Hire in Costa Rica

EOR in Costa Rica

If a lack of speed or local expertise are among your top concerns when expanding to or employing workers in Costa Rica, an employer of record may be the best option for achieving your global growth objectives.

An employer of record, sometimes known as an international PEO, enables you to quickly hire and onboard workers in Costa Rica ―often in as little as two weeks―without having to take on the cost and risk of establishing a local entity.

Learn about the hiring, employment, payroll and benefits requirements for workers in Costa Rica and how our employer of record service, EOR, and local HR experts can help you manage your international employment needs.

Hiring in Costa Rica

Top companies from around the world have seen the benefits of hiring in Costa Rica, but its labor regulations can be intricate. Employment relationships in Costa Rica are governed by its constitution, the labor code (Código de Trabajo), international treaties, and judicial precedents, as well as collective and individual contracts. The Código de Trabajo serves as the primary legal framework and outlines workers’ rights, employer obligations, and the procedures for labor disputes.

Additionally, Costa Rican law places strict regulations on the use of temporary and subcontracted workers. Employers must provide written employment contracts and register workers with the social security system. Any outsourcing arrangement must still comply with all applicable labor protections and benefits.

Because of the complexity of Costa Rica’s labor and tax laws, compliant employment contracts are a critical business requirement. With Safeguard Global as your partner, you can hire employees in Costa Rica with confidence, knowing that every contract meets legal standards. We also provide guidance on cultural expectations and hiring best practices, while helping you stay current with regulatory changes.

Employment contracts in Costa Rica

In Costa Rica, employment contracts can be fixed-term or indefinite, depending on the nature of the job and the agreement between the employer and employee. Indefinite employment contracts must include benefits such as enrollment in the Costa Rican Social Security Fund (CCSS), paid vacation, the 13th-month bonus (Aguinaldo), and severance pay. Fixed-term employees are entitled to the same benefits as indefinite employees, with contracts typically not exceeding one year unless justified by specific circumstances.

Costa Rica also has apprenticeship contracts, mainly for training, which are governed by the labor code. Employers engaging apprentices are required to:

• Provide structured training aligned with approved curricula
• Pay apprentices a stipend in line with government regulations
• Ensure apprentices work in a safe environment
• Adhere to regular working hours as defined by labor standards

Probationary period

In Costa Rica, probation periods are indirectly addressed in local law. They are generally set at three months in the private sector, with similar durations applicable in government employment, as specified in employment contracts.

Termination and notice periods

In Costa Rica, labor laws generally require written notice for termination, with periods varying based on the employee's length of service. No notice is required for less than three months of service, and one week's notice is required for three to six months of service. Two weeks' notice is needed for six to 12 months of service, and one month's notice is required for more than a year of service. In most cases, terminated employees are entitled to a warning and a fair hearing. Just cause for a dismissal includes the following:

• Dishonesty
• Insubordination
• Negligence
• Repeated tardiness
• Violence
• Breach of trust
• Other serious offenses

Employees terminated without just cause are entitled to severance pay, calculated based on their length of service and salary. As your Employer of Record (EOR) in Costa Rica, we can assist you in managing employee terminations by providing legal guidance and a personalized process to ensure compliance with labor laws and minimize legal risks.

Working hours and overtime

The standard workweek in Costa Rica is 48 hours, typically structured as eight hours per day, Monday through Saturday. Day shifts cannot exceed eight hours per day or 48 hours per week. For night shifts, the limit is six hours per day and 36 hours per week. Mixed shifts that combine day and night hours must not exceed seven hours per day.

Any time worked beyond these legal limits is considered overtime. Overtime must be compensated at 150% of the regular hourly wage. For work on Sundays or public holidays, employees are entitled to double pay, unless Sunday is their usual day of work.

Pay and benefits

When negotiating terms of an employment contract with a candidate in Costa Rica, here are some of the statutory benefits and paid leave requirements to keep in mind, as well as how an employer of record can support your company’s benefits strategy.

