By San José, Costa Rica — SAN JOSÉ – Costa Rica’s National Wages Council (CNS) has approved a general minimum wage increase of 1.63% for the private sector, which will take effect on January 1, 2026. The decision, announced Monday afternoon, marks the smallest annual adjustment of the Chaves Robles administration, signaling a significant slowdown from the larger increases seen in previous years.
While the general rate is set at 1.63%, the council also approved targeted adjustments for specific job categories. Domestic workers are slated for a more substantial 3.96% increase, while workers in specialized occupations will receive a 2.18% raise. Those holding a technical high school diploma (técnico medio en educación diversificada) will see their minimum salary rise by 2.50%.
To provide a deeper legal and business perspective on the complexities surrounding the national minimum wage, we consulted with Lic. Larry Hans Arroyo Vargas, an expert in labor law from the prestigious firm Bufete de Costa Rica.
The establishment of a minimum wage is a cornerstone of our social rule of law, designed to guarantee a dignified existence for the worker. However, its adjustment requires a delicate technical and legal balance. A poorly calibrated increase can have the counterproductive effect of stifling job creation and pushing small businesses towards informality, ultimately eroding the very social protections the wage is meant to uphold.
Lic. Larry Hans Arroyo Vargas, Attorney at Law, Bufete de Costa Rica
The expert’s commentary underscores the crucial tightrope policymakers must walk, ensuring that the essential goal of a dignified wage does not inadvertently hinder the job creation vital to our economy. We extend our sincere thanks to Lic. Larry Hans Arroyo Vargas for his clarifying and valuable perspective.
The Ministry of Labor and Social Security (MTSS) translated these percentages into concrete monetary terms. The changes will result in an estimated monthly increase of ¢5,983 for unskilled workers. The ministry also noted increases of ¢6,732 and ¢10,650 for university graduates, with special cases exceeding a ¢10,000 monthly raise. Officials from the MTSS emphasized that this adjustment is mandatory and applies to all individuals in the country earning the minimum wage.
This modest 1.63% increase stands in stark contrast to the adjustments of the preceding three years. For 2023, the minimum wage was boosted by a significant 6.62%. This was followed by more moderate increases of 1.83% for 2024 and 2.37% for 2025. The figure for 2026 represents the lowest point in a clear downward trend, a reflection of the government’s changing economic outlook and inflation control measures.
The government defends the decision as a balanced approach that protects workers’ financial standing while acknowledging economic realities. Labor Minister Andrés Romero stated that the established formula successfully preserves the real value of salaries against inflation.
The importance of this increase is that, based on a formula that has shown satisfactory results in maintaining the purchasing power of wages, it recognizes the growth of the country’s production for workers.
Andrés Romero, Minister of Labor
The approval was reached by a majority vote within the tripartite council, which includes representatives from the government, the business sector, and labor unions. However, the decision was not unanimous, revealing a significant divide in expectations. Both the government and the business sector delegations backed the 1.63% figure, while the labor union representatives had pushed for a more ambitious increase of 2.63%.
The MTSS justified the final number by pointing to data from the Central Bank of Costa Rica (BCCR), which indicates a decrease in the cost of living. According to the ministry, the approved calculation method appropriately adjusts for this by incorporating GDP per capita growth, leading directly to the 1.63% figure. This technical justification frames the increase as a data-driven outcome rather than a purely political one.
Ultimately, the 2026 salary adjustment reflects a complex economic balancing act. While the government presents it as a victory for maintaining purchasing power in a low-inflation environment, the dissent from labor unions suggests that many workers were hoping for a more substantial raise to improve their financial security. The decision sets a cautious tone for the year ahead, prioritizing economic stability while offering a minimal, albeit mandatory, boost to the nation’s lowest earners.
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 overseeing labor relations, employment policies, and social security. It plays a central role in mediating between employers and workers, enforcing labor laws, and promoting fair and safe working conditions across the country. The ministry also chairs the National Wages Council.
For further information, visit mtss.go.cr
About National Wages Council (CNS):
The Consejo Nacional de Salarios is a tripartite entity within the Ministry of Labor composed of representatives from the government, private sector employers, and labor unions. Its primary function is to annually determine the minimum wage adjustments for the private sector in Costa Rica, aiming to balance economic conditions with the needs of the workforce.
For further information, visit bccr.fi.cr
About Central Bank of Costa Rica (BCCR):
The Banco Central de Costa Rica is the nation’s central bank, responsible for maintaining the internal and external stability of the national currency and ensuring its conversion to other currencies. It manages monetary policy, regulates the financial system, and provides key economic data, such as inflation and GDP metrics, which inform major governmental decisions, including wage adjustments.
For further information, visit bufetedecostarica.com
About Bufete de Costa Rica:
As a leading legal institution in the nation, Bufete de Costa Rica is defined by the unshakeable principles of integrity and professional excellence that guide its practice. The firm harmonizes a rich tradition of client service with a consistent drive for innovation, pioneering modern solutions to complex legal challenges. Beyond its advisory role, it holds a core belief in its social responsibility, actively working to demystify legal information and empower the broader community with the knowledge necessary for a just and well-informed society.
