Costa Rica has a population of more than 5 million people, with the largest industries including finance, corporate services for foreign companies, pharmaceuticals, and eco-tourism. Costa Rica has a highly educated workforce and Free Trade Zones with investment and tax incentives for foreign corporations.

Payroll and Labor Considerations

• The government determines the minimum wage annually and it varies depending on the occupation. The minimum wage ranges from CRC 316,964 – CRS 680,565 per month
• Overtime is paid at a minimum of 50% higher than the minimum wage. Employees are limited to 12 hours of work per day including overtime
• Severance pay is available for employees who are involuntarily dismissed for reasons other than disciplinary. Severance ranges from 7-20 days salary per year worked. The maximum severance is 8 years
• Anyone living in Costa Rica for more than 183 days in a year are considered residents and must pay tax
• Income earned outside Costa Rica is not taxable
• The tax rate is progressive and ranges from 10-25%

HR and Statutory Requirements

• Employees receive 2 weeks of annual paid leave after 50 weeks of service or 1 day per month for less than a year
• Employees are paid regular wages during their leave
• There is no provision for sick leave. For occupational illness, if an employee has paid into the social security system for 6 months, they are entitled to receive 50% of their salary for the first 3 days of illness
• Female employees receive 4 months of paid maternity leave, including 1 month prior to birth
• There is no requirement for paternity leave
• The legal retirement age is 65 years with pension eligibility if the employee has made at least 300 contributions to social security. If at least 180 contributions have been made they are eligible for partial payments

Holidays in Costa Rica

• January 1 – New Year’s Day
• April 11 – Battle of Rivas
• April 14 – Maundy Thursday
• April 15 – Good Friday
• May 1 – Labor Day / May Day
• July 25 – Annexation of Guanacaste
• August 2 – Our Lady of Los Ángeles
• August 15 – Mother’s Day
• September 19 – Independence Day
• December 5 – Day of Abolition of the Army
• December 25 – Christmas Day

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