Minimum wages and salary benchmarks

Minimum wage rates in Costa Rica are determined by the National Wage Council and vary by occupation. As of January 1, 2025, a general adjustment of 2.37% was applied, bringing the minimum monthly wage to nearly 700 CRC, depending on the specific job category. ​

The minimum wage structure is comprehensive, covering various sectors and ensuring fair compensation across different job roles.​

The overall annual average salary in Costa Rica is approximately 9,720 CRC, with monthly earnings varying significantly by position, experience, and region. The median monthly salary is estimated to be around 810 CRC.​

By gender, a wage gap exists with average annual salaries for men typically exceeding those for women. Efforts to reduce this disparity continue through targeted government initiatives and policy reforms.​

Looking at salary by location in Costa Rica

• San José: Known for offering salaries above the national average, particularly in sectors such as finance, technology, and healthcare
• Alajuela: Offers competitive compensation in industries like manufacturing, agriculture, and information technology, with wages generally reflecting the local cost of living
• Limón: While salaries in Limón are competitive, certain sectors may offer compensation slightly below the national average, influenced by regional economic factors

As your employment partner in Costa Rica, Safeguard Global can provide you with the latest resources and insights on average employee compensation across various roles and regions, ensuring that you make competitive and compliant employment offers.

Payroll frequency

In Costa Rica, employees are typically paid on a monthly basis, with salaries disbursed no later than the last working day of the month, as specified in the employment contract or company policy. The Costa Rican labor code mandates that remuneration must be paid at least once a month, ensuring regular income for employees. ​

In addition to regular monthly wages, employees receive additional compensation such as the mandatory 13th-month salary, known as ""Aguinaldo."" This payment is typically disbursed between December 1st and 20th, as stipulated in the labor code, and is calculated based on the employee's annual earnings. Employers are required to adhere to the agreed-upon schedules for these payments to maintain compliance with labor regulations.

Bonuses and additional payments

In Costa Rica, labor law mandates an annual Christmas bonus, known as "Aguinaldo," equivalent to one-twelfth of an employee's total earnings from December 1 of the previous year to November 30 of the current year. This bonus must be paid by December 20, and failure to comply can result in substantial penalties. The Aguinaldo is a legal obligation for all employers, and the calculation method must be applied uniformly to all eligible employees.

Employee benefits and paid leave in Costa Rica

When negotiating terms of an employment contract with a candidate in Costa Rica, here are some of the statutory benefits and paid leave requirements to keep in mind, as well as how an employer of record can support your company’s benefits strategy.

Employee benefits

Employers are legally required to provide a number of benefits under Costa Rican labor law.

• Caja Costarricense de Seguro Social (CCSS): Mandatory healthcare and pension contributions provide coverage for illness, maternity, disability, and retirement. Employers contribute approximately 26.33% of gross salary, while employees contribute around 10.34%.

• National Insurance Institute (INS): Employers must also insure workers for occupational risks through the INS (Instituto Nacional de Seguros).

• Paid annual leave: Employees are entitled to two weeks of paid vacation after 50 weeks of continuous work.

• Sick leave: This is paid in part by the employer and by the CCSS after the third day of illness.

• Maternity leave: Employees are given four months of paid leave (one month before and three months after birth), with payment split between the employer and CCSS.

Private healthcare and supplementary insurance are common among professional employees. As your employer of record in Costa Rica, we can advise on cost-effective group insurance and wellness programs tailored to your workforce.

Tax and social contributions

Income tax and employee deductions

In Costa Rica, withholding tax is known as Retención en la Fuente and is deducted by employers before paying salaries to employees. Employers must deduct income tax from employee salaries based on applicable income tax brackets and submit it to the Dirección General de Tributación.

Employer payroll contributions

Costa Rica's social security system requires employer contributions that are dependent on the total number of employees, and these contributions cover pensions, medical care, disability insurance, and gratuity payments. In addition, workers' compensation is financed by contributions from state governments, employers, and employees.

Business tax and compliance

Employers in Costa Rica must adhere to various taxation and regulatory compliance requirements to operate legally and avoid penalties.​

• Corporate tax: Companies are taxed at a standard rate of 30%. Small companies with gross income not exceeding 119,629,000 CRC benefit from reduced rates — 5% on the first 5,642,000 CRC and 10% on the excess up to 8,465,000 CRC. ​
• Value added tax (VAT): VAT applies to all businesses regardless of turnover. Employers must register, file monthly returns, and pay VAT on applicable goods and services. ​
• Income tax withholding: Employers must deduct income tax from employee salaries, vendor payments, and contractor fees. Withheld taxes must be deposited by the 15th of the following month, and periodic returns must be filed. ​
• Income tax returns (ITR): ITRs are filed annually based on company profits. Companies must also file annual financial statements with the Costa Rican tax authorities.

Work visas and immigration

Programs for foreign workers

In Costa Rica, hiring foreigners without valid work permits can result in fines, legal action, or deportation of the employee. The Costa Rican government enforces strict regulations to ensure employment opportunities are first available to Costa Rican citizens unless specialized skills are required. Therefore, Costa Rica has structured skilled migration programs for foreigners, with provisions for highly skilled professionals in sectors like tourism, education, healthcare, and information technology. Certain workers may apply for a Costa Rican work permit.

• Temporary Residence Permit with Work Authorization: For foreign nationals with a job offer from a Costa Rican employer
• Self-Employed Worker Permit: For individuals intending to establish a business or work independently in Costa Rica
• Special Category Permit: For specific professions or roles deemed essential by the government

Foreigners may also apply for a Short-Term Business Visa, which is issued for attending meetings, conferences, or exploring business opportunities in Costa Rica. It does not permit full-time employment in a Costa Rican company.​

Sponsorship and employer responsibilities

Hiring a foreign national in Costa Rica requires compliance with both immigration and labor regulations. Employers must initiate the process by requesting a work authorization through the Ministry of Labor and sponsoring the employee’s residency through the immigration authority.

Eligibility criteria

• The applicant must possess specialized skills or qualifications not easily found in the local labor market.

• The employer must demonstrate that the role was advertised locally and no suitable Costa Rican candidates were found.

• The job offer must include a formal contract, salary, and job description that complies with Costa Rican labor law.

Required documentation

• Valid passport with at least six months' validity

• Notarized employment contract

• Proof of employer registration with CCSS and tax authorities

• Labor certification (Constancia de Inscripción Laboral) issued by the Ministry of Labor

• Completed immigration forms and certified translations (if applicable)

Post-arrival requirements

• Foreign employees must register with the Dirección General de Migración and obtain a residency card (DIMEX).

• Employees must also register with the CCSS and enroll in the social security system.

• Any change in role, address, or employer must be updated with immigration authorities.

Processing times and costs

Once a person has applied for a Costa Rican employment visa, the processing time varies, but it typically ranges from three to eight months. ​

• The fee for an employment visa is $50 USD.​

Additional fees, such as document legalization and translation services, may apply. Check with the specific Costa Rican consulate or embassy for the most accurate and up-to-date fee structure.

Leave and public holidays

Annual leave and paid time off

Employees in Costa Rica are entitled to paid vacation leave after completing 50 consecutive weeks of employment. The statutory entitlement is two weeks (or 12 working days), which must be granted within the following 50 weeks. This leave is fully paid and must be taken at a time agreed upon between employer and employee.

Additional leave may be offered as part of an employment contract, though it is not required by law. Some employers provide more generous paid leave to attract and retain skilled professionals.

Unused vacation cannot be carried over indefinitely and must be honored within the legal timeframe. Payment in lieu of unused vacation is permitted only upon termination of employment.

Public holidays

Employees are entitled to several paid public holidays.

• Jan. 1: New Year's Day

• Apr. 11: Juan Santamaria Day

• Maundy Thursday

• Good Friday

• May 1: Labor Day

• Jul. 25: Anexion del Partido de Nicoya

• Aug. 15: Mother's Day and Assumption

• Aug. 31: Day of the Black Person and Afro-Costa Rican Culture

• Sep. 15: Independence Day

• Dec. 1: Abolition Day

• Dec. 25: Christmas Day

In addition, Aug. 2, Day of Our Lady of the Angels, and Oct. 12, Cultural Day, are holidays for which payment is not mandatory. If a public holiday falls on a weekday and the employee normally works that day, they are entitled to a paid day off. When employees are required to work on a public holiday, they must be paid double their regular daily wage, unless the day falls on a non-working day in their regular schedule.

