Glossary of employment in Costa Rica: payroll, severance and multinationals

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Your salary and your contract

Salario bruto (gross salary): What your contract says before any deduction. It is the figure quoted in job postings and the base for social security, income tax and the aguinaldo; severance and notice pay, by contrast, are calculated on the average of your last six months. It is not what lands in your account.; See also: Salario neto (take-home pay), Cuota obrera (employee contribution)
Salario neto (take-home pay): What is left after the CCSS employee contribution and income tax come out of the gross. Two people on the same gross can take home different amounts, because tax credits for children and spouse reduce the tax.; See also: Salario bruto (gross salary), Créditos familiares (family tax credits)
Aguinaldo (13th-month bonus): The extra salary paid within the first twenty days of December. It is the sum of what you earned between December 1 of the previous year and November 30, divided by twelve — by twelve, not by the number of months you worked. The statutory aguinaldo, that twelfth, is exempt from income tax and from CCSS contributions; the exemption is written against that twelfth, so a voluntary aguinaldo above it may fall under a different treatment.; See also: Liquidación (final settlement)
Jornada ordinaria (standard working hours): The regular working schedule agreed in your contract, within the limits the Labour Code sets. Time worked beyond those limits counts as overtime. As a general rule it covers office work too, though some roles and regimes have rules of their own.; See also: Horas extra (overtime)
Horas extra (overtime): Time worked beyond the standard schedule. It is paid with a premium over ordinary salary. It counts toward the aguinaldo base, and overtime that is habitual and periodic also counts in the six-month average used to calculate severance and notice pay. Some roles can fall outside the working-hours cap, under rules of their own.; See also: Jornada ordinaria (standard working hours), Aguinaldo (13th-month bonus)
Período de prueba (probation period): The name given to the start of an employment relationship, its first three months. That threshold is in the Labour Code by two separate routes: article 28 makes notice apply after no less than three months of continuous work, and article 29 grants no severance below that length of service. What has already been earned — salary, prorated vacation and aguinaldo — is paid regardless, and some special protections do not depend on length of service.; See also: Preaviso (notice period), Liquidación (final settlement)
Vacaciones (paid leave): Two weeks for every fifty weeks of continuous work, under article 153 of the Labour Code. If the contract ends before those fifty weeks are complete, the same article sets a floor of one day of vacation per month worked, payable on departure. Unlike severance and notice pay, vacation paid out when the contract ends is subject to income tax; some regimes have their own rules, such as the one for domestic workers.; See also: Liquidación (final settlement), CCSS (Costa Rican Social Security Fund)
Incapacidad (medical leave): Medical leave issued by the CCSS or the INS when illness or an accident keeps you from working. What you receive during it is a benefit, not salary, which is why that period — both the time and the amount — falls outside the aguinaldo base. Maternity leave, by contrast, does count toward that base.; See also: CCSS (Costa Rican Social Security Fund), Aguinaldo (13th-month bonus)
Licencia de maternidad (maternity leave): Maternity leave as recognised by Costa Rican law. Unlike ordinary medical leave, this period does count toward the aguinaldo base: the official MTSS booklet lists it explicitly. Its length, who covers the pay, and the protection against dismissal during pregnancy and breastfeeding are governed by their own rules, which this glossary does not spell out.; See also: Incapacidad (medical leave), CCSS (Costa Rican Social Security Fund)
Orden patronal (CCSS eligibility slip): The slip your employer issues to prove you are insured and up to date with the CCSS. It is what a clinic or hospital asks for at check-in. If your employer is not filing payroll, there is no orden patronal.; See also: CCSS (Costa Rican Social Security Fund), Planilla (payroll), Constancia salarial (proof of income)
Constancia salarial (proof of income): A letter from your employer certifying your role, your salary and your start date. It is what banks ask for on a loan application and consulates for a visa. It is not the same as the orden patronal, which only proves insurance coverage.; See also: Orden patronal (CCSS eligibility slip)
Planilla (payroll): The company payroll: who works there, what they earn and what is reported for each. Being "en planilla" means being an employee with full social security contributions, as opposed to invoicing as an independent contractor.; See also: SICERE (unified contribution system), CCSS (Costa Rican Social Security Fund)
Salario mínimo (minimum wage): The legal pay floor, set by decree and updated each January. It is not a single figure. The amount that applies to a given role is looked up in the minimum-wage decree in force.; See also: Salario bruto (gross salary), Base Mínima Contributiva (contribution floor)
Salario en especie (payment in kind): The part of your pay received as goods or services rather than money: housing, meals, use of a vehicle. It does count toward the aguinaldo base, and the official MTSS booklet describes that base as the value agreed by the parties or up to 50% of what is received in cash. None of these calculators includes it, because its valuation depends on what was agreed in each case.; See also: Aguinaldo (13th-month bonus), Salario bruto (gross salary)
Contrato por tiempo indefinido (open-ended contract): A contract with no agreed end date: the relationship continues until one side ends it. It is the usual way multinationals hire for permanent roles. Neither the MTSS official calculator nor ours covers fixed-term contracts among its exit reasons.; See also: Cesantía (severance pay)

