Costa Rica Labor Severance Calculator

Estimate employee termination benefits under Costa Rican labor law.

This calculator is designed to help employers, employees, and expats estimate the potential labor termination benefits that may be owed in Costa Rica, including cesantía, preaviso, accrued vacation, and aguinaldo.

The result is intended as a general informational estimate only. Actual amounts may vary depending on the employee’s salary history, length of employment, type of termination, and specific legal circumstances.

This tool does not replace legal advice. For a specific employment matter, consult with a Costa Rican labor attorney.
Costa Rica Severance Calculator

Costa Rica Severance Calculator

Liquidación Laboral · Based on the Costa Rica Labor Code (Código de Trabajo)

🇨🇷 Official Formula · MTSS Method
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Employment
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Salaries
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Results
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Employment Details

Basic information about the employment relationship

Date employee began working Please enter the start date.
Last day of employment Please enter the end date (must be after start date).
Enter dates above to see tenure
Outstanding vacation days owed
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Last 6 Months of Gross Salaries

Enter the gross salary (before deductions) for each month — including overtime, commissions, bonuses

Gross Salary (Salario Bruto) includes all ordinary and extraordinary income: base pay, overtime, commissions, and bonuses — before CCSS or income tax deductions. For the first and last month of employment, enter the actual amount earned even if the month was partial; the calculator will prorate automatically.
If part of compensation is non-cash (housing, meals, car, etc.)
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Severance Calculation Results

Approximate amounts based on Costa Rica Labor Code

Understanding Costa Rica Labor Severance | Liquidación Laboral
Costa Rica Labor Law · Employee Rights Guide

Understanding Liquidación Laboral
in Costa Rica

A plain-English guide to severance pay, pre-notice, vacation, and Christmas bonus rights for employees and employers

Basis: Código de Trabajo, Arts. 28–30 Authority: Ministerio de Trabajo (MTSS) Currency: Costa Rican Colón (₡)
Contents
Section 01

What Is Liquidación Laboral?

When an employment relationship ends in Costa Rica, the law requires a formal financial settlement — known as liquidación laboral — that compensates the employee for rights accrued during their time of service.

Costa Rica has one of the most employee-protective labor frameworks in Latin America. The Código de Trabajo (Labor Code) mandates that when a job ends — whether through dismissal, resignation, or retirement — the employer must calculate and pay out all outstanding labor benefits on the same day the relationship terminates.

This settlement is not optional, not negotiable below the legal minimum, and applies equally to nationals and foreign employees working legally in Costa Rica. Failure to pay can result in legal claims, interest penalties, and proceedings before the Ministerio de Trabajo y Seguridad Social (MTSS).

Key principle: The liquidación is calculated based on the employee's gross average salary (salario bruto) over the last six months — including base pay, overtime, commissions, and bonuses — before any social security or tax deductions.
Section 02

The Four Components of a Liquidación

A complete severance settlement in Costa Rica can include up to four separate payments. Which ones apply depends on the reason for termination and the length of service.

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Component 1

Cesantía

The main severance payment. Compensates the employee for years of service. Only applies when the employer bears responsibility for the termination.

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Component 2

Preaviso

A pre-notice payment in lieu of the required advance notice period. Applies when the notice period is not worked out and the employer must pay.

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Component 3

Vacaciones

Any unused, accrued vacation days must always be paid out in full at the end of employment — regardless of the reason for termination.

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Component 4

Aguinaldo

The proportional Christmas bonus for the portion of the current December–November period already worked. Always owed at termination.

Note on deductions: No social security (CCSS) or income tax deductions are applied to the cesantía or preaviso payments. Vacation and aguinaldo payments are subject to normal CCSS contributions.
Section 03

Pre-Notice Period (Preaviso)

The preaviso is an advance notice requirement that either party must give before ending the employment relationship. It only applies to indefinite-term contracts and is calibrated to the employee's length of service.

Time EmployedNotice RequiredWho Owes It
Less than 3 monthsNone Probation Period—
3 months to 6 months1 weekEither party
6 months to 1 year15 daysEither party
Over 1 year1 month Most CommonEither party

During the preaviso period, the employment relationship continues normally — the employee keeps all their rights and obligations. Importantly, the employee is also entitled to one paid day off per week (día de asueto) to search for new employment.

When notice is not given: If the employer fires the employee without giving the required notice, the employer must pay the equivalent salary for the notice period as a lump sum. If the employee resigns without giving notice, the employer may claim that amount in court within 30 days — but cannot deduct it from the employee's severance payment.