Some holidays are “movable” and may be transferred to a nearby Monday to encourage long weekends. Employers are expected to respect national observances in accordance with the labor code.

Sick leave

Personal and sick leave are governed by the Costa Rican labor code. Employees are entitled to paid sick leave, with the first three days compensated at 50% by the employer and 50% by the Costa Rican Social Security Fund (CCSS). From the fourth day onward, the CCSS covers 60% of the employee's salary, provided a medical certificate is submitted.

Parental leave

Employers must provide four months of paid leave to female employees, consisting of one month before and three months after childbirth, with the salary paid equally by the employer and the Costa Rican Social Security Fund (CCSS). Pregnant employees who have worked for an employer and provided a medical certificate from an authorized healthcare provider are eligible for benefits, with written notice submitted prior to the expected delivery date.

Hiring and talent management

Commonly recruited roles

Global companies operating in Costa Rica frequently hire for roles that support shared services, technical operations, and client-facing positions. There are multiple roles that are commonly recruited for in Costa Rica.

• Customer support representatives: Manage inquiries and support services in English and Spanish

• IT specialists and developers: Support infrastructure, systems development, and cybersecurity

• Finance and accounting professionals: Handle reporting, reconciliation, and tax compliance

• HR and administrative coordinators: Oversee payroll, onboarding, and employee documentation

• Logistics and supply chain analysts: Optimize import/export processes and vendor coordination

• Marketing and digital content specialists: Manage brand presence, SEO, and campaign execution

• Bilingual virtual assistants: Support executive and operational tasks remotely

As your Employer of Record in Costa Rica, we can help you access qualified, bilingual talent and onboard professionals across industries quickly and compliantly.

Languages

Costa Rica is a bilingual workplace environment, with Spanish and English used across industries. While Spanish dominates corporate settings, English is widely spoken in government and business sectors, particularly in tourism and international services. Workplaces often operate in a bilingual manner, depending on the industry and region.​

In corporate sectors like IT and finance, English is the primary language for communication, documentation, and client interactions, especially in multinational companies. Meetings, presentations, and official emails are generally conducted in English, though employees may use Spanish informally.​

In government offices and public sector organizations, Spanish is commonly used for internal communication and documentation. Costa Rica recognizes Spanish as the official language, with efforts to preserve indigenous languages such as Bribri and Cabécar. ​

The manufacturing and retail sectors rely on Spanish for daily operations, especially in labor-intensive industries. Factories, warehouses, and construction sites primarily use Spanish, while management-level communication may be in English.​

In customer service, language use depends on clientele. Spanish is common for domestic support, while many companies also hire English speakers to cater to international customers.

Education level

The Costa Rican workforce includes individuals with diverse education levels, ranging from basic schooling to advanced degrees. Education levels vary by industry, job role, and region, with skilled and unskilled workers contributing to different sectors of the economy.

• Unskilled and semi-skilled jobs (agriculture, construction, retail, informal sector): Primary (grade 6) or lower secondary (grade 9) education
• Skilled trade and technical jobs (manufacturing, automotive, electrical, construction): Vocational training (INA), polytechnic diploma, upper secondary (grade 12)
• Entry-level corporate and service sector jobs (clerical, sales, customer service): Bachelor's degree (BA, BCom, BSc) or upper secondary (grade 12)
• IT and engineering jobs (software development, technical support, research and development): Bachelor's degree (BEng, BSc in computer science, IT, or electronics)
• Finance and business jobs (accounting, banking, consulting, corporate roles): Bachelor's or master's degree (BCom, MBA, CPA, CFA)
• Healthcare and life sciences jobs (medical, pharmaceuticals, biotechnology): Bachelor's or master's degree (MD, BPharm, MSc, MTech in biotechnology)
• Academia and research jobs (education, scientific research, government): Master's or PhD (MA, MSc, MPhil, PhD)