Social security and taxes

CCSS (Costa Rican Social Security Fund): The Costa Rican Social Security Fund, which runs public health insurance and the state pension scheme. As a general rule every salaried worker contributes, and two of the deductions on your payslip come from it: health (SEM) and pension (IVM). The third component of the employee contribution, the Banco Popular savings, is collected on the same payroll filing but belongs to a separate scheme.; See also: SEM (health insurance), IVM (state pension), Cuota obrera (employee contribution)
SEM (health insurance): Seguro de Enfermedad y Maternidad: the share of your contribution that funds medical care, sick leave and maternity leave. It is the health portion of the deduction.; See also: CCSS (Costa Rican Social Security Fund), IVM (state pension)
IVM (state pension): Invalidez, Vejez y Muerte: the CCSS pension scheme. It is the first pillar of your retirement, with the ROP as the second. Contributions are computed on the salary the company reports, so an under-reported salary stays under-reported in your contribution history.; See also: CCSS (Costa Rican Social Security Fund), ROP (mandatory private pension)
Cuota obrera (employee contribution): The share of social security taken out of your salary: health, pension and the mandatory Banco Popular savings. It shows as one line on your payslip but goes to three different places.; See also: Cuota patronal (employer contribution), Banco Popular mandatory savings, Salario neto (take-home pay)
Cuota patronal (employer contribution): What the company pays for each employee, on top of your salary and separately from the employee contribution. It does not come out of your pocket and does not appear on your payslip, but it is part of what the role costs.; See also: Cuota obrera (employee contribution)
Base Mínima Contributiva (contribution floor): The minimum amount the CCSS uses to compute contributions. It is a floor, not a ceiling: as a general rule, someone earning less than the BMC still contributes on the BMC, so the deduction weighs proportionally more on their actual salary. It has exceptions — holding more than one job, starting or leaving mid-month, sick or unpaid leave longer than fifteen days — that this glossary does not cover.; See also: CCSS (Costa Rican Social Security Fund), Cuota obrera (employee contribution)
ROP (mandatory private pension): Régimen Obligatorio de Pensiones Complementarias: the second pillar of your pension, run by a fund manager rather than by the CCSS. Unlike the IVM, it is an individual account in your name. Switching managers is possible, but under conditions and timelines of its own.; See also: IVM (state pension)
Banco Popular mandatory savings: A mandatory contribution under Ley 4351, deducted from your salary and capitalised in your name. It is collected alongside the CCSS contributions on the same payroll filing, but it is a separate scheme and the Fund does not administer it. The conditions for withdrawing it are set by that scheme.; See also: Cuota obrera (employee contribution)
Impuesto al salario (income tax on wages): Income tax on employment income. It is bracketed and marginal: each bracket taxes only the slice of salary that falls inside it, so moving up a bracket never leaves you with less money. The employer withholds it and remits it to the tax authority.; See also: Créditos familiares (family tax credits), Salario neto (take-home pay)
Créditos familiares (family tax credits): Fixed reductions to the tax itself — not to your salary — for each qualifying child and for a spouse. They come off the tax already computed, not off gross pay, and where both parents are taxpayers a child is claimed by one of them only. The requirements for each credit are set in the income tax law and the amounts in the decree updated every year.; See also: Impuesto al salario (income tax on wages), Salario neto (take-home pay)
SICERE (unified contribution system): The centralised collection system through which the CCSS charges all social contributions on a single payroll filing. It is also where you check your contribution history — worth reviewing now and then, since reporting errors are far easier to fix immediately than twenty years later.; See also: CCSS (Costa Rican Social Security Fund), Planilla (payroll)
Cargas sociales (social security contributions): The umbrella term for everything a salary contributes to the CCSS and Banco Popular: both what is deducted from you (the employee share) and what the employer pays separately (the employer share). The common confusion is thinking the deduction on your payslip is the whole cost of the role: the employer share is paid separately and never appears there.; See also: Cuota obrera (employee contribution), Cuota patronal (employer contribution), CCSS (Costa Rican Social Security Fund)

