What do you need to know to hire in Costa Rica?
Every Costa Rican worker gets a 13th-month salary, the aguinaldo, paid into their hands by the first 20 days of December. Maternity leave runs 4 months, and employer CCSS social security starts at 14.17% before the parafiscal funds stack on top. Each guide below takes one layer.
· Costa Rica guide
How does Teamed handle Costa Rican hiring for you?
Teamed becomes your legal employer of record in Costa Rica for from $599 per employee per month, with zero FX mark-up in any currency.
Payroll, contracts, and the full Costa Rican employment law stack run on one platform.
Real HR and legal experts manage every Costa Rican hire, from the first offer letter to the final settlement. An actual person, not a chatbot or a pooled queue, handles your team alongside EOR, contractor onboarding, and entity payroll on one platform. There is no setup fee and no exit fee. Employer cost passes through at cost, itemised on every invoice, including CCSS, the parafiscal funds, and the December aguinaldo.
A Costa Rican contractor who converts to employment keeps their record, and that same employee can graduate to your own Costa Rican entity without re-onboarding. Run the Crossover Calculator to see the month the model flips. EOR is the right model for a first Costa Rican hire, until it isn't.
- The aguinaldo is one extra month's pay, due in the first 20 days of December. It is one twelfth of everything earned from December to November, and there is no statutory 14th month. Many EOR guides written for US buyers leave it out of the annual cost. The cost breakdown guide builds it into the year.
- Costa Rica has no single national minimum wage. The MTSS sets a separate rate for each occupation by decree every year. The 2026 unskilled rate is CRC 373,092.30/month and the skilled rate is CRC 419,755.80/month. Most guides quote one number, which is wrong for the role you are hiring.
- Employer CCSS at 14.17% is only the start of the employer's bill. Separate parafiscal funds for training, housing and the labour capital fund sit on top, lifting the real employer load well above the CCSS line alone. The cost breakdown guide adds up the full number.
Every employee in Costa Rica earns a 13th-month salary called the aguinaldo. You pay it in the first 20 days of December. It equals one twelfth of the year's total pay.
Employer CCSS social security starts at 14.17% and the employee pays 8.34%. Costa Rica sets the minimum wage by occupation, not one national rate. The 2026 unskilled rate is CRC 373,092.30/month.
Teamed runs Costa Rican payroll, contracts, and compliance through its vetted partner-entity network in the country.
This page is the map. Each guide below is the detail.
Zero FX. No setup fee. 48-hour onboarding. The price your finance team can forecast against without an asterisk.
How much does it cost to hire an employee in Costa Rica in 2026?
Budget for salary plus employer CCSS at 14.17%, the parafiscal funds on top, and one extra month of pay each December.
The aguinaldo alone adds the equivalent of one twelfth of annual pay. Plan for it from the first payslip.
Employer CCSS runs at 14.17% of gross pay. That covers health insurance and the pension fund. Separate parafiscal funds for training, housing and the labour capital fund sit on top of the CCSS line, so the real employer load is higher than CCSS alone. The exact total depends on the funds that apply to your sector.
On top of monthly cost, every employee earns the aguinaldo, a 13th-month salary paid in the first 20 days of December. There is no statutory 14th month. Teamed's Costa Rica fee sits inside the total cost envelope, not outside it, at one flat number with zero FX in any currency pairing. No setup fee. No exit fee. Salaries, taxes, and the aguinaldo passed through at cost on every invoice.
The full breakdown, with worked examples at current rates, is in the cost guide.
Do you need a Costa Rican entity to hire employees in Costa Rica?
No. An Employer of Record runs Costa Rican payroll and contracts from day one.
Your own entity becomes cheaper than EOR once your local headcount grows, depending on salary and local accounting cost.
Registering a Costa Rican company means incorporation before a notary, a tax number with the Dirección General de Tributación, and registration as an employer with the Caja Costarricense de Seguro Social for CCSS. Setup and ongoing monthly filings take time and local support. An Employer of Record is faster and cheaper at low headcount. Teamed runs Costa Rican payroll, contracts, and compliance from day one.
The crossover point depends on local salary levels and your accounting costs. The EOR vs entity guide runs those numbers for your headcount.
Most EOR providers will not tell you when you have crossed it. We do, and we help you move. You progress from contractor to EOR to your own Costa Rican entity on one platform under Teamed's Graduation Model, with tenure preserved.
What changed in Costa Rican employment law recently?
Salary income tax bands were reset for 2026 by Decreto 45333-H. Monthly pay up to CRC 918,000 stays exempt.
The mandatory paid public holiday list was last reset in 2021 and now stands at 9 days.
The 2026 salary tax bands took effect on 1 January 2026 under Decreto Ejecutivo Nº45333-H. Pay up to CRC 918,000 a month is exempt, the next band is taxed at 10%, and the top band reaches 25% over CRC 4,727,000 a month. The monthly tax credit is CRC 1,710/month per child and CRC 2,590/month for a spouse.
A 2021 reform of Labour Code article 148 reset the holiday list. There are now 9 days of mandatory paid public holidays, plus 3 days more where pay is not required. A separate CCSS reform in November 2024 changed how the sick-pay subsidy is worked out, now based on the average of the last twelve reported salaries. The hiring and tax guides cover each current rule.
What benefits must you provide Costa Rican employees in 2026?
The floor is 2 weeks of paid annual leave after 50 weeks of service and 4 months of maternity leave at full pay.
