Every company with employees in Costa Rica has responsibilities to the Costa Rican Social Security Fund, as its acronym in Spanish is CCSS.

These obligations are part of the company's regular compliance requirements and ensure employees are properly insured and have access to social security benefits.

Timely compliance with registration, salary reporting, payroll submission, and contribution payments also helps prevent surcharges, adjustments, and potential requests for information from the CCSS.

¿Why is it important to properly comply with the CCSS?

Keeping employer obligations up to date allows the company to:

• Guarantee the proper insurance coverage of employees.
• Keep the company's and its employees' information up to date.
• Avoid discrepancies in reported salaries.
• Reduce the risk of surcharges, interest, and subsequent adjustments.
• Facilitate procedures and dealings before the CCSS.
• Maintain adequate control over labor and social security obligations.

¿What are the employer's main obligations?

1. Register as an employer with the CCSS

When a company begins an activity involving employment relationships, it must complete its employer registration with the CCSS.

Pursuant to the Health Insurance Regulations, the employer must register with the Fund within the first eight business days following the commencement of the activity or the acquisition of the company or business.

¿How can inconveniences be prevented?

• Complete the registration promptly.
• Keep the company's information up to date.
• Report relevant changes, such as modifications to the legal representation, business activity, or address.

2. Properly Register Employees

The employer must ensure that its employees' information is properly registered with the CCSS.

This entails managing registrations and terminations, as well as the corresponding changes throughout the employment relationship.

¿How can inconveniences be prevented?

• Timely registration of new hires.
• Verify each employee's identification information.
• Properly record employee terminations.
• Keep supporting documentation of the changes made.

3. Properly report salaries

One of the most important aspects is properly reporting the remuneration paid to employees.

The CCSS states that the employer must report in the payroll the payments made to the employee during the month, regardless of whether the payment frequency is monthly, biweekly, or weekly.

¿How can inconveniences be prevented?

• Reconcile payroll with the CCSS payroll report before submitting it.
• Review salary changes, overtime, and other payments.
• Verify changes that may affect the reported salary.
• Retain supporting payroll and payment documentation.

4. Submit the payroll report monthly

The payroll report must be processed monthly, incorporating the appropriate changes for the period.

Currently, the CCSS establishes that the regular process through the Virtual Office runs from the 26th day of each month through the fourth business day of the following month.

During this process, changes such as registrations, terminations, medical leave, leave of absence, and salary modifications must be recorded.

Failure to submit the payroll report on time may result in surcharges and in the month’s changes not being properly recorded.

5. Withhold and pay the corresponding contributions

The employer must deduct the employee's contribution and remit it to the CCSS, together with the employer's contribution.

This obligation is outlined in Article 30 of the Constitutive Law of the CCSS.

Payment must be made within the established deadlines. Once the applicable deadline has passed, interest and surcharges may be generated.

¿What can happen if the company fails to comply?

Failure to comply with employer obligations may result in different consequences depending on the circumstances.

These may include:

• Surcharges for late submission or failure to submit payroll reports.
• Interest in payments made after the applicable deadline.
• The need to make payroll adjustments.
• Differences in employees' salary records.
• Requests for information or reviews by the CCSS.

For example, the CCSS indicates that failure to submit the payroll report may result in surcharges and that monthly changes affecting employees may not be recorded, thereby necessitating a subsequent payroll adjustment.

Best Practices

Some simple actions can help maintain proper compliance:

• Establish a monthly calendar for payroll processing.
• Timely record of new hires and terminations.
• Compare payroll with the information to be reported to the CCSS.
• Review salaries, medical leave, leaves of absence, and other changes before billing the payroll.
• Verify that payments are made within the applicable deadlines.
• Keep employer information up to date.
• Retain supporting documentation for payroll reports, payment receipts, and changes made.
• Periodically review the employer account statement to identify potential discrepancies.

Legal Basis

• Political Constitution of Costa Rica, Article 73.
• Constitutive Law of the Costa Rican Social Security Fund.
• CCSS Health Insurance Regulations.
• Invalidity, Old Age and Death Insurance Regulations.
• Labor Code of Costa Rica.

See:

Founding Law

labor code

Constitution

The content of this newsletter is merely informative, that´s why it cannot be used under any circumstances as advice on the matter described in it. If you need advice on any of the aspects discussed, our team of professionals will be willing to assist you. contacto@jadelrio.com