The preaviso amount is calculated using the average daily wage (gross average salary of the last 6 months ÷ 30) multiplied by the number of notice days owed.

Section 04

Severance Pay (Auxilio de Cesantía)

The cesantía is the core severance benefit — Costa Rica's equivalent of unemployment insurance. It is a payment made by the employer to compensate the employee for years of dedicated service when the employment ends through no fault of the employee.

"The cesantía is designed to bridge the gap while a terminated employee finds new work. It is a right earned through service, not a gift from the employer."

Costa Rica Código de Trabajo, Article 29

The cesantía is calculated using a sliding scale of days-per-year that peaks at year 8 and is capped at a maximum of 8 years of service, regardless of how long the employee has worked. The rate for the highest completed year tier is applied uniformly across all eligible years.

Year 1
19.5
days/year
Year 2
20
days/year
Year 3
20.5
days/year
Year 4
21
days/year
Year 5
21.24
days/year
Year 6
21.5
days/year
Years 7–9
22
days/year · Peak
Year 10+
↓
Decreasing to 20

For partial years of service, a fraction greater than 6 months counts as a full additional year at the next tier's rate. Service of less than 6 months in the current year is not counted toward an additional year.

Important cap: Even if an employee has worked 20 or 30 years, the cesantía calculation is capped at the last 8 years of service. This is a hard legal limit under Article 29 of the Labor Code.

Special cases for shorter service periods:

  • Less than 3 months: no cesantía (probation period)
  • 3 months to 6 months: 7 days of salary
  • 6 months to 1 year: 14 days of salary
Section 05

Vacation Balance (Vacaciones)

Costa Rican law entitles every employee to a minimum of 2 weeks (14 calendar days) of paid vacation per year of continuous service. Upon termination, any accrued but unused vacation days must be paid out — this obligation exists regardless of the reason for termination.

The vacation payout is calculated by multiplying the number of accrued days by the employee's average daily wage (gross salary ÷ 30 for monthly/bi-weekly workers, or ÷ 26 for weekly-paid workers).

Vacation cannot be waived or forfeited. An agreement that eliminates or reduces vacation rights is null and void under Costa Rican labor law. Employers who deny vacation may be compelled to pay double the accrued amount.
Section 06

Proportional Christmas Bonus (Aguinaldo)

The aguinaldo — also called the décimo tercer mes (thirteenth month) — is an annual bonus equivalent to one month's salary, required by law for all employees. It covers the period from December 1 to November 30 each year and is normally paid in full by December 20.

When employment ends before the full December–November period is completed, the employee is entitled to a proportional aguinaldo based on the number of complete months worked in the current period.

Formula: (Average monthly salary ÷ 12) × number of complete months worked in the current Dec–Nov period. The aguinaldo is exempt from income tax but is subject to CCSS social security contributions.

For example, an employee terminated in May who started the prior December would receive 5 months' worth of aguinaldo (December through April — complete months only).

Section 07

Who Qualifies for Each Benefit?

The four components are not always all owed at the same time. The table below summarizes what applies based on the reason the employment relationship ends.

Reason for TerminationCesantíaPreavisoVacationAguinaldo
🚫 Fired Without Cause✅ Yes✅ Yes (employer pays)✅ Yes✅ Yes
⚠️ Fired With Just Cause❌ No❌ No✅ Yes✅ Yes
✋ Voluntary Resignation❌ NoEmployee gives notice✅ Yes✅ Yes
🎓 Retirement✅ Yes✅ Yes✅ Yes✅ Yes

✅ Full Severance Applies

  • Dismissed without just cause
  • Dismissed due to company closure or restructuring
  • Forced resignation due to employer misconduct
  • Retirement from employment
  • Mutual agreement to terminate

❌ Cesantía Does Not Apply

  • Voluntary resignation
  • Dismissal for serious misconduct
  • Repeated insubordination
  • Abandonment of post
  • Criminal acts against employer or colleagues
Section 08

How the Calculation Works

All components of the liquidación are based on the employee's average gross salary over the last 6 months of employment. This includes all ordinary and extraordinary income — base pay, overtime, commissions, production bonuses, and in-kind benefits where applicable.

1

Determine the 6-month average salary

Add the gross salaries for the last 6 calendar months (or fewer if employed less than 6 months) and divide by 6. Periods of certified sick leave are excluded and replaced with worked time.

