Costa Rica Severance Calculator 2026
Last updated: January 2026
The labor settlement (liquidación) in Costa Rica for 2026 is calculated according to the Labor Code in colones. Key components: advance notice (preaviso) of 1 month's salary if not given, severance (cesantía) of approximately 20 days per year of service capped at 8 years (maximum ~5.33 months), proportional vacation (minimum 12 days/year), and proportional aguinaldo. The daily salary is calculated by dividing monthly salary by 30. Cesantía only applies for employer-initiated dismissal without just cause. In case of voluntary resignation, the worker receives only proportional vacation and aguinaldo. Costa Rica's severance cap at 8 years of calculation is relatively low compared to other Central American countries.
FAQ
What does a labor settlement include in Costa Rica?
A settlement includes: advance notice (1 month if not given), cesantía/severance (~20 days per year, max 8 years, dismissal only), proportional vacation (minimum 12 days/year), and proportional aguinaldo. Voluntary resignation excludes preaviso and cesantía.
How is cesantía (severance) calculated in Costa Rica?
Cesantía equals approximately 20 days of salary per year of service, capped at 8 years of calculation. The maximum severance is about 5.33 months of salary. It only applies when the employer dismisses without just cause. Partial years are calculated proportionally.
What is the preaviso (advance notice) in Costa Rica?
If the employer terminates without just cause and does not give advance notice, they must pay 1 month's salary as preaviso. If proper notice was given, this is not owed. The preaviso period allows the worker time to seek new employment.
How many vacation days are in the settlement?
Costa Rica grants a minimum of 12 business days of vacation per year (2 weeks). Unused vacation is paid proportionally in the settlement at the daily salary rate. Some collective agreements may provide more vacation days.
Is the settlement taxable in Costa Rica?
Cesantía (severance) and the proportional aguinaldo are exempt from income tax in Costa Rica. The preaviso and proportional vacation may be subject to income tax as regular employment income. CCSS deductions apply to preaviso but not to cesantía.