Social security tax
In Costa Rica, the Social Security Rate is a tax related with labor income charged to both companies and employees. Revenues from the Social Security Rate are an important source of income for the government of Costa Rica because they help to pay for many social programs including welfare, health care and many other benefits.
Social security pay is paid between the employer and the employee. The division is usually done as follows:
- Employees pay 10.5% of wages
- Employers pay 26.5% of their employees’ wages.
This payment is made once a month to the Caja Costarricense de Seguro Social, the Instituto Nacional de Seguros (National Insurance Institute) and to various pension funds. In doing so, the employer must deduct the percentage that varies from employee to employee and add it to his payment at the end of the month.