Every employee also earns the aguinaldo, a full extra month of pay each December.
Paid annual leave is 2 weeks taken together after 50 weeks of continuous service, under Labour Code article 153. Before that point it accrues at one day per month worked. There are 9 days of mandatory paid public holidays in the year.
Maternity leave is 4 months, one month before the birth and three after, paid in full with the cost shared between the employer and the CCSS. Paid paternity leave also exists, though the current duration is still being confirmed against the Labour Code. Sick pay is shared too. With three to six months of service the employer pays half salary for one month, and that employer share rises with longer service while the CCSS subsidy runs alongside it. The benefits guide covers each entitlement in full.
Read the full Costa Rica benefits guide
What are payroll taxes in Costa Rica in 2026?
Employers pay CCSS at 14.17% of gross pay, plus the parafiscal funds.
Employees pay CCSS at 8.34% and salary income tax on a rising scale up to 25%.
Employer CCSS is 14.17% of gross pay, covering health insurance and the pension fund. Separate parafiscal funds add to the employer's bill on top of that line. Employees have CCSS of 8.34% withheld from each payslip.
Salary income tax is progressive and was reset for 2026 by Decreto 45333-H. Monthly pay up to CRC 918,000 is exempt. The next band is 10%, then 15%, then 20%, and the top band is 25% over CRC 4,727,000 a month. A monthly credit of CRC 1,710/month per child and CRC 2,590/month for a spouse reduces the tax due. Teamed handles every deduction and remittance. The tax and payroll guide sets out each band and threshold.
How do you terminate an employee in Costa Rica?
Notice rises with service. It is 15 days between six months and a year, and 1 month after a year.
Severance, the auxilio de cesantía, is owed when you dismiss without just cause.
Notice, the preaviso, follows length of service. From three to six months it is 1 week. From six months to a year it is 15 days. After one year it is 1 month, under Labour Code article 28. The Labour Code has no general probation clause, so a three-month probation is read from these notice thresholds rather than written into the law.
Dismissal without just cause owes severance, the auxilio de cesantía. It is 7 days of salary from three to six months of service, 14 days from six months to a year, and a rising number of days per year beyond that. The total is capped at the last 8 years of the relationship. If a dismissal for cause is later found unjustified, the employer owes the notice, the severance, and back pay as damages, under article 82. The termination guide runs the full process.
What should you know before hiring in Costa Rica?
Two things catch US buyers out. The first is that the aguinaldo is a hard December cost, not a discretionary bonus.
The second is that there is no single minimum wage. Each occupation has its own rate set by decree.
The aguinaldo is owed to everyone, every year. It is one twelfth of the total earned from December to November, paid in the first 20 days of December. Treat it as a known annual cost from the first hire, not a year-end surprise.
There is no national minimum wage to quote. The MTSS sets a rate for each occupation by decree every year. The 2026 unskilled rate is CRC 373,092.30/month and the skilled rate is CRC 419,755.80/month. Pick the wrong band and the offer is wrong before the contract is signed. The hiring guide maps each rate to the role.
Frequently asked questions
How much does it cost to hire an employee in Costa Rica?
Plan for salary plus employer CCSS at 14.17%, the parafiscal funds for training, housing and the labour capital fund on top, and one extra month of pay each December as the aguinaldo. Teamed's Costa Rica fee is one flat number per employee per month, with zero FX mark-up in any currency pairing. The cost breakdown guide has worked examples.
Can a US company hire in Costa Rica without an entity?
Yes. An Employer of Record like Teamed runs Costa Rican payroll, contracts, and compliance through its vetted partner-entity network. You direct the work. Teamed becomes the legal employer of record. Setup takes 48 hours once terms are confirmed. Registering your own company means incorporation, a tax number, and employer registration with the CCSS, plus ongoing monthly filings.
What is the aguinaldo in Costa Rica?
The aguinaldo is a mandatory 13th-month salary. It equals one twelfth of everything an employee earned from December to November, and it is paid in the first 20 days of December under Ley Nº2412. There is no statutory 14th month. Every employee is entitled to it regardless of role or seniority.
What is the statutory notice period in Costa Rica?
Notice, the preaviso, rises with service under Labour Code article 28. It is 1 week from three to six months of service, 15 days from six months to a year, and 1 month after one year. Pay in place of notice is allowed.
What severance is owed on dismissal in Costa Rica?
Severance, the auxilio de cesantía, is owed when you dismiss without just cause. It is 7 days of salary from three to six months of service, 14 days from six months to a year, and a rising number of days per year after that. The total is capped at the last 8 years of the relationship.
What is the minimum annual leave for a Costa Rican employee?
Paid annual leave is 2 weeks taken together after 50 weeks of continuous service, under Labour Code article 153. Before that point it builds up at one day for each month worked. Costa Rica also has 9 days of mandatory paid public holidays each year.
Costa Rica runs a clear framework under the Código de Trabajo, but the gap between the letter of the law and payroll practice catches new employers. A mandatory 13th-month aguinaldo every December, social security that runs past the headline CCSS rate once the parafiscal funds are added, and a minimum wage set occupation by occupation: none of these are hard once you know them. They are consistently costly when you do not.
Costa Rica owes every worker a 13th-month aguinaldo each December, employer CCSS from 14.17 percent before the parafiscal funds, and a minimum wage set occupation by occupation.
Most of the cost surprises come from not reading those rules before the first hire.
Read the right Costa Rica guide before that hire, not after the first payroll.
