Economic Overview, Silicon Central America & Medical Devices
Costa Rica is an OECD-member powerhouse combining high-tech manufacturing with sophisticated knowledge services and software engineering.
Key Economic Sectors
- Medical Devices & Life Sciences: Central America's top exporter of advanced medical technology, surgical instruments, and diagnostics.
- IT Services & Software Outsourcing: Cloud engineering, cybersecurity, DevOps, and customer experience in San José and Cartago.
- Shared Services Centers (SSCs): Over 300 multinational corporate shared service hubs providing finance, legal, and HR operations.
Employment Contracts, Labor Code & Probation
Regulated by the Código de Trabajo de Costa Rica.
- Written Contracts: Mandatory in Spanish, detailing duties, work location, schedule, salary in CRC or USD, and benefits.
- Probation Period: Maximum statutory probation is 3 months (90 days). Either party may terminate during probation without severance indemnity (*cesantía*) or prior notice.
Working Hours, Overtime & Night Shift Rules
- Standard Daytime Hours: 48 hours per week (8 hours/day over 6 days, or 9.6 hours/day over 5 days).
- Mixed Shift (Day/Night): 42 hours per week (7 hours/day).
- Night Shift (19:00–05:00): 36 hours per week (6 hours/day).
- Overtime: Compensated at 150% (1.5× base wage); 200% (double time) on statutory rest days or public holidays.
Annual Leave, Public Holidays & Maternity Protections
- Annual Paid Vacation: Minimum 12 working days (2 continuous weeks) per completed 50 weeks of continuous service.
- Public Holidays: 12 official public holidays (mandatory pay and non-mandatory pay days).
- Maternity Leave: 4 months (1 month prenatal + 3 months postnatal), paid at 100% (50% funded by CCSS and 50% by employer). Absolute dismissal protection applies.
- Paternity Leave: 8 business days (2 days per week for 4 weeks post-birth).
Social Security (CCSS), INS Risk, Aguinaldo & Income Tax
Mandatory 13th Month (*Aguinaldo*)
Mandatory 13th-month bonus equal to 1/12 of all gross ordinary and extraordinary earnings received between 1 December of the previous year and 30 November of the current year, paid by 20 December (exempt from social security and income tax).
Social Security (CCSS) Contributions
| Institution / Fund | Employer Share | Employee Share | Coverage |
|---|---|---|---|
| CCSS (Health & Maternity - SEM) | 9.25% | 5.50% | Public health and medical care |
| CCSS (Pensions & Disability - IVM) | 5.42% | 4.17% | Old-age retirement pension fund |
| Social Development Funds (FODEFAP, INA, IMAS) | 7.25% | 0.00% | Training, family subsidies & social welfare |
| Worker Protection Act (LPT / Banco Popular) | 4.75% | 1.00% | ROP pension, labor capitalization & Banco Popular |
| Total Statutory Contributions | 26.67% | 10.67% | Plus mandatory INS occupational policy (~1.5%–3.5%) |
Termination, Notice & Severance (*Cesantía*) Rules
Dismissal Without Just Cause (*Despido con Responsabilidad Patronal*)
- Advance Notice (*Preaviso*): 1 week (3–6 months tenure), 15 days (6–12 months tenure), or 1 month (over 1 year tenure).
- Severance Indemnity (*Auxilio de Cesantía*): Scales up to approx 20 days' salary per year of service (capped at 8 years / ~22 days per year).
Why Use an Employer of Record (EOR) in Costa Rica
- Rapid Nearshore Deployment: Onboard bilingual software developers and medtech engineers in days.
- CCSS & INS Risk Compliance: Automated management of 26.67% CCSS employer contributions, INS policies, and Aguinaldo.
- Eliminate Entity Setup Costs: Avoid 4–8 week legal incorporation, resident legal agent requirements, and local corporate tax filings.
Hiring in Costa Rica? Key Resources
Whether you are evaluating entity setup vs. using an Employer of Record, or looking for the best international payroll solution, our guides give you transparent benchmarks: