Nov 9, 2025
1. Working Hours and Overtime Pay
In Costa Rica, the standard workday consists of 8 hours per day (or 6 for night shifts), with a maximum of 48 hours per week. Any additional hours must be compensated at 150% of the regular hourly rate. Example: if an employee earns ₡500 per hour, each overtime hour must be paid at ₡750. Every worker is entitled to at least one rest day per week, typically Sunday.
2. Minimum Wage Standards
The national minimum wage varies by occupation and education level.
As of January 2025, the minimum wage for an unskilled worker is ₡367,108, while for a university professional it may reach ₡784,139.
Employers must ensure that all full-time employees earn at least the applicable rate and adjust proportionally for part-time schedules. The MTSS reviews and updates these amounts annually.
3. Christmas Bonus (Aguinaldo)
The aguinaldo or Christmas Bonus must be paid no later than December 20 each year. It is calculated as one-twelfth of the total gross wages earned between December and November. Example: if a person earns ₡600,000 monthly, their aguinaldo will be ₡600,000. If employment ends before year-end, a proportional payment applies.
4. Annual Vacation
After 50 consecutive weeks of work, employees are entitled to 12 paid working days of vacation. Vacation days cannot be exchanged for cash, except at the end of the employment relationship. Vacation pay is calculated based on the employee’s regular salary.
5. Written Employment Contracts
Although verbal agreements are legally valid, all terms are presumed in favor of the employee. To avoid disputes, every employment relationship should be formalized in writing — clearly stating the position, salary, work schedule, and duration.
A well-drafted contract protects both the employer and the employee.
6. Termination and Severance Rights
When employment ends, the company must pay any outstanding salary, unused vacation, and proportional aguinaldo. If dismissal occurs without just cause, the employee is also entitled to notice and severance pay.
Example: an employee with 2½ years of service is entitled to three months of severance pay, in addition to other pending benefits.
7. Social Security and Employer Contributions
All employers must register their staff with the Costa Rican Social Security Fund (CCSS) and make the corresponding contributions.
In 2025, total employer contributions represent approximately 26.8% of the gross salary, including health insurance, pension fund (IVM), INA, IMAS, Banco Popular, INS, and FCL.
For instance, for a monthly salary of ₡500,000, the company pays roughly ₡134,000 in additional charges.
Employees contribute about 10.8%, deducted directly from their wages.
8. Independent Contractors and Service Invoicing
Service contracts are valid only when no subordination exists.
If the individual follows schedules, receives instructions, or depends economically on the company, the relationship is considered employment and must be included in payroll.
The Labour Minister (MTSS) may reclassify such arrangements and demand retroactive payment of labor and social charges.
Using service invoices (boletas) does not exempt employers from legal obligations.
9. Consequences of Labor Non-Compliance
Both the MTSS and CCSS can impose fines, interest, and retroactive payments when irregularities are found.
In labor court proceedings, employers may be ordered to pay all omitted benefits, interest, and legal costs.
The Second Chamber of the Supreme Court has reiterated: “What matters is not the contract’s name, but the true nature of the relationship.”
Disguising employment as professional services can become a costly mistake.
10. Maternity and Sick Leave
Pregnant employees are entitled to four months of maternity leave — one month before and three months after childbirth.
The CCSS covers 50% of the salary, and the employer covers the remaining 50%.
For illness, employers must pay 50% of the first three days, while the CCSS covers 60% from the fourth day onward.
EAS LATAM Recommendation
Costa Rica’s labor regulations are increasingly strict, and compliance oversight continues to intensify. At EAS LATAM, we recommend conducting preventive labor audits at least once a year to review contracts, payrolls, and social security filings.
Proactive compliance not only avoids fines but also strengthens corporate governance and protects your company’s reputation.