Costa Rica HR and payroll glossary

Impuesto al salario Salary tax

Impuesto único sobre las rentas del trabajo dependiente

The income tax on employment income, withheld monthly by the employer on gross pay with no personal allowance. In 2026 pay up to ₡918,000 a month is exempt, then 10%, 15% and 20%, and 25% above ₡4,727,000 a month. For an employee with only salary income it is final. Source

Asignaciones Familiares, IMAS, INA Family allowances fund, Joint Social Aid Institute, National Training Institute

FODESAF, Instituto Mixto de Ayuda Social, Instituto Nacional de Aprendizaje

Employer-only levies collected by the CCSS for other public bodies: 5.00% for the family allowances fund (FODESAF), 0.50% for IMAS and 1.50% for INA. With the Banco Popular employer quota of 0.25% they total 7.25% of gross pay. Source

Banco Popular Banco Popular y de Desarrollo Comunal worker contribution

Aporte al Banco Popular y de Desarrollo Comunal

A contribution to the workers' bank, collected by the CCSS with payroll: 1% of gross pay from the employee, which builds savings the worker can withdraw, and 0.25% from the employer (plus a further 0.25% under the Worker Protection Law). Source

IVM Disability, old-age and death insurance (public pension)

Seguro de Invalidez, Vejez y Muerte

The CCSS public pension. Its rate is rising in stages: from 1 January 2026 the employee pays 4.33% and the employer 5.58% of gross pay, with the State adding 1.75%. Source

LPT (FCL, ROP) Worker Protection Law contributions: Labour Capitalisation Fund and Mandatory Complementary Pension

Ley de Protección al Trabajador (Fondo de Capitalización Laboral, Régimen Obligatorio de Pensiones Complementarias)

Employer-only contributions totalling 4.75% of gross pay: 2% to the worker's mandatory complementary pension account (ROP), 1.5% to the Labour Capitalisation Fund (FCL, which the worker can draw on leaving), 1% to the INS and 0.25% to the Banco Popular. Source

Riesgos del trabajo Occupational risk insurance

Seguro de Riesgos del Trabajo

Compulsory work-accident insurance that the employer must buy from the state insurer INS. The premium depends on the activity and is paid entirely by the employer, separately from the CCSS charge. Source

SEM Health and maternity insurance

Seguro de Enfermedad y Maternidad

The CCSS health insurance branch, which gives access to the public health system and pays sickness and maternity benefits. In 2026 the employee pays 5.50% and the employer 9.25% of gross pay. Source

Aguinaldo Statutory 13th-month pay

A compulsory extra payment equal to one twelfth of everything earned from December to November, paid in the first 20 days of December. It is exempt from salary tax and CCSS contributions. Source

Feriados de pago obligatorio Holidays of compulsory payment

Feriados de pago obligatorio / no obligatorio

Costa Rica has 12 public holidays in 2026. Nine are paid whether or not they are worked, and work on them is paid double; the other three (2 August, 31 August and 1 December) are paid only if worked. Source

Vacaciones Paid annual leave

Vacaciones anuales remuneradas

At least two weeks of paid vacation for every 50 weeks of continuous service, proportional for shorter service and paid out on termination. Many employers add days with seniority. Source

Cesantía Severance pay

Auxilio de cesantía

Severance due on dismissal without just cause: 7 days' pay after 3–6 months, 14 days after 6–12 months, then a sliding scale of about 19.5 to 22 days' pay per year of service, capped at 8 years and based on the average of the last six months' pay. It is not due on resignation or dismissal for just cause. Source

Despido con responsabilidad patronal Dismissal with employer liability

A dismissal without just cause, which the employer may make at any time by paying notice, cesantía and accrued vacation and aguinaldo. Dismissal for one of the just causes in Article 81 of the Labour Code avoids notice and cesantía. Pregnant and breastfeeding workers and union officials need Ministry of Labour authorisation first. Source

Período de prueba Trial period

The first three months of employment, during which either party may end the contract without notice or cesantía. Source

Preaviso Notice period

Notice either party must give to end an indefinite contract without just cause: one week after 3 months' service, 15 days after 6 months and one month after a year. It may be paid in lieu. Source

CCSS Costa Rican Social Security Fund

Caja Costarricense de Seguro Social

The social security agency, known as "la Caja". Employers register with it and pay one monthly charge that covers health and pensions plus levies for other institutions: 26.83% of gross pay from the employer and 10.83% from the employee in 2026, with no ceiling. Source

Hacienda Ministry of Finance (tax administration)

Ministerio de Hacienda

The finance ministry, whose tax administration publishes the salary tax brackets each year and receives the salary tax employers withhold each month. Source

MTSS Ministry of Labour and Social Security

Ministerio de Trabajo y Seguridad Social

The labour ministry and inspectorate. It enforces the Labour Code, publishes the minimum wage decrees, runs conciliation and must authorise dismissals of protected workers. Source