Employer of Record in Costa Rica

For companies building teams of 10 or more across business, technical, and operational functions — not for individual hires.
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Why companies build teams in Costa Rica

Lundi's Costa Rican base — San José metropolitan area for technology, BPO, and corporate operations; Heredia and Cartago for engineering and electronics. Higher cost than Colombia or Mexico but higher English fluency, US Central time-zone alignment, and Free Trade Zone tax structures for export-services operations.

Languages

Spanish

Payroll Frequency

Monthly, Bi-Monthly, Weekly

Currency

CRC

Capital City

San José

Employer Tax Rate

26.50%

Costa Rica is the Americas' premier nearshore market for US companies that want quality over cost. Intel, Microsoft, Amazon, HP, and Procter & Gamble have built substantial operations here over 30+ years. Strong fit for technology, finance, customer success, and engineering serving US customers. Employer costs run ~26–30% above gross. Higher unit cost than Colombia (~30–40% more) or Mexico (~10–20% more), but consistently strong English fluency, full US Central time-zone overlap, and Free Trade Zone tax structures for qualifying export-services operations. For companies building teams of 10+, not individual hires.

Why companies build teams here

Costa Rica has built a mature nearshore market for US companies over 30+ years — driven initially by Intel's 1997 investment and subsequently by Microsoft, Amazon, HP, and Procter & Gamble building substantial operations. The talent pool is smaller than Mexico or Colombia but consistently higher quality on English fluency and US cultural alignment.

Two primary hub areas.

Greater San José metropolitan area (San José, Escazú, Heredia, Cartago, Alajuela) concentrates virtually all professional employment. Different sub-areas specialize: San José and Escazú for corporate, finance, and BPO; Heredia for technology operations and Free Trade Zone tenants; Cartago for engineering; Alajuela for electronics manufacturing-adjacent operations.

Tertiary cities (Limón, Puntarenas) are less common for international employers but Lundi can source for specific operational roles.

Operating context. Costa Rica is on CST (UTC-6), same as Dallas/Chicago. Full US Central business-hours overlap year-round (Costa Rica doesn't observe DST). English proficiency among Costa Rican tech and BPO professionals is consistently strong — the country invested heavily in bilingual education starting in the 1990s and the multinational employer ecosystem has reinforced this. Costa Rica vs Mexico: Costa Rica wins on English fluency consistency and lower attrition; Mexico wins on talent depth and absolute cost. Costa Rica vs Colombia: Costa Rica wins on English fluency average and political stability; Colombia wins on cost (typically 30–40% cheaper for comparable senior roles) and absolute talent pool size. Costa Rica is the right answer when quality and US business alignment matter more than per-unit cost.

Employer cost reality. CCSS employer contributions run ~26.5% above gross (health, pension, and other social programs combined), plus INS workers' compensation insurance (sector-specific). Mandatory: aguinaldo (1 month salary, paid December), 2 weeks vacation after 50 weeks. All-in employer cost typically lands ~35–40% above gross. Mid-level engineers run $3,500–$5,500/month all-in; senior engineers and team leads $5,500–$9,000/month — higher than Colombia or Mexico for comparable seniority but lower than US.

Employment Structure: EOR, Entity, or Build–Operate–Transfer

Costa Rican employment is governed by the Código de Trabajo plus the Constitution's labor protections — employee-protective but well-administered through the CCSS (Caja Costarricense de Seguro Social) and INS (Instituto Nacional de Seguros) systems.

EOR works well up to 20–30 headcount. Lundi's Costa Rican employment infrastructure handles CCSS registration (~26.5% employer-side covering health, pension, and other social programs), INS workers' compensation, statutory leave administration, aguinaldo (13th month, payable December), and vacation pay tracking. The EOR ceiling is high in Costa Rica given relatively standardized employment administration.

Local entity (SA or SRL) makes sense at scale or for Free Trade Zone structures. A Costa Rican SA or SRL is the standard structure. Setup is reasonable (~1–2 months). Lundi's BOT pathway can guide entity setup.

Free Trade Zone (Régimen de Zona Franca) — the structural Costa Rica advantage. Qualifying export-services operations registered under the Costa Rican Free Trade Zone regime receive significant tax benefits: full CIT exemption for up to 8 years (followed by reduced rates), exemption from import duties on capital goods, and other incentives. For technology services, BPO, customer success, and engineering operations serving non-Costa Rican customers, this structure materially improves unit economics. Lundi's BOT pathway includes Free Trade Zone qualification guidance.

