Costa Rica is a rugged country in Central America containing rainforests and beaches on the Caribbean Sea and Pacific Ocean. Expanding to this beautiful country is an exciting decision for your company,...
Read MoreCosta Rica is a rugged country in Central America containing rainforests and beaches on the Caribbean Sea and Pacific Ocean. Expanding to this beautiful country is an exciting decision for your company, but there are necessary factors to consider for your new location to be successful. You must assess your Costa Rica payroll options, set up your payroll, and ensure complete compliance.
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Costa Rica is a rugged country in Central America containing rainforests and beaches on the Caribbean Sea and Pacific Ocean. Expanding to this beautiful country is an exciting decision for your company, but there are necessary factors to consider for your new location to be successful. You must assess your Costa Rica payroll options, set up your payroll, and ensure complete compliance.
Globalization Partners can help with our Costa Rica payroll outsourcing services. We use our Employer of Record solution to run your payroll, ensuring you stay compliant so you can focus on growing your business.
Costa Rica has a social security system called the Caja, which gives employees free healthcare, sick leave, disability pensions, and retirement benefits. As an employer, you are required to register all employees with the Caja and contribute about 26.5% of their salary. Employees must contribute 10.5%.
Employers also need to make sure employees are registered to pay personal income tax. Costa Rica uses a progressive income tax scale that goes up to 25%. Companies also use a progressive scale for corporate income tax that fluctuates based on profits. Depending on what you earn in a year, you could owe up to 30%.
You have four main Costa Rica payroll options:
Before you set up your Costa Rica payroll, you have to establish a subsidiary in the country. The process to set up a subsidiary can take weeks or months depending on where you incorporate and what type of entity you choose. However, it’s a necessary step before you can hire employees, run payroll, and start operating in Costa Rica.
Globalization Partners lets you skip this step. We use our existing subsidiary in Costa Rica to hire employees on your behalf, set up your Costa Rica payroll, and help you stay compliant.
We recommend outlining certain entitlement and termination terms in an employment contract before setting up your Costa Rica payroll. Termination can be difficult in Costa Rica, and you need to terminate employees based on a cause included in Article 81 of the Labor Code. As the employer, you carry the burden of proof that you terminated an employee for cause.
Globalization Partners is the Costa Rica payroll outsourcing solution you need to succeed in your expansion. Contact us today to learn more.
THIS CONTENT IS FOR INFORMATIONAL PURPOSES ONLY AND DOES NOT CONSTITUTE LEGAL OR TAX ADVICE. You should always consult with and rely on your own legal and/or tax advisor(s). G-P does not provide legal or tax advice. The information is general and not tailored to a specific company or workforce and does not reflect G-P’s product delivery in any given jurisdiction. G-P makes no representations or warranties concerning the accuracy, completeness, or timeliness of this information and shall have no liability arising out of or in connection with it, including any loss caused by use of, or reliance on, the information.
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