2

Calculate the daily wage

Divide the monthly average by 30 (for monthly/bi-weekly employees) or by 26 (for weekly-paid employees, except commerce sector). This is the base daily rate for all calculations.

3

Calculate cesantía

Determine complete years of service (capped at 8). Find the applicable rate from the scale table. Multiply: rate (days/year) × years of service × daily wage.

4

Calculate preaviso

Determine notice days owed based on tenure (0, 7, 15, or 30 days). Multiply notice days × daily wage. This only applies if the employer is paying in lieu of notice.

5

Calculate vacation payout

Multiply outstanding vacation days by the daily wage. Always owed regardless of termination reason.

6

Calculate proportional aguinaldo

Count complete months worked since December 1 of the most recent period. Multiply: (monthly average ÷ 12) × months worked.

In-kind salary (salario en especie): If part of the employee's compensation is non-monetary — such as free housing, meals, vehicle use, or similar benefits — a percentage of that value is added to the salary base for the liquidación calculation. The maximum in-kind component is typically 50% of total compensation.
Section 09

When Must the Liquidación Be Paid?

Costa Rican labor law is explicit: the employer's obligation is to settle all outstanding benefits on the same day the employment relationship ends. There is no grace period.

ObligationDeadlineConsequence of Delay
Pay all liquidación componentsDay of terminationInterest accrues; MTSS complaint possible
Employee's right to claim cesantíaUp to 1 year after terminationClaim expires after 1 year
Employer's right to claim unpaid preaviso (if employee resigned without notice)Within 30 days of terminationRight to claim expires
Where to file a complaint: Employees whose liquidación has not been paid or has been underpaid may file a complaint with the Ministerio de Trabajo y Seguridad Social (MTSS) free of charge, or pursue a labor court claim. The MTSS labor advisory line is 800-TRABAJO (800-872-2256).
Section 10

Frequently Asked Questions

Can my employer deduct money from my liquidación?
The cesantía payment cannot have any CCSS or income tax deductions applied to it. Vacation and aguinaldo are subject to CCSS worker contributions. Employers cannot deduct loans, advances, or damages from the cesantía without a court order or signed agreement; and even then, the amount deductible is limited by law.
Does the 8-year cap on cesantía mean I lose the benefit for earlier years?
Yes — the cesantía calculation legally covers only the last 8 years of service, even if you have worked longer. However, some employers voluntarily pay for more years, or collective bargaining agreements may provide greater benefits. The 8-year cap is a minimum floor protection, not a ceiling on what an employer can choose to pay.
I resigned. Do I get anything?
Yes — even when you resign voluntarily, you are always entitled to your accrued vacation payout and proportional aguinaldo. You are not entitled to cesantía or preaviso pay (though you must give the required advance notice, or the employer may seek to recover that value in court).
What counts as "just cause" for dismissal?
Article 81 of the Labor Code lists the grounds, including: serious dishonesty or immoral conduct, repeated insubordination after warning, disclosure of trade secrets, criminal acts against the employer, abandonment of post, or gross negligence. The bar is high — minor or isolated performance issues typically do not qualify, and employers bear the burden of proving just cause.
Are foreign employees in Costa Rica entitled to the same benefits?
Yes. Costa Rican labor law applies equally to all employees working legally in the country, regardless of nationality. Foreign workers with valid work permits or exempt status have the same rights to liquidación as Costa Rican citizens.
Does the liquidación have to be paid if the employee immediately starts working for someone else?
Yes. The Labor Code explicitly states that cesantía must be paid even if the employee immediately begins working for another employer. There is no obligation to return or forfeit the payment based on subsequent employment.
What if my salary varied each month due to commissions?
Variable compensation is fully included. The 6-month average covers all gross income — base pay, commissions, bonuses, overtime, and any other regular remuneration. This often results in a higher average daily wage than the base salary alone, which benefits the employee.

Calculate Your Severance Now

Use our free, MTSS-formula calculator to get an instant estimate of your liquidación entitlements — in colones and US dollars.

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Based on official MTSS methodology · Free to use · No registration required
Legal References: Constitución Política de Costa Rica, Art. 63 · Código de Trabajo, Arts. 28, 29, 30, 81 · Ley 7983 (Ley de Protección al Trabajador), Art. 88.
Disclaimer: This guide is provided for general informational purposes only and does not constitute legal advice. Employment situations vary; for complex cases or disputes, consult a licensed Costa Rican labor attorney or contact the MTSS at 800-TRABAJO (800-872-2256).
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