Recruitment trends and hiring considerations

The Costa Rican job market in 2025 reflects strong demand in digital transformation, healthcare, renewable energy, and skilled trades. Technology, tourism, and business services remain core drivers of hiring, while hybrid and remote work models continue to shape recruitment strategies.​

Labor shortages in IT, nursing, and construction are influencing training initiatives and government-backed employment programs. Employers increasingly seek candidates with digital competencies, multilingual abilities, and role-specific certifications.​

Cultural considerations include a preference for formal job applications, structured onboarding processes, and clear contractual agreements. As your local partner, we can help you navigate Costa Rican hiring practices, salary expectations, and legal requirements — ensuring a compliant and efficient recruitment process in Costa Rica.

Workplace culture and business practices

Workplace norms and professional etiquette

Costa Rican workplace culture values respect, professionalism, and collaboration. While many organizations have hierarchical structures, managers are generally approachable, and teamwork is encouraged across departments.

Hierarchy and authority:

Decision-making often resides with senior leadership, but input from employees is welcome in modern organizations. Formal titles and respectful greetings are commonly used in business settings.

Email and phone etiquette:

Business communication is typically polite and formal. Emails begin with courteous salutations and conclude with phrases like “Atentamente” or “Saludos cordiales.” Phone conversations often include brief small talk before moving to business matters.

Meeting etiquette:

Punctuality is expected, though meetings may begin a few minutes late. Initial greetings may include a handshake, and maintaining a respectful tone throughout is important.

Professional dress code:

In corporate environments, business attire such as dress shirts, slacks, or conservative dresses is standard. In tech companies or creative sectors, business casual is increasingly accepted.

Typical working hours and business customs

The standard workweek in Costa Rica consists of 48 hours, typically spread over six days, with eight hours per day. For daytime shifts, work is allowed between 5:00 a.m. and 7:00 p.m., while night shifts are limited to six hours per day. Employees are entitled to at least one full day of rest per week, usually Sunday.

Remote and hybrid work models have expanded since the pandemic, particularly in the BPO, tech, and finance sectors. Employers must ensure that remote employees comply with working hour limits, receive proper breaks, and are covered by social security.

Flexible work arrangements must be formalized in writing and aligned with Costa Rican labor law.

Key HR challenges and compliance risks

Costa Rica's labor regulations, rooted in the Labor Code of 1943, present a comprehensive framework that governs employment relationships. Key provisions address minimum wage standards, working hours, and employee benefits. Employers face challenges in navigating these regulations, with noncompliance leading to significant penalties and potential legal action. The intricate nature of tax laws and compensation structures necessitates vigilant HR practices, especially for organizations transitioning from an EOR arrangement to a locally registered entity.

Professional employer organization (PEO) vs. employer of record (EOR) in Costa Rica

What is a PEO in Costa Rica?

A professional employer organization (PEO) in Costa Rica is a third-party service provider that manages human resources, payroll, compliance, and employee benefits for their workforce.

Challenges with a PEO model

While a PEO can simplify HR operations, companies using this model in Costa Rica may still be required to manage local compliance directly. The client remains the legal employer in most cases and may need to register a local entity, handle tax filings, and maintain labor law records.

Costa Rican labor regulations place strict obligations on employers regarding contracts, severance, and social security registration. Under a PEO model, failure to meet these obligations could expose the client to legal and financial risks.

In contrast, an Employer of Record (EOR) assumes full legal responsibility for employment, allowing foreign companies to operate without forming a local entity. The EOR manages payroll, compliance, benefits, and regulatory reporting on your behalf.

EOR as an alternative to PEO

If you're interested in expanding into Costa Rica and dealing with complex labor laws or social security obligations are among your top concerns, an employer of record (EOR) may be the best option for achieving your global growth objectives.

An employer of record, sometimes known as an international PEO, enables you to quickly hire and onboard workers in Costa Rica — often in as little as two weeks — without having to take on the cost and risk of establishing a local entity.

Safeguard Global has more than 17 years' experience as an EOR in countries around the globe. As an EOR in Costa Rica, we're experts in local labor regulations, payroll processing, and benefits management, ensuring compliance with all employment requirements.

