Sourcing the right benefits and offering an acceptable level of compensation can present a challenge in your home country — it becomes even more difficult during expansion to a new country. When...
Read MoreSourcing the right benefits and offering an acceptable level of compensation can present a challenge in your home country — it becomes even more difficult during expansion to a new country. When growing your company to Costa Rica, you must learn the country's compensation laws, discuss guaranteed and supplemental benefits, and decide whether to outsource or do the work yourself.
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Sourcing the right benefits and offering an acceptable level of compensation can present a challenge in your home country — it becomes even more difficult during expansion to a new country. When growing your company to Costa Rica, you must learn the country’s compensation laws, discuss guaranteed and supplemental benefits, and decide whether to outsource or do the work yourself.
Globalization Partners can step in and help you discover the right Costa Rica benefit management plan for your company. Our experts understand Costa Rica’s compensation laws and can ensure you will stay compliant. We take on the risk, so your only responsibility is growing your company.
Costa Rica’s minimum wage depends on an employee’s job and skill. For example, as of 2021, a house cleaner makes about 205,047 colones per month, but those with a licentiate degree earn at least 682,607 colones a month. The typical workweek in Costa Rica is 48 hours a week. Any overtime should be paid at 150% of an employee’s regular wage.
According to Costa Rica’s compensation laws, employees must receive two bonuses each year — a Christmas bonus and Aguinaldo. The Christmas bonus equals one month’s wages and must be paid between December 1 and 20. The Aguinaldo also equals a month’s wages and gets paid in two installments, one in June and one in December.
Your Costa Rica benefit management plan must include statutory benefits required by law. The country has nine public holidays employees get off, and salaried employees also get paid for Virgin of Los Angeles Day and Cultural Day regardless of whether they work. Costa Rica’s Labor Code states that employees receive one day of vacation for every month they work and two full weeks of vacation after 50 weeks of work.
Pregnant employees must receive one month of paid maternity leave before the birth of a child and three months after birth. As an employer, you need to pay 50% of the employee’s salary for those four months of leave while the Social Security Administration will pay the remaining half.
Another important aspect of your benefits management plan is providing supplemental benefits that will encourage employees to stay in their roles and attract top talent to your open positions. We recommend budgeting 26% on top of an employee’s gross salary for additional benefits the employee may need.
You can choose what kind of supplemental benefits you’d like to offer employees. One popular option is private healthcare, which costs about $60-130 a month per person depending on an employee’s gender, age, and other factors.
Before you can disperse benefits and compensation in Costa Rica, companies must establish a subsidiary in the country. A subsidiary will help you legally work in Costa Rica, allow you to hire employees, and more. Your other option is Costa Rica compensation and benefit outsourcing through Globalization Partners. We handle your payroll, benefits, compensation, and more, and you won’t have to go through the lengthy subsidiary setup process.
As your company grows, you may find yourself designing benefits packages for employees in new countries. The benefits you choose can support your success and make your business more competitive in the labor market. As you manage employee benefits planning in Costa Rica, ensure you’re meeting legal regulations and your team’s needs.
Your benefits plan is one of many factors that will contribute to your company’s growth. Designing a benefits plan according to the market can improve your recruitment efforts and persuade more job seekers to apply for your vacancies.
Benefits also increase morale and retention rates within the workplace, lowering your training costs for new employees and keeping your workers dedicated to your mission.
Supplemental benefits beyond the legal requirements will make your business stand out. Possible offerings include:
Before you consider fringe benefits, you need to think about your legal obligations as an employer. Required benefits in Costa Rica include:
You have to consider two perspectives when you start the design process — your company and your employees. While you need to remain within your organization’s financial abilities, your plan should also meet workers’ needs and expectations. You can find a balance between these two perspectives with the right approach.
Benefits require budgeting. If you’re not aware of your financial resources, you won’t know what you can allocate to employee provisions. Assess your projected revenue and expenses for the year and designate funding for your benefits plan.
You can also use this initial stage to evaluate your goals. For example, if you want to focus on building revenue, you should consider how factors like higher retention rates can improve your business and save you money in the long term.
Understanding the labor market can help you choose benefits that will make you competitive with other companies. Research other businesses in the area, focusing on those in your industry. These standards will inform employees’ expectations.
You can also speak with employees directly to understand their needs. Conduct interviews or distribute surveys to learn what workers want from their benefits packages and which offerings they value most.
With everything you’ve learned, you can design a benefits plan that balances your resources with market standards. Start by distributing funds to any required benefits and allocate the remaining budget to the priority benefits you discovered in your research.
Benefits costs will vary between businesses. Several factors, like size and industry, can affect a company’s benefits and how much they spend. For this reason, it’s essential to create a benefits budget according to your unique needs rather than focusing on a national average cost. This approach makes it easy to scale your benefits as your business grows, and it will help you anticipate costs early in the process.
Calculations for benefits can be direct or more complex depending on the provision. If you offer holiday bonuses, you can divide a predetermined amount evenly among your team. Tuition reimbursements, on the other hand, might vary.
Social security contributions are one of the benefits that require a specific calculation. Employers are responsible for contributing 26.5 percent to the social insurance fund, while employees must pay 10.5 percent. These rates are outlined in the country’s labor laws.
The tax laws classify income as any earnings derived from goods located, assets used, or services rendered within the territory. This definition includes fringe benefits, so you should include them in income tax calculations.
Employers are responsible for deducting income tax from employee paychecks. Some fringe benefits may already have a cash value, like a holiday bonus. Other benefits, like company cars, require an assigned monetary value.
Costa Rica’s social insurance system funds a majority of the public healthcare sector. This coverage allows residents to receive low-cost or free care in any public facility. The country also has many private operations that accept cash or voluntary insurance schemes.
Employers and employees are obligated to contribute to the social security fund to cover public healthcare costs. Supplemental
Get in touch with our team today to learn more about our international benefits support.
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