Looking to hire in Costa Rica

Sick leave is provided on an annual basis. A medical certificate is required when an employee is absent for more than 1 day due to illness.

Employees in Costa Rica must submit current-year business expenses within 60 days of the expense date or within 30 days after returning from a business trip, whichever is later. Prior-year expenses must be submitted no later than February 1 of the following year.

Phone, internet, and coworking costs can be reimbursed tax-free when they are business-related and properly documented. Attach a tax invoice or receipt showing when and where you paid, how much, what service was provided, and who provided it; for some items, the employee’s name must also appear.

Work equipment and supplies are reimbursed on a non-taxable basis when supported by a tax invoice or receipt that shows the date, amount, merchant or service provider, and a description of the purchase or service. For laptops, office equipment, software subscriptions, and similar items, the document should also include the employee’s name.

Most business travel costs are non-taxable when backed by appropriate documentation. In general, provide a tax invoice or receipt showing the date, amount, merchant or service provider, and what was purchased; for many travel items, the employee’s name should also appear. For some transport and fuel costs, a bank statement, transaction details, or booking confirmation can also be used. Mileage claims must be supported by a mileage log.

Everyday meals, groceries, and business meals with clients or partners can be reimbursed without tax when they are business-related and supported by a tax invoice or receipt showing the date, amount, merchant or service provider, and what was purchased. For larger meal amounts (based on company policy, not a statutory threshold), the document should also include the employee’s name.

Training, courses, books, promotional items, gifts, and certain medical costs may be reimbursed on a non-taxable basis when they are business-related. Provide a tax invoice or receipt showing the date, amount, merchant or service provider, and description of the purchase or service; for training, books, promotional items, and gifts, the employee’s name should also appear. For training and gifts, a bank statement, transaction details, or other documents can also be used as supporting evidence.

Contractual and discretionary bonuses in Costa Rica, including incentive payments and commissions, are taxed as regular income and are subject to applicable social security contributions. Because Costa Rica uses progressive personal income tax brackets, withholding in months when bonuses are paid may be higher than in months with salary alone. The 2026 monthly personal income tax brackets range from 0% (up to ₡918,000 per month) through 10%, 15%, and 20%, up to 25% for income above ₡4,727,000 per month.

For business travel, Costa Rican rules focus on documentation rather than a statutory per diem ceiling. When per diem is paid as a reimbursement of substantiated expenses backed by invoices or a liquidation, it is treated as an expense reimbursement and not taxed. If the same type of payment is made as an undocumented flat or fixed amount, it is treated as an allowance and becomes taxable income to the employee.

Non-cash benefits that enrich the employee, such as private medical insurance or car insurance on a personal vehicle, are treated as salary in kind and must be reported at market value for social security and income tax purposes. In addition, employers may offer a range of discretionary allowances that are optional, taxable, and can be extended to one or more employees at the employer’s discretion; some must also be shown on the payslip as salary.