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Salary withholding tax in Costa Rica: the 2026 bands and credits

Five bands, each applying only to the excess over the one before. Moving up a band never leaves anyone worse off — and the arithmetic is much smaller than people expect.

6 min readTicuenta
The 2026 monthly bands: up to ₡918,000 is not subject; the excess up to ₡1,347,000 pays 10 %; up to ₡2,364,000, 15 %; up to ₡4,727,000, 20 %; and above that, 25 %.

The table, and how it actually applies

Gross monthly salaryRate on the excess
Up to ₡918,000Not subject
On the excess over ₡918,000 up to ₡1,347,00010 %
On the excess over ₡1,347,000 up to ₡2,364,00015 %
On the excess over ₡2,364,000 up to ₡4,727,00020 %
On the excess over ₡4,727,00025 %
“On the excess” is the key phrase. A salary of ₡1,500,000 does not pay 15 % of ₡1,500,000. It pays nothing on the first ₡918,000, 10 % on the next ₡429,000 and 15 % only on the ₡153,000 above ₡1,347,000. Moving up a band never means earning less.
₡0First ₡918,000Not subject
₡42,90010 % of ₡429,000Second band
₡22,95015 % of ₡153,000Third band
A salary of ₡1,500,000: ₡65,850 before credits, not ₡225,000.

The credits for children and spouse

They are subtracted from the tax, not from the salary: ₡1,710 a month per child and ₡2,590 a month for a spouse. An employee with two children and a spouse reduces their withholding by ₡6,010 a month.

They do not apply by themselves: they depend on what the employee declares to the employer. If nobody claims them, nobody applies them.

It is not a company expense

It is a withholding. The amount was already inside the gross salary, which is an expense; the employer separates it, holds it in a payable account and remits it to the tax authority. In the entry it goes to the credit side, against “salary tax withheld, payable”, and it reduces the net the employee receives.

The practical consequence. If that withholding is posted to an expense account, the income statement overstates staff costs and the payable never appears. Which means the following month's remittance has nothing to clear against.

The final settlement case

Untaken holiday paid in a settlement is taxable pay. Its tax is added to the month's withholding along with the rest of the payroll — it is not withheld separately inside the settlement. What a settlement contains.

The Christmas bonus does not count

The aguinaldo is exempt from income tax and carries no social security. It is not added to the month's salary for withholding purposes. How it is calculated.

How it is calculated in practice

  • Employee by employee

    The tax is personal: it is calculated on each worker's salary with their own bands and their own credits. It cannot be worked out from the payroll total.

  • The results are added up

    The month's total is what is declared and paid, and what goes into the entry as a withholding.

  • It is remitted to the tax authority

    The payable is cleared by that remittance. A leftover balance means someone withheld and did not remit.

From Ticuenta

The bands next to the entry

The year's bands and credits stay to hand while the payroll is recorded, and the withholding lands in its own payable account.

See how it works

About this article. The bands and credits are those of the 2026 tax period, published by the tax authority. They are updated each year by decree: confirm the period's figures before applying them.

Verified as of 24 September 2026. Tax rules change. This is information, not tax advice.

Sources: Ministry of Finance Current legal texts (Sinalevi)

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