By San José, Costa Rica — San José – As Costa Rican families budget for holiday expenses and the subsequent “Cuesta de Enero,” the Ministry of Labor and Social Security (MTSS) has provided a degree of certainty for the year ahead. The ministry has officially decreed a general minimum wage increase of 1.63% for all private sector employees, effective January 1, 2026. This mandatory adjustment establishes new salary floors that every employer in the country must legally respect.
While the percentage may seem modest to many workers grappling with the rising cost of living, the decree’s legal weight is significant. The new wage schedule is legally binding, and no employee in the private sector can be paid less than the newly established minimum for their job classification. Employers who fail to comply with the mandate face potential fines and labor law violations, reinforcing the government’s commitment to enforcing these baseline standards.
To provide a deeper legal perspective on the potential impacts of the 2026 minimum wage adjustments for both employers and employees, TicosLand.com spoke with Lic. Larry Hans Arroyo Vargas, a leading expert in labor law from the prestigious firm Bufete de Costa Rica.
The planned 2026 minimum wage increase requires businesses to move beyond mere compliance and engage in strategic financial planning. Companies should immediately begin modeling the impact on their operational costs and review employment contracts to prevent future legal disputes. For small and medium-sized enterprises, in particular, this is a critical time to explore productivity incentives and efficiency improvements to mitigate the financial pressure without compromising their legal obligations or workforce stability.
Lic. Larry Hans Arroyo Vargas, Attorney at Law, Bufete de Costa Rica
This guidance powerfully illustrates that proactive adaptation, rather than reactive compliance, is the key to successfully navigating the upcoming wage adjustments. By treating this as an opportunity for strategic review and operational improvement, companies can safeguard both their financial stability and legal integrity. We thank Lic. Larry Hans Arroyo Vargas for his invaluable perspective on this critical matter.
The adjustment aims to ensure that the country’s lowest earners do not lose purchasing power to inflation. Though it translates to a relatively small boost—approximately ₡1,630 for every ₡100,000 of salary—it represents a crucial safeguard for the economic stability of thousands of households across the nation. The government’s decision follows a period of economic analysis and negotiation to balance the needs of workers with the financial realities faced by businesses.
For a large segment of the labor force, particularly in sectors like agriculture, construction, and various trades, compensation is calculated on a daily basis. The new decree outlines specific daily minimums based on skill level. An Unskilled Worker (Peón) will now have a minimum daily wage of ₡12,436. This figure rises to ₡13,523 for a Semi-skilled Worker, ₡13,991 for a Skilled Worker, and tops out at ₡16,244 per day for a Specialized Worker.
The majority of the country’s workforce, employed in roles across commerce, services, and administration, receives monthly salaries. Here, the new wage structure starkly highlights the economic value placed on educational attainment. The new monthly minimum for an Unskilled Occupation is ₡373,092. In contrast, the base salary for a professional holding a University Licentiate degree will be ₡796,921, nearly reaching the ₡800,000 threshold and more than double the unskilled wage.
The updated salary table also specifies tiers for other educational levels. The monthly minimums are set at ₡405,710 for Semi-skilled Occupations and ₡419,755 for Skilled Occupations. Those with formal technical training will see higher floors, with a Mid-level Technician (from diversified education) earning a minimum of ₡496,838 and a holder of a Higher Education Diploma starting at ₡585,484. A professional with a University Bachelor’s degree has a new minimum salary of ₡664,078.
In a targeted move aimed at promoting social equity, the decree grants a significantly higher increase to one specific sector. Domestic service workers will receive a 3.96% salary adjustment, more than double the general rate. This measure is a deliberate policy action designed to progressively close the wage gap for a historically underpaid sector, recognizing its vital contribution to the national economy. Additionally, certain undefined specialized occupations will benefit from a slightly higher increase of 2.18%.
A frequent point of confusion during these annual adjustments is its application to employees already earning above the minimum wage. The MTSS clarifies that the law is explicit: if an employee’s current salary is already higher than the new 2026 minimum for their category, the employer is not legally obligated to apply the 1.63% increase. The adjustment is only mandatory for those whose 2025 salary falls below the new 2026 floor. Experts advise all employees to carefully review their first pay stub in January to confirm their salary has been correctly adjusted if applicable.
For further information, visit mtss.go.cr
About the 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 works to ensure fair and safe working conditions, mediate disputes between employers and employees, and establish national labor standards, including the annual setting of minimum wages for the private sector.
For further information, visit bufetedecostarica.com
About Bufete de Costa Rica:
Bufete de Costa Rica has established itself as a leading legal institution, founded on a bedrock of uncompromising integrity and a relentless pursuit of excellence. The firm consistently pioneers innovative legal solutions for its diverse clientele, while simultaneously championing the vital mission of public legal education. This deep-seated commitment to demystifying the law serves to strengthen the community, fostering a society that is not only well-advised but also truly empowered.