Entity setup in Costa Rica

Setting up a local entity

While employers of record (EORs) provide a quick entry into Costa Rica, establishing a legal entity is essential for companies planning large-scale operations, direct hiring, and full market control. The decision depends on growth plans, industry regulations, and cost considerations.

Safeguard Global can help you assess your growth plan and objectives and find the solution that best meets your needs. We're the only provider that grows with you.

Entity registration steps and timelines

Establishing a legal entity in Costa Rica requires several steps, each involving specific documentation and regulatory approvals. The process begins with selecting an appropriate business structure, such as a Sociedad Anónima (S.A.) or Sociedad de Responsabilidad Limitada (S.R.L.), and reserving the company name with the National Registry. Applicants must provide identification documents, proof of address, and details of the shareholders and directors. ​

Next, companies must prepare key incorporation documents, including the articles of incorporation, which outline the company's objectives and internal governance structure. These documents are formalized before a notary public and then registered with the Mercantile Registry. ​

After registration, businesses must obtain a tax identification number (Número de Identificación Tributaria, NIT) from the Ministry of Finance and register with the Costa Rican Social Security Fund (Caja Costarricense de Seguro Social, or CCSS). Depending on the nature of the business, companies may also need to obtain additional licenses or permits. ​

The entire incorporation process in Costa Rica typically takes between four to six weeks, depending on the complexity of the business structure and the efficiency of the relevant authorities.​

Comparing EOR vs. entity setup

While EOR is a faster, low-risk option for market entry and small teams, entity setup is better suited for long-term growth and larger workforce expansion.

When EOR might better suit your needs:

• You need to hire employees quickly (one to two weeks).
• You don’t want to set up a legal entity and manage compliance.
• You are testing the Costa Rican market before making a long-term commitment.
• You plan to hire fewer than 50 employees in Costa Rica.
• You need flexibility without significant investment.

When entity setup might better suit your needs:

• You want full business control and plan to operate long term.
• You need to sign contracts, open bank accounts, and own assets in Costa Rica.
• You are hiring 50+ employees (EOR costs become unsustainable).
• You operate in a regulated industry requiring local registration.
• You want to protect your intellectual property under Costa Rican law.

Global workforce solutions

HR & Benefits solutions in Costa Rica

We offer tailored HR and benefits support in Costa Rica, including administration of mandatory benefits such as Caja Costarricense de Seguro Social (CCSS) registration, occupational risk coverage (INS), and paid leave tracking. We also support the setup of supplementary benefits, including private health plans, meal stipends, and wellness programs to meet workforce expectations.

Tax & Accounting solutions

Our team ensures accurate payroll tax filings, employer and employee social security contributions, and reporting in line with Costa Rican labor and tax laws. We also assist with annual declarations and support your compliance with the Dirección General de Tributación (DGT).

Global Payments & Payroll Processing

We support timely and compliant payroll processing for local employees and expatriates. This includes salary payments in colones or foreign currency, management of bonuses, deductions, and benefits, and full compliance with local currency and labor regulations.

Updated: May 2025

Partner with Safeguard Global as your employer of record and PEO in Costa Rica

With over a decade of service, we are the longest-serving employer of record and PEO provider in the international market. Organizations around the world rely on EOR, our employer of record solution, to expand and hire in over 170+ countries around the world, quickly and compliantly.

We’ve seen just about every global employment circumstance imaginable—and with our extensive knowledge of local law and culture, we know what it takes to get employment right in Costa Rica. We provide written contracts in the local language, salaries in the local currency and HR support in your employees’ time zone.

Additionally, as a global payroll provider we support payroll administration—including payments, filings and other calculations— all around the world and can accommodate the payroll outsourcing needs of any size organization.

Whether you’re looking to hire as part of a strategic expansion or to meet specific talent needs, our global solutions advisors can walk you through your international hiring options so you can make the right choice for your organization. Contact us today.

Disclaimer: The information provided on or through this website is for informational purposes only and does not constitute legal advice. Safeguard Global expressly disclaims any liability with respect to warranty or representation concerning the information contained herein, including the lost essence, interpretation, accuracy and/or completeness of the information in transit and language translation.