Cost of an employee in Costa Rica (2026)
What an employee really costs an employer in Costa Rica: gross salary plus mandatory employer social contributions.
On a gross salary of CRC 2,000,000 per month in Costa Rica, an employer pays about CRC 2,533,400 in total once mandatory employer social contributions of 26.7% on top of the gross are included.
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How salary is taxed in Costa Rica
Income tax in Costa Rica is progressive: marginal rates rise from 10% to 25% as income grows.
Employees also pay social contributions of around 10.83% of gross salary.
The standard VAT rate is 13%.
| Annual taxable income | Tax rate |
|---|---|
| Up to CRC 11,016,000 | 0% |
| Up to CRC 16,164,000 | 10% |
| Up to CRC 28,368,000 | 15% |
| Up to CRC 56,724,000 | 20% |
| CRC 56,724,000 and above | 25% |
Frequently asked questions
What does it cost to employ someone in Costa Rica?
On top of the gross salary, an employer in Costa Rica pays mandatory social contributions. The total cost of employment is the gross salary plus those employer contributions.
Are employer contributions the same as salary deductions?
No. Employer contributions are paid by the company in addition to the gross salary, while employee deductions (income tax and social contributions) are taken out of the gross to leave the net take-home pay.
Employer-contribution rates are approximate and may be capped or vary by region and sector.
Approximate 2026 estimate. Simplified model, verify before relying on it. Not tax advice.
Rates updated June 2026