What an employee really costs in Costa Rica

In one sentence: you must register with the social security fund within eight business days of starting the activity, and from the first employee the employer contributes 26.83 % on gross pay, on top of the 10.83 % withheld from the employee.

8 business daysTo register, from starting the activity

26.83 %Employer contribution in 2026

10.83 %Withheld from the employee

When you have to register

As soon as one single person works for you. There is no minimum number of employees and no minimum hours: one worker already makes you an employer.

The deadline is the first eight business days after the activity starts — or after acquiring the business, if you bought it as a going concern. Not from when someone reminds you: from when it starts.

And social security is not the only step. It comes with the workplace risk policy from the state insurer, which is also compulsory. Two different institutions, two different procedures.

What an employee actually costs

This is the number that surprises anyone hiring for the first time: the salary is not the cost.

₡500,000Gross salaryWhat was agreed

+ ₡134,150Employer contributions26.83 %

₡634,150What it costs youA month, social security alone

And that is before the insurance policy, the Christmas bonus, the holiday and the severance provision.

On the employee's side, 10.83 % of gross is withheld, so from ₡500,000 they receive around ₡445,850 before any other deduction.

The pension rates went up in 2026. The disability, old age and death scheme moved to 5.58 % employer and 4.33 % employee, in force from 1 January 2026 to 31 December 2028. If you are working from a payroll template of earlier years, the percentages have changed.

The full budget for a hire

Adding the annual items to the monthly ones is what tells you what a position really costs. Over a year, on top of twelve gross salaries:

Item	Roughly
Employer social security	26.83 % of gross, every month
Christmas bonus	One extra month a year, 8.33 % accrued monthly
Paid holiday	Two weeks per fifty weeks worked
Severance provision	Around 5.33 % set aside, so a dismissal is not a shock
Workplace risk policy	Depends on the activity and the insurer's rate

What has to be done every month

Obligation	Deadline
File the payroll	First 3 business days of the following month
Pay employer and employee contributions	Before the 15th of the following month
Salary withholdings to the tax authority	Monthly, with its own form

Watch that last one: withholding tax on salaries is an obligation to the tax authority, separate from the social security payroll, and it has its own form. Which one applies to you.

Quick questions

I am registered as an individual, not a company. Can I have employees?

Yes. You register as an employer exactly as a company would. Individual or company.

I hired someone part-time. Does this apply?

It does. The obligation arises from the employment relationship, not from the hours.

What if I pay them “for professional services”?

If the relationship is in fact employment — fixed hours, subordination, exclusivity — calling it something else does not change it. This is one of the things that turns out expensive when it is reviewed backwards, and it is worth asking about before, not after.

Does the Christmas bonus carry social security?

No. It is free of both social security and income tax. How it is calculated.

From Ticuenta

The payroll, its entry and its payment in one step

The month's employer and employee contributions land in the accounts where they belong, without typing them in one by one.

See how it works

About this article. The 2026 percentages, the pension scheme rates and the registration and payroll deadlines are taken from specialist sector publications. This is not employment law advice: confirm the rates in force with the social security fund or your adviser before calculating a payroll.

Verified as of 24 September 2026. Rules change. This is information, not legal or tax advice.

Sources: Costa Rican Social Security Fund Ministry of Labour

What an employee really costs in Costa Rica, and how to register as an employer