to accumulate or carry over any leave unless it is agreed upon by the employer and the employee in a written agreement.
Sick Days
Employees in Costa Rica are entitled to full paid sick leave for the first three days of sickness. The employer pays 50.00% of the employees’ regular salary, and the social security pays the remaining 50.00%. From the fourth day of sickness, social security pays 60.00% of the normal daily wage, and the employer is not obligated to pay anything to the employee.
The employee must submit a medical certificate to the social security administration to receive payment within 48 hours of the start of the sick leave.
Maternity and Paternity
Maternity Leave
Pregnant employees are entitled to receive four months of paid maternity leave; 1 month before the due date and three months after the due date.
The maternity payment responsibility is shared equally between the employer and the CCSS (Costa Rican Social Security Fund) for the full four months.
Paternity Leave
Private sector employees are not entitled to paternity leave; fathers holding public sector jobs are entitled to eight days of paid paternity leave.
Paternal Leave
Private sector employees are not entitled to receive parental leave.
Other Leave
In Costa Rica, in the event of the death of an immediate member, an employee is entitled to bereavement leave of three days paid leave.
Employee Severance and Terminations
Termination Process
The termination process varies according to the employment agreement or collective agreement in place and is based on the type of contract and reason for termination.
Individual employment contracts can be terminated by
- By law
- By mutual consent of the parties
- By either party of the employment contract within the terms and conditions provided by the law.
Employers may terminate employment contracts by dismissal for reasons related to the employee (e.g. professional inadequacy, as a disciplinary sanction) or not associated with the employee (e.g. job cancellation).
If the employer requests a dismissal letter, the employer is obligated to present one, whatever the cause of termination was.
Notice Period
In Costa Rica, the notice period for a temporary or permanent employee is dependent on the employee’s length of service as below:
- 0-3 months: No notice required
- 3-6 months: 1 week
- 6 months-1 year: 15 days
- 1 year+: 1 month
Severance Pay
In Costa Rica, the severance pay is dependent on the employee’s length of service as below
- 3 to 6 months: 7 days
- 6 months to 1 year: 14 days
- 1 year : 19.5 days
- 2 years : 20 days
- 3 years : 20.5 days
- 4 years : 21 days
- 5 years : 21.24 days
- 6 years : 21.5 days
- 7 – 9 years : 22 days
- 10 years : 21.5 days
- 11 years : 21 days
- 12 years : 20.5 days
- 13 years+ 21
Probation Period
The probationary period in Costa Rica is dependent on the type of role and is stipulated within the employment agreement. In general, probation periods are three months in which it is possible to end the contract without any justification or compensation being paid.
Payroll Cycle
The payroll cycle in Costa Rica is generally monthly, and payments are to be made once each month.
The minimum wage for 2023 is CRC 11,738.83 for unskilled employees to CRC 15,333.31 per day for specialized employees.
13th Salary
In Costa Rica, it is mandatory to pay a 13th-month salary payment (Christmas bonus-Aguinaldo); the employer must make the payment by 20th December each year.
Contributions
Employer Payroll Contributions
VISA
Costa Rica’s immigration system provides several options for employers of foreign nationals, including mechanisms for business visits, short-term assignments or employment, long-term temporary employment, and adjustment of status to permanent residence.
A business entry authorization allows foreign nationals to perform a wide range of business and professional activities in Costa Rica for up to 30 or 90 days (depending on nationality), provided they do not receive remuneration locally. Visa-exempt nationals may receive the business entry authorization upon arrival, while visa nationals require either a Consular or a Restricted Entry Visa, depending on their nationality. The Restricted Visa Commission must approve a Restricted Entry Visa in Costa Rica before a consulate may issue it.
Foreign nationals seeking to conduct business or work activities for more than 30 or 90 days (depending on nationality) or seeking to conduct any locally remunerated activity in Costa Rica require work authorization. The Short-Stay Visa is used by skilled foreign nationals seeking to conduct business or professional activities for more than 30 or 90 days (depending on nationality) or short-term remunerated work in Costa Rica. It permits work initially from six months to one year.
The primary category of work authorization is the Temporary Residence (either for accredited or non-accredited companies), which is typically granted for two years. Companies accredited by immigration authorities in Costa Rica receive benefits such as a special processing desk for immigration applications with shorter processing times and the ability to work during the processing of their immigration applications.
Companies can register with the General Directorate of Migration and Foreigners and, by so doing, receive special treatment that can see reduced deadlines for the processing of residence applications.
VAT
The standard rate of VAT in Costa Rica is 13.00%.