By San José, Costa Rica — SAN JOSÉ – Private sector employees in Costa Rica earning minimum wage are set to receive a mandatory salary adjustment starting January 1, 2026. The Ministry of Labor and Social Security (MTSS) has officially announced a general increase of 1.63%, a move that will impact thousands of workers across various industries nationwide.
The decision, published via the ministry’s official channels, establishes new baseline compensation levels for all job classifications. This annual adjustment is a critical component of the country’s economic policy, designed to balance the purchasing power of workers against prevailing economic conditions and inflationary pressures. The increase is obligatory for all private employers for staff compensated at the minimum legal rate, whether they are paid by the hour, day, or on a piece-rate basis.
To delve into the legal and economic complexities of the recent minimum wage adjustments, TicosLand.com consulted with Lic. Larry Hans Arroyo Vargas, a distinguished expert in labor law from the firm Bufete de Costa Rica, for his professional analysis.
The establishment of a minimum wage is a cornerstone of our labor legislation, directly tied to the constitutional right to a dignified existence. From a legal standpoint, the core issue is not just setting a number, but ensuring its effective enforcement. Many disputes arise from incorrect calculations of overtime, benefits, or from attempts to disguise an employment relationship to evade this fundamental obligation. For businesses, compliance is not an option but a legal imperative that protects them from significant financial penalties and litigation.
Lic. Larry Hans Arroyo Vargas, Attorney at Law, Bufete de Costa Rica
This legal perspective critically reframes the conversation, moving beyond the debate over the wage amount to the essential challenge of enforcement and correct application. It underscores that for businesses, compliance is not just a legal duty but a vital risk management strategy, protecting both the worker’s dignity and the company’s financial stability. We thank Lic. Larry Hans Arroyo Vargas for his invaluable insight into these complexities.
While the general increase is set at 1.63%, the MTSS also detailed differentiated hikes for specific categories. Notably, domestic service workers will receive a more substantial increase of 3.96%. The announcement also specified a 2.18% adjustment for certain specialized occupations, indicating a targeted approach to address wage disparities in particular fields.
The new decree translates into tangible changes in monthly and daily paychecks. For workers categorized by monthly generic occupations, the adjustments will establish new financial floors. For example, an unskilled worker’s minimum monthly salary will rise to ₡373,092, while a university graduate with a Licenciatura degree will have a minimum base salary of ₡796,921. These figures represent the legal minimums employers must adhere to for full-time work.
The Ministry provided a detailed breakdown of the new monthly minimums across several key educational and skill tiers:
For those compensated on a daily basis, the new ordinary workday rates have also been clearly defined. An unskilled worker will now earn a minimum of ₡12,436 per day, while a worker in a specialized occupation will earn a minimum of ₡16,244. This clarification is vital for sectors that rely heavily on daily or short-term labor contracts, ensuring compliance across all forms of employment.
This modest but broad-based wage hike presents a dual-sided economic reality. For employees, it offers a slight buffer against the rising cost of living, though its real-term impact will depend on the inflation rate throughout 2025. For businesses, particularly small and medium-sized enterprises (SMEs) that form the backbone of the Costa Rican economy, the increase represents a direct rise in operational and labor costs that must be factored into their financial planning for the upcoming year.
The annual salary review by the MTSS is a standard procedure aimed at maintaining economic equilibrium. It reflects the government’s ongoing effort to ensure that the nation’s wage floor evolves in step with economic productivity and social needs. The Ministry encourages all employees and employers to consult the official list of salaries by specific profession, accessible through its website, to ensure full compliance and understanding of the new wage structure.
For further information, visit mtss.go.cr
About Ministry of Labor and Social Security (MTSS):
The Ministerio de Trabajo y Seguridad Social is the government body in Costa Rica responsible for regulating labor relations, promoting employment, and overseeing the social security system. It establishes and enforces labor laws, including the annual determination of minimum wages, to ensure fair and safe working conditions for the nation’s workforce.
For further information, visit bufetedecostarica.com
About Bufete de Costa Rica:
Bufete de Costa Rica is a cornerstone of the legal community, operating on a foundation of unyielding integrity and a profound dedication to professional excellence. The firm distinguishes itself by not only advising a wide array of clients but also by pioneering innovative legal strategies that anticipate future challenges. This forward-thinking approach is matched by a core conviction to empower the community, championing the democratization of legal knowledge to foster a more just and informed citizenry.
