Employer of Record in Costa Rica: Hire, Manage, and Pay Talent Seamlessly

Agreements in Costa Rica

• Collective bargaining agreements are negotiated between employers and labor unions, which represent workers in a particular industry or sector. These agreements can cover a range of employment-related issues, such as wages, benefits, and working conditions.
• Employers are required to comply with the provisions of collective bargaining agreements that apply to their workforce, regardless of whether they are members of the negotiating union.
• Costa Rican law prohibits discrimination in employment based on gender, age, race, or nationality.

Visa in Costa Rica

• Work permit: A work permit is required for all foreign nationals who wish to work in Costa Rica.
• Business visa: A business visa allows foreign nationals to enter Costa Rica for business-related activities, such as attending meetings or conferences.
• Investor visa: An investor visa is available to foreign nationals who invest in a Costa Rican business.
• Retiree visa: A retiree visa is available to individuals who are over 50 years old and can demonstrate a steady stream of income, such as a pension.

Minimum Wage in Costa Rica

• The generic unskilled workers receive CRC 317,915.58
• The general semi-skilled worker gets CRC 342,027.40
• The minimum monthly wage of the generic skilled worker is CRC 359,544.27
• The general highly skilled employee gets CRC 403,764.18
• Technical worker with diversified education qualification receives CRC 376,776.77
• Technical worker with superior education is entitled to get CRC 464,335.93
• Technical workers with higher education diplomas receive CRC 501,500.15
• Technical worker with university bachelor gets CRC 568,819.86
• Technical worker with graduate qualification receives CRC 682,607.23

Annual Bonus in Costa Rica

• Employers are required by law to pay an annual bonus to their employees, known as the aguinaldo salary.
• The bonus is equivalent to one month's salary and should be paid within the first 20 days of December.
• This annual bonus is generally paid in December, ahead of the Christmas and New Year holidays.

Health Benefits in Costa Rica

• Enrollment in the country's social security system
• Payment of premiums for private health insurance plans
• Access to paid sick leave, which allows employees to take time off from work for medical reasons without losing their pay or job security.

Working Hours and Overtime in Costa Rica

• Work hours: The employees work 5 days a week from Monday to Friday for 8 hours a day and 40 hours a week.
• Break: Employees are entitled to a one-hour break for every six hours worked
• Overtime: If an employee works more than eight hours per day or 48 hours a week, they are entitled to receive overtime pay at a rate of 50% of their normal hourly rate.

Leaves in Costa Rica

Social Security in Costa Rica

Taxes for Employers in Costa Rica

• 30% is the Corporate tax rate
• 9.25% is a contribution toward Health & Maternity
• 5.25% is contributed to the Basic Pension Scheme
• 0.25% is contributed towards Banco Popular Employer Fee
• 5.0% is the contribution toward Family Assignations
• 0.5% is paid in Social Aid: (IMAS)
• 1.5% is the contribution towards INA
• 0.25% is the contribution from Banco Popular Employer
• 3% is contributed towards Labor Capitalization Fund
• 0.5% is contributed to Complementary Pension Fund
• 1% is contributed National Insurance Institute

Probation in Costa Rica

Termination in Costa Rica

• Termination with just cause: If an employee is involved in activities such as theft, violence, sexual harassment, or discrimination
• Termination without just cause: An employer must provide proper notice and pay severance according to the law.
• Mutual agreement
• Resignation

Severance Pay in Costa Rica

• An employee is entitled to receive severance pay upon termination of their employment contract, except in cases where the employee has been terminated with just cause.
• The amount of severance pay varies depending on the duration of service, with the law specifying that an employee is entitled to receive one month's salary for each year of service.
• However, the maximum amount of severance pay that an employee can receive is eight years of salary.

Employees or Contractors in Costa Rica

• There is no clear-cut legal definition of employees and contractors, and the distinction between the two can be subjective. However, there are guidelines established by the labor courts and the Social Security Administration that can help determine the classification of an individual.
• In general, an employee is someone who works under the direction and control of an employer and is provided with all necessary equipment and tools to perform the job. A contractor, on the other hand, is someone who operates independently, without supervision or control from an employer.
• If an employer misclassifies an employee as a contractor, they may be subject to penalties and fines from the labor authorities, including having to pay back taxes and social security contributions for the employee.
• If an employer misclassifies a contractor as an employee, they may be required to provide the contractor with benefits such as paid leave, overtime pay, and social security contributions.