Aguinaldo and benefit loading. Mandatory: aguinaldo (1 month salary, paid by December 20), 2 weeks vacation after 50 weeks of service, CCSS contributions (~26.5%), INS contributions. Total all-in benefit loading typically lands 35–40% above gross.

Why HRBP infrastructure matters in Costa Rica. Performance management and termination require documented procedural compliance. Despite the smaller market, employment law is rigorous and termination without cause triggers preaviso plus auxilio de cesantía (severance). Every Lundi Costa Rica team includes a named HRBP from day one.

Cost of Employment in Costa Rica

What it costs to employ someone through Lundi.

Lundi's cost is the all-in cost of the employee — gross salary plus statutory employer contributions plus customary benefits — and a Lundi management fee on top. The management fee depends on team size and scope: smaller teams pay a higher per-head rate, teams of 20+ get materially better unit economics, and Build–Operate–Transfer engagements are structured separately.

The alternative paths look like: setting up your own local entity (meaningful months of legal and accounting work, plus ongoing in-country HR, payroll, and compliance infrastructure), engaging a local recruitment agency on contingency (typically a percentage of first-year compensation, paid once, with no ongoing employment relationship), or hiring as a contractor (lower upfront cost, real misclassification risk in most jurisdictions). Lundi is faster than entity setup, structurally different from contingency recruitment, and lower-risk than contractor arrangements.

Talk to us for specific pricing.

Talk to us about Costa Rica

Employer Tax Costs in Costa Rica

In Costa Rica, an employer’s social contributions total 26.5% and include contributions for health and maternity, basic pension, Banco Popular employer fee, family assignations, social aid, INA, contributions from Banco Popular employer, labor capitalization fund, complementary pension fund, and the National Insurance Institute (INS).

Employee Income Taxes in Costa Rica

Employees in Costa Rica pay between 0% and 25% in taxes depending on their income bracket. Employees also pay social security contributions of 10.5%.

Employee Probation in Costa Rica

The probationary period in Costa Rica is three months.

Employee Overtime in Costa Rica

Employees in Costa Rica work 48 hours per week.Any work over 48 hours in a week is considered overtime, and is paid at 150% regular wages. On holidays or weekly rest days, that amount is doubled. Overtime work cannot exceed four hours per day.

Employee Notice in Costa Rica

Notice periods in Costa Rica depend on the length of employment. The breakdown is as follows:

  • Less than three months: No notice required
  • Three to six months: One week notice
  • Six months to one year: Two weeks notice
  • More than one year: One month notice

During the notice period, the employee is entitled to take one paid day off per week to find a new position.

Termination in Costa Rica

Employees in Costa Rica dismissed without just cause are entitled to severance pay. The amount of this depends on their length of employment:Three to six months: Seven days of paySix months to one year: 14 days of payOne year: 19.5 days of payTwo years: 20 days of payThree years: 20.5 days of payFour years: 21 days of payFive years: 21.24 days of paySix years: 21.5 days of paySeven to nine years: 22 days of pay10 years: 21.5 days of pay11 years: 21 days of pay12 years: 20.5 days of pay13 years and over: 20 days of payEmployees fired with just cause are paid only their acquired vacation days and Christmas bonus portion earned that year.

How Lundi works in Costa Rica

Build

We scope your team and recruit the right people in-country — finance, accounting, HR/payroll, BD, ops, or IT.
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Operate

We employ the team via our local entity and run the day-to-day — payroll, compliance, HR, and performance management.
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Transfer

When you're ready, we transition the team to your own legal entity. Or stay on Lundi's infrastructure indefinitely — your choice.
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Why Companies Choose Lundi

If you need help with anything, we're here for you

Who is Lundi for?

Lundi works with companies building teams of 10 or more across business, technical, and operational functions . Not for one-off hires or individual placements.

How is this different from an EOR?

EOR platforms employ individuals for you. Lundi recruits, employs, and operates concentrated teams — including day-to-day management, HR, and an optional path to your own entity. It's the operating model for companies that have outgrown the EOR ceiling.

Still have any questions? Talk to us.