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Employee & Labor Laws



All salaried employees must be registered with Social Security. The employer must pay 25% of the total salary amount into Social Security with an additional 9% being deducted from the employee’s wages. This covers the employee for medical care, hospitalization and other medical costs. 3% of this amount is a contribution to the employee’s savings and pension fund.


The law requires one day of vacation for every month of employment. A two week vacation is due after fifty weeks of work. The employer can choose the time the vacations are taken and can require that half be taken at two different times but they must be granted within 15 weeks of the time when they are due. Vacations cannot include weekends or paid holidays and must be a regular working day.


Paid holidays are:

  January 1 Easter Thursday & Friday
  April 11 May 1
  July 25 August 15
  September 15 December 25

Other holidays for which pay is not required for hourly employees are August 2nd and October 12th. Salaried employees are paid for these days whether they work or not. Employees who work on statutory holidays or Sundays are paid double time. The standard working week is 48 hours.


Income tax must be withheld from the employee and submitted to the government by the employer. There are no personal income tax forms for employees. Details on the percentage of tax on personal salaried income amounts are available at the Costa Rican tax offices. There is also an income tax table for self-employed individuals.


Personal injury insurance similar to workers’ compensation must be carried to cover all employees. This policy must be purchased from the INS, the Costa Rican government owned insurance institute. It is approximately 2% - 3% of wages depending on the type of work. Private personal injury insurance is not permitted in Costa Rica.


If an employee is dismissed without cause, "aguinaldo", vacation pay, notice, and termination pay must be paid to them. If an employee is dismissed with cause or quits, aguinaldo and vacation pay must still be paid by the employer.

PREAVISO (Advance Notice) – The law requires 30 days advance notice to be given of impending termination. If no advance notice is given, 30 days pay is still due to the employee. If the required number of days of advance termination notice is given, regular pay continues for 30 days. The employee has the right of one paid day per week of termination notice to look for other employment. Exact calculation is according to the scale below.

Cesantía is severance pay. Maximum cesantía is 8 months.

Months Worked 0-3 3-6 6-12 More than 1 year
Preaviso (Days) 0 7 15 1 Month
Cesantia (Days) 0 7 14 as follows:
Years Worked
Days Paid

When an employee quits or is fired with cause, preaviso and cesantía do not need to be paid.

When a company is sold and the new owner retains the staff, employee benefits are to be paid by the new owner continuing from the original time of hire of the employees. The benefits are not paid to the employees at this time as the new employer will have the responsibility of paying them in the future.


New minimum wage schedules are published by the government every 6 months on January 1st and July 1st. The complete list is comprehensive and includes most occupational groupings.


There is an automatic hiring trial period of three months during which an employee can be released without the payment of notice and termination pay. After three months full separation settlement applies. The trial period for domestic help is one month.


There are some special provisions governing live-in domestic employees. If an employer has a signed contract with a domestic employee offering less than the minimums prescribed by law, the contract is not valid.

A domestic employee’s workday is 12 hours. Up to 16 hours is permitted but double time must be paid for any additional hours over 12 per day. One paid hour of rest, to coincide with a mealtime, is required. It is required that the employee be enrolled in the Costa Rican CCSS medical and pension system.

The employee has the right to half a day off per week and half a day off on official holidays. If they work these hours they must be paid at double time. 15 days of paid vacation each year is compulsory and payment in lieu of vacation is not permitted. When the December aguinaldo payment is calculated, the wage cost upon which aguinaldo is based must include the value of the food and lodging supplied as well as cash wages.

To terminate a domestic employee, no notice is required if they have worked for less than 30 days. Employment over 30 days requires a 15 day notice of termination. The cash equivalent of the notice period can be paid. For each week of termination notice, half a day of paid time must be given to look for other employment.

A female domestic employee who becomes pregnant is entitled to one month of paid leave before birth and 3 months afterwards. If an employee is dismissed because she is pregnant, it is required that her wages be paid from the day of dismissal until the 8th month of pregnancy for maternity benefits and damages for wrongful dismissal.


Approximations on an annual basis:  
Caja Costarricense de Seguro Social
Fondos de Capitalización & Pensiones
Aguinaldo (Christmas bonus Dec 1st to Nov 30th)
Vacation pay (Click here for details)
Dias Feriados (Long weekends with pay)
Preaviso y Cesantía (Termination pay)
Workman's Compensation insurance
Cost of Benefits

In addition to the above percentages, all employees must pay 9% of their salary for Seguro Social. The other items are paid entirely by the employer.

All information is subject to change without notice and should be independently verified. is wholly owned and operated by MiZona Costa Rica, S.A., a Costa Rican corporation.  All Rights Reserved

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