Rivermate | Costa Rica flag

Costa Rica

Benefits and Entitlements Overview

Learn about mandatory and optional employee benefits in Costa Rica

Mandatory benefits

Costa Rica has a robust social security system that provides a comprehensive package of mandatory employee benefits. These benefits are administered through the Caja Costarricense de Seguro Social (CCSS) and funded jointly by employers and employees.

Core Mandatory Benefits:

  • Social Security: This is the cornerstone of mandatory benefits and covers various aspects including:

    • Health Insurance: This grants employees access to a network of public hospitals and clinics, with contributions covering preventative care, medical consultations, medications, and hospital stays.
    • Disability Insurance: This offers financial support to employees who become disabled due to illness or workplace accidents.
    • Death and Survivors' Benefits: This provides financial assistance to the families of deceased employees.
  • Paid Leave: Costa Rican employees are entitled to various types of paid leave:

    • Annual Vacation Leave: Employees with at least 50 weeks of continuous service receive a minimum of 12 paid working days (two full workweeks) of annual vacation leave. Those employed for less accrue one day of paid leave per month.
    • Sick Leave: Employees receive paid sick leave, with employers covering 50% of the salary for the first three days. From the fourth day onward, 60% of the salary is paid.
    • Maternity Leave: Working mothers are entitled to four months of paid maternity leave at 60% of their salary, followed by an optional unpaid extension of up to three months.
    • Paternal Leave: Fathers are entitled to one week of paid leave at the time of childbirth.
  • Thirteenth Salary (Aguinaldo): A unique benefit, Costa Rican employees are entitled to a mandatory thirteenth-month salary payment by December of each year. This bonus is calculated based on the employee's salary and time worked during the year.

Optional benefits

In Costa Rica, employers often provide additional perks to attract and retain top talent. Here are some commonly offered optional benefits:

Supplemental Health Insurance

Costa Rica's public health system offers good coverage, but some employees might prefer broader options. Employers may offer supplemental private health insurance plans that cover dental care, vision care, and a wider network of hospitals and clinics.

Voluntary Pension Plans

The mandatory social security pension provides a basic retirement income. Employers may offer voluntary pension plans to help employees save for a more comfortable retirement.

Work-from-Home Allowances

With the rise of remote work opportunities, employers may offer allowances to cover expenses associated with working from home, such as internet bills or ergonomic furniture.

Meal Vouchers or Transportation Stipends

These benefits can help offset employee lunch costs or ease the burden of commuting expenses.

Tuition Reimbursement

Employers seeking to support professional development may offer programs that reimburse employees for tuition costs associated with job-related courses or certifications.

Holiday Bonuses

Providing additional bonuses beyond the mandatory thirteenth-month salary can be a way to boost employee morale during the holiday season.

Cell Phone Bills

In some cases, employers may contribute towards an employee's cell phone bill, particularly if the phone is used for work purposes.

Life Insurance

Offering group life insurance plans can provide employees with financial security for their families in case of death.

Health insurance requirements

In Costa Rica, the Caja Costarricense de Seguro Social (CCSS) provides mandatory health insurance for all employees. This robust social security system is a cornerstone of the country's healthcare infrastructure.

Every employer in Costa Rica is legally required to enroll their employees in the CCSS health insurance program. This program provides employees with access to a network of 29 public hospitals and numerous clinics throughout the country. While the CCSS covers a broad range of medical services, there may be instances where the costs associated with certain treatments or medications are not fully covered.

Employer Contributions

Employers contribute a significant portion, typically 26.67%, towards their employees' CCSS health insurance. This contribution ensures that employees receive healthcare benefits without a substantial financial burden.

Employee Contributions

Employees also contribute a percentage of their salary towards their CCSS health insurance. The exact contribution amount may vary depending on factors such as income.

Supplementing with Private Health Insurance

While the CCSS provides a solid foundation for healthcare, some employees might opt for supplemental private health insurance. Private insurance plans offer benefits such as reduced waiting times for specialist consultations and procedures, coverage for a wider range of medical services and medications compared to the CCSS, and access to private hospitals and clinics. The cost of private health insurance varies depending on the chosen plan, the employee's age, and the desired level of coverage.

In summary, Costa Rica mandates health insurance coverage for all employees through the CCSS program. Employers contribute a substantial portion towards employee health insurance through the CCSS. Private health insurance offers additional benefits but comes at an extra cost.

Retirement plans

Costa Rica provides a multi-tiered retirement system to ensure financial security for employees post-retirement.

Public Pension System (Régimen de Invalidez, Vejez y Muerte - IVM)

The IVM, a contributory, earnings-related public pension program, forms the basis of Costa Rica's retirement system. It's administered by the Caja Costarricense de Seguro Social (CCSS).

  • Eligibility: All employees in Costa Rica are automatically enrolled in the IVM program.
  • Retirement Age: The standard retirement age for a full pension is 65 for men and 63 for women (as of January 2024) with a minimum of required contributions. Early retirement is possible, but it reduces the monthly pension amount.
  • Benefits: The IVM pension benefit is calculated based on the employee's average salary and the number of contribution months. It typically replaces around 30% of the average base contribution wage.

It's important to note that the IVM program alone might not be sufficient to maintain a comfortable standard of living in retirement. This is where additional retirement savings options come into play.

Mandatory Savings Program (Régimen Obligatorio de Pensiones - ROP)

The ROP is a mandatory savings program that complements the IVM public pension.

  • Function: Employees and employers contribute a percentage of the employee's salary to individual savings accounts managed by private financial institutions authorized by the Superintendencia de Pensiones (SUPEN).
  • Benefits: These contributions accumulate over time, and employees can access the funds upon retirement. The accumulated amount, along with investment returns, determines the final retirement benefit.

Voluntary Personal Pension Plans

Costa Rica also allows employees to participate in voluntary personal pension plans offered by private financial institutions. These plans offer various investment options and allow for greater control over retirement savings.

Choosing the Right Retirement Plan

The ideal retirement plan combination depends on individual circumstances and desired retirement lifestyle. Consulting with a financial advisor can be beneficial to navigate the options and make informed decisions.

Rivermate | A 3d rendering of earth

Hire your employees globally with confidence

We're here to help you on your global hiring journey.