When the contract ends

Liquidación (final settlement): Everything the company owes you when the contract ends: severance and notice pay where they apply, plus the vacation and aguinaldo you already earned and any unpaid salary. How much of that you get depends on why the relationship ended, not on tenure alone.; See also: Cesantía (severance pay), Preaviso (notice period), Finiquito (settlement document)
Cesantía (severance pay): Compensation for years of service, exempt from income tax. Severance is due for some exit reasons and not for others; voluntary resignation does not generate it. The Labour Code sets a table of days of salary per year worked — the rate rises up to a point of tenure and then falls again — with a cap: the compensation does not exceed the last eight years of the relationship in the ordinary private-sector regime; some public-sector collective agreements carry higher ones.; See also: Liquidación (final settlement), Preaviso (notice period), Dismissal with employer liability
Preaviso (notice period): The advance notice each side owes the other before ending the contract. It applies from three months of continuous work and has three periods that grow with tenure up to a one-month cap: it stops there, whether you have two years or twenty. If the employer does not give it, they pay it in cash; if it is the worker who does not, the Ministry of Labour criterion is that the employer cannot deduct it from the settlement and has thirty days to claim it before the Labour Courts.; See also: Liquidación (final settlement), Cesantía (severance pay), Período de prueba (probation period)
Dismissal with employer liability: A dismissal not grounded in one of the just causes listed in the Labour Code. It triggers severance and notice pay, on top of prorated vacation and aguinaldo, and it is the most common severance scenario. Some workers hold special protections, and for them termination follows its own rules.; See also: Cesantía (severance pay), Preaviso (notice period), Dismissal with just cause
Dismissal with just cause: A dismissal grounded in one of the just causes listed in the Labour Code. It gives rise to no severance and no notice pay, but it does give rise to the prorated vacation and aguinaldo already earned. The formal requirements — how and where the cause must be stated — are set by the Labour Code and are not spelled out here.; See also: Dismissal letter, Dismissal with employer liability
Finiquito (settlement document): The document that itemises and pays out the final settlement, line by line. It is the record of which items were paid and for how much. What signing it means for a later claim is a legal question this glossary does not settle.; See also: Liquidación (final settlement), Preaviso (notice period)
Dismissal letter: The written notice with which an employer states that the contract is ending and gives the reason. It is where that reason is recorded, and the reason is what determines which items go into the final settlement. Whether it is mandatory in every case, and whether it also serves as proof of employment, is not something this glossary settles.; See also: Dismissal with just cause, Finiquito (settlement document)

