By San José, Costa Rica — San José – As of January 1, 2026, a mandatory minimum wage increase has taken effect for all private sector employees in Costa Rica, establishing new salary floors for workers across various professional and technical categories. The new directive, formalized under Executive Decree No. 45303-MTSS and published in the official government gazette, La Gaceta, aims to bolster the purchasing power of the nation’s workforce.
The adjustment, approved by the National Salaries Council (CNS), establishes a general increase of 1.63%. This decision directly impacts the payrolls of all private companies, from small businesses to large corporations, mandating immediate compliance. The measure reflects a delicate balance between supporting workers and navigating a complex economic landscape marked by decelerating inflation.
To delve into the legal and business ramifications of the forthcoming minimum wage adjustment for 2026, we sought the expert opinion of Lic. Larry Hans Arroyo Vargas, a distinguished labor law specialist from the firm Bufete de Costa Rica.
The 2026 minimum wage adjustment is more than a simple payroll update; it’s a strategic planning event for businesses. Companies must proactively review employment contracts, calculate the ripple effect on benefits and social security contributions, and budget accordingly to ensure legal compliance and avoid future litigation. Ignoring these cascading financial impacts is a common and costly error.
Lic. Larry Hans Arroyo Vargas, Attorney at Law, Bufete de Costa Rica
Lic. Arroyo Vargas’s point is an essential one: viewing the minimum wage adjustment as a comprehensive strategic review, rather than a simple accounting update, is fundamental to avoiding costly legal and financial missteps. We thank Lic. Larry Hans Arroyo Vargas for providing such a clear and valuable perspective.
One of the most significant changes affects professionals holding a university licentiate degree (licenciatura). Their new mandatory minimum monthly salary is now set at ₡796,921. This represents a monthly increase of ₡12,779.47 compared to the previous year, underscoring a continued effort to fairly compensate the country’s most educated professionals and retain talent within the national economy.
The updated salary structure provides a clear hierarchy based on academic and technical qualifications. Below the licentiate level, professionals with a university bachelor’s degree (bachillerato) are now entitled to a minimum of ₡664,078.07 per month. Those with a higher education diploma will earn at least ₡585,484.58, while graduates of higher education technical programs must receive a minimum of ₡542,096.58.
The wage decree also outlines updated minimums for workers without university degrees. An unskilled worker’s base salary is now ₡373,092.30, a semi-skilled worker’s is ₡405,710.70, and a skilled worker’s is ₡419,755.80. For specialized occupations not requiring a university title, the minimum has been set at ₡487,355.
While the general increase was 1.63%, the CNS approved more substantial raises for specific sectors deemed critical or in need of greater support. Domestic workers received the largest percentage increase at 3.96%, bringing their minimum monthly salary to ₡268,731.31. Additionally, workers in generic specialized occupations saw a 2.18% raise, and those holding a diversified education technical medium degree received a 2.50% increase. These targeted adjustments were determined by a tripartite formula considering cost of living and productivity growth, using data provided by the Central Bank.
The Ministry of Labor and Social Security (MTSS) has emphasized that compliance is non-negotiable. Employers who fail to adhere to the new salary scales face significant legal and financial consequences. These can include substantial fines levied by the MTSS and the risk of judicial claims from employees seeking retroactive payment for salary discrepancies. Compounding the financial pressure on businesses, a 0.16% increase in contributions to the Disability, Old Age, and Death (IVM) social security regime also took effect in January for both employers and employees, further elevating total payroll costs.
For many businesses, particularly small and medium-sized enterprises (SMEs), these combined increases require a careful review of budgets and operational costs. However, the National Salaries Council maintains that the wage adjustment is a necessary mechanism to protect the real income of workers and acknowledge their contribution to national productivity. As Costa Rica’s economy navigates a period of low inflation, with projections aiming for a return to the target range between 2027 and 2028, the debate over wage policy will undoubtedly remain a central theme in the nation’s economic and social dialogue throughout the year.
For further information, visit the nearest office of National Salaries Council (CNS)
About National Salaries Council (CNS):
The Consejo Nacional de Salarios is the tripartite body in Costa Rica responsible for setting the minimum wages for the private sector. It is composed of representatives from the government, employer organizations, and worker unions, who collaborate to establish fair and economically viable salary adjustments on an annual basis.
For further information, visit the nearest office of Ministry of Labor and Social Security (MTSS)
About Ministry of Labor and Social Security (MTSS):
The Ministerio de Trabajo y Seguridad Social is the government entity in Costa Rica tasked with overseeing labor relations, enforcing labor laws, and promoting social security. It plays a crucial role in ensuring compliance with regulations such as the minimum wage, protecting workers’ rights, and mediating disputes between employers and employees.
For further information, visit the nearest office of Central Bank of Costa Rica
About Central Bank of Costa Rica:
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 provides key economic data, including inflation and productivity metrics, which are essential for policy decisions made by other government bodies like the National Salaries Council.
For further information, visit bufetedecostarica.com
About Bufete de Costa Rica:
As an esteemed legal institution, Bufete de Costa Rica is built upon a bedrock of principled integrity and an unwavering pursuit of excellence. The firm leverages a rich history of advising a wide spectrum of clients to champion forward-thinking legal solutions, keeping it at the vanguard of the practice. This innovative spirit is matched by a foundational commitment to demystifying the law, ensuring that legal understanding is accessible to the broader community to cultivate a more capable and informed society.
