🇨🇷 Hiring in Costa Rica

💡 Everything you need to know to hire and manage employees in Costa Rica through Toku. Toku handles payroll processing, tax withholding, social contributions, and statutory compliance. This guide covers what you need to plan costs and manage your team.

At a Glance

Onboarding a New Hire

Plan for 5-7 business days between submitting a new hire and their start date. Toku registers each employee with the Costa Rican social security system (CCSS) before they start; your new hire just needs to provide their cedula (national ID) and sign the employment contract.

Submit your new hire through the Toku platform and we take it from there: local employment agreement, statutory registrations, and payroll setup. See Onboard Contributors as a Client Admin in Toku for the step-by-step process, and the Country Readiness Live Tracker for lead times across all countries.

Employer Costs

On top of gross salary, employers in Costa Rica pay the following contributions (none are capped):

As a rule of thumb, total cost of employment is roughly 126-127% of gross salary. On top of that, budget for the aguinaldo: a mandatory 13th month payment equal to one-twelfth of everything earned between December 1 and November 30, prorated from the start date and paid by December 20.

Employees pay their own social security (approximately 10.83%) plus salary tax of up to 25%, withheld from gross salary, not paid on top. Toku calculates and remits all of the above.

Compensation & Payroll

Toku runs one payroll per month in Costa Rica, and employees receive an itemized payslip each cycle. Salaries are paid in CRC unless otherwise agreed in the contract.

Minimum wages are set annually by occupational category; for 2026, the monthly minimum is roughly CRC 373,092 for unskilled workers and about CRC 487,335 for specialized workers.

The aguinaldo is paid by December 20 each year and is income tax exempt for the employee, making it a well-loved part of the package. New hires receive it prorated for their months worked.

Employment Contracts & Probation

• Toku issues a compliant local employment agreement for every hire, drafted in Spanish for enforceability before Costa Rican labor courts.
• Indefinite-term contracts are the default; fixed-term contracts are only permitted when the nature of the work justifies a defined duration. Part-time employment is allowed with prorated benefits.
• Probation is 3 months under Toku's employment agreement, matching the period during which Costa Rican law allows either party to end the relationship without notice or severance.

Working Hours

For standard day shifts, the limit is 8 hours per day and 48 hours per week, with one mandatory rest day (typically Sunday). Night shifts are limited to 6 hours per day (36 per week) and mixed shifts to 7 hours per day (42 per week).

Overtime is paid at 150% of the regular wage, capped at 4 extra hours per day, and cannot be required on a habitual basis. Work on a mandatory public holiday is paid at 200%. Shifts over six hours include a 30-minute meal break.

Leave Entitlements

Vacation should be taken within 15 weeks of accrual and may be split into at most two periods; unused balances cannot accumulate beyond two years. Social security shares the cost of sick, maternity, paternity, and adoption leave with the employer.

Public Holidays (2026)

Costa Rica observes 12 public holidays, 9 of which are mandatory paid holidays; August 2, August 31, and December 1 are observed but pay is not mandatory. In 2026 every holiday is observed on its exact calendar date.

Benefits: Required vs. Common Extras

Statutory (included in employer costs above): CCSS health insurance (medical care, hospitalization, and prescriptions), state and supplementary pensions, labor risk insurance for workplace accidents, the aguinaldo, and paid annual leave.

Toku offers fully sponsored international health coverage through Remote Health. See Remote Health, Your Global Insurance Plan for coverage details and enrollment.

Common extras in Costa Rica, especially in the tech sector, include private health insurance, life insurance, dental plans, transportation allowances, meal subsidies, and professional development stipends. Toku can advise on the cost impact of any of these.

Ending Employment

Termination without cause is permitted in Costa Rica, but it triggers notice and severance obligations, and final payments are due immediately on exit; delays can lead to claims and penalties. Pregnant employees, employees on maternity leave, and union representatives have special protections. Involve Toku early so we can manage the process compliantly. For the process, see How to Terminate an Employee or Contractor.

Severance (cesantía) is owed on termination without cause: roughly 19.5-22 days' wages per year of service depending on tenure, capped at 8 years, calculated on recent average salary. On top of severance, the final payment includes accrued unused vacation, the proportional aguinaldo, and any outstanding wages. Toku will calculate the full exit cost for you before anything is signed.

Hiring Someone from Overseas?

Foreign nationals need an employer-sponsored work permit (Temporary Residence for Work), which requires showing the role cannot be filled locally or that the candidate has specialized skills; processing takes anywhere from one to eight months. A separate Digital Nomad visa exists only for remote workers paid from abroad. Talk to Toku before extending an offer to a candidate who needs sponsorship.

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Last verified July 2026. This guide is for general information and doesn't constitute legal or tax advice. Your Toku account manager can confirm specifics for your situation.