The multinational world

Zona franca (free trade zone): A tax-incentive regime for companies exporting goods or services from Costa Rica. What it grants are tax benefits to the company, not a different kind of employment contract. How far the regime reaches into an employee’s terms of employment is not described here.; See also: Régimen definitivo (standard tax regime), Parque industrial (industrial park)
Régimen definitivo (standard tax regime): The ordinary tax regime, for companies outside the free trade zone. For a job seeker the difference matters less than it sounds: it changes how the company is taxed, and on its own it says nothing about the terms of the job.; See also: Zona franca (free trade zone)
Shared services: A centre that consolidates support functions — finance, HR, procurement, IT — for the corporation's operations across several countries. It is the model behind much of Costa Rica's multinational employment, and it explains the English requirement: your internal clients sit in another country.; See also: GBS (Global Business Services), Nearshore, Back office and front office
GBS (Global Business Services): Global Business Services: the evolution of the shared services centre toward higher-value work — analytics, controlling, automation — rather than purely transactional processing. In practice a GBS role tends to ask for more judgement and more English than a back-office one.; See also: Shared services, Back office and front office
Nearshore: Placing an operation in a country close to the client, in compatible time zones. It is Costa Rica's pitch against Asian destinations: the local workday overlaps with the United States, so work happens in real time rather than by email.; See also: Shared services
Back office and front office: Back office processes without talking to the end client: reconciliations, records, closings. Front office deals with them directly. The distinction matters in a job search because front office demands a higher level of English and usually pays more.; See also: Shared services, CEFR levels (A1 to C2)
SLA (service level agreement): The measurable commitment on how fast or how well something gets resolved. In a shared services centre your performance is measured against SLAs, so it is worth asking in the interview what they are and how they are computed.; See also: Shared services
CEFR levels (A1 to C2): The Common European Framework of Reference scale, A1 to C2, used in job postings to state the level of English required. The level a role requires is stated in the corresponding posting. The distance between one level and the next is not vocabulary — it is being able to argue, negotiate and disagree with ease.; See also: Back office and front office
Headquarters: The corporate seat where decisions are made. In a Costa Rican operation many roles report to or coordinate with headquarters abroad, which sets the schedule, the working language and often the pace.; See also: Shared services, CEFR levels (A1 to C2)
BPO (business process outsourcing): When a company hires an external provider to run an entire process instead of doing it in house. The difference from shared services is who employs you: there you work for the multinational that owns the process; in a BPO, for the provider serving several clients at once. Do not reduce it to "call centre": there is BPO in finance, IT support and HR.; See also: Shared services, GBS (Global Business Services)
Parque industrial (industrial park): The physical development — warehouses, offices, shared areas — where several companies cluster. In a job search it matters for your commute: the location determines whether there is a staff shuttle and how long you spend getting there. It gets confused with "zona franca" because they usually coincide at the same company, but one is a place and the other is a tax regime.; See also: Zona franca (free trade zone)
CINDE: Asociación Coalición Costarricense de Iniciativas de Desarrollo: a private, non-profit, non-political organisation, declared to be of public interest since 1984, dedicated to attracting foreign direct investment to Costa Rica. It is the organisation behind this platform, but it is not a government body and it neither grants nor administers the free trade zone regime. The vacancies posted here are offered by each company, and the company is the one that hires.; See also: Zona franca (free trade zone)

Finding and landing the job

ATS (applicant tracking system): The system companies use to receive and filter applications. It matters because the first read of your CV is sometimes not done by a person: keep the format simple, avoid odd columns and text inside images, and use the same words the posting uses.; See also: Currículum, CV and résumé
Currículum, CV and résumé: In Costa Rica the three words mean the same thing: a short one- or two-page document covering recent experience. Not to be confused with the academic CV, which is long and lists publications. Applying in English, aim for the short format.; See also: ATS (applicant tracking system), Cover letter
Cover letter: The note that accompanies your CV and explains why this role and why you. Not every company asks for one, but when there is a career switch or a gap in your history, it is the place to explain it before someone interprets it for you.; See also: Currículum, CV and résumé
Competency-based interview: The format that asks for concrete past examples rather than opinions: "tell me about a time when you had to...". You answer with a real situation, what you did — not what the team did — and how it ended. It is the multinational standard.; See also: Assessment
Assessment: A test within the selection process: technical, language or psychometric. It is usually online and timed. Asking in advance what it involves and how long it takes is reasonable and does not count against you.; See also: Competency-based interview, CEFR levels (A1 to C2)
Background check: The background and reference check some companies run before signing: education, previous jobs and, in some processes, criminal record. It is why the dates and titles on your CV have to be exact.; See also: Work references
Work references: People who can speak to how you work, usually former managers. Tell them before you list them, and mention which role you are applying for, so the call does not catch them cold.; See also: Background check
Hiring manager: The person who will be your manager and makes the final call, as distinct from the recruiter who runs the process. Knowing which of the two you are talking to changes what to ask: process questions for the recruiter, job questions for the hiring manager.; See also: Competency-based interview
Onboarding: The first weeks of induction: paperwork, access, training and introductions. In a multinational it is usually a formal programme lasting several weeks, and it is the window where asking anything is expected rather than awkward.; See also: Período de prueba (probation period)
BELT test: An English-for-business test whose result is reported on the CEFR scale. The BELT test is available on this platform, and the level you obtain is shown on your profile, where the companies you apply to can see it. There is no pass or fail: it measures your level at the time you take it.; See also: CEFR levels (A1 to C2), Assessment