Countries › Costa Rica › Guide › 15. Exiting › Closing a business in Costa Rica and the workforce: notice, cesantía up to eight years, vacations and aguinaldo, and the labor privilege in liquidation

Closing a business in Costa Rica and the workforce: notice, cesantía up to eight years, vacations and aguinaldo, and the labor privilege in liquidation

Last verified: 2026-10-30 · Status: Stable

Notice and severance (cesantía) are owed when the employer liquidates or closes, voluntarily or not, because closure ends contracts without fault of the worker. Notice is one week to one month by seniority, cesantía runs from seven days to about 22 days per year capped at the last eight years, and unused vacations and proportional aguinaldo are paid on exit. Worker claims rank ahead of all creditors except mortgages, pledges and support claims and must be paid within 30 days of formal recognition.

USD figures use the Banco Central de Costa Rica reference selling rate of ₡454.82 per US dollar published for 29 October 2026 (indicator 318 on bccr.fi.cr), rounded to the cent. The salario base for 2026 is ₡462,200 (Circular 246-2025 of the Consejo Superior del Poder Judicial, under Ley 7337 art. 2).

Key facts

Cesantía cap	8 yearsCódigo de Trabajo art. 29, as of 2026-10-30 · in force
Maximum statutory notice	1 monthCódigo de Trabajo art. 28, as of 2026-10-30 · in force
Severance due on employer closure	Yes Código de Trabajo art. 33, as of 2026-10-30 · in force
Payment of recognised worker credits in liquidation	30 daysCódigo de Trabajo art. 33, as of 2026-10-30 · in force

The rule

1. Notice and cesantía indemnities also apply when the employer liquidates or ceases business, voluntarily or not; in insolvency, liquidation, attachment or similar cases, worker credits have a special privilege over all other creditors except mortgage, pledge and support creditors, and must be paid within 30 days of formal recognition or when funds exist.Ley 2, Código de Trabajo, as amended by Ley 9957, art. 33, 2021-04-14 official text · verified 2026-10-30

2. Insolvency, bankruptcy, judicial or extrajudicial liquidation, force majeure or the employer's own will end contracts without liability for the worker and without extinguishing the worker's right to indemnities, where they necessarily and directly cause closure or definitive cessation of work.Ley 2, Código de Trabajo, art. 85(c) and (d), 1943-08-27 official text · verified 2026-10-30

3. Notice for indefinite contracts: one week after three to six months of work, 15 days after six months to one year, one month after one year; it may be replaced by paying the equivalent salary, and during notice the employer grants one day off a week to look for work.Ley 2, Código de Trabajo, art. 28, 1943-08-27 official text · verified 2026-10-30

4. Cesantía: seven days' salary for three to six months, 14 days for six months to one year, then a scale per year of service from 19.5 days in year one rising to 22 days in years seven to nine and falling to 20 days from year thirteen, never covering more than the last eight years; it is due even if the worker immediately joins another employer.
Example: Worker with ten years and an average salary of ₡900,000 a month (₡30,000 a day on a 30 day basis): the table gives 21.5 days per year for year ten, capped at eight years, so 172 days or ₡5,160,000, plus one month's notice of ₡900,000. / US$11,345.15 cesantía plus US$1,978.80 notice.Ley 2, Código de Trabajo, as amended by Ley 7983, art. 29, 2000-02-16 official text · verified 2026-10-30

5. Indemnities are calculated on the average salary of the last six months, cannot be offset, sold or assigned, and cannot be attached except half for support; continuity is not broken by illness, vacation or legal strike.Ley 2, Código de Trabajo, art. 30, 1943-08-27 official text · verified 2026-10-30

6. A worker who leaves for any reason is paid the unused vacation in cash; with under 50 weeks, at least one day of vacation per month worked is paid on leaving.Ley 2, Código de Trabajo, as amended by Ley 7989, art. 153 and art. 156(a), 2000-02-16 official text · verified 2026-10-30

7. Workers whose contract has not completed the year, for any reason, are owed aguinaldo proportional to time served if they worked at least one month; aguinaldo enjoys the same privileges and protections as dismissal indemnities.Ley 2412, art. 3 and art. 4, 1959-10-23 official text · verified 2026-10-30

8. Pregnant and breastfeeding workers and those on the leaves in art. 95 cannot be dismissed except for serious misconduct proven before the labor inspection.Ley 2, Código de Trabajo, art. 94, 1943-08-27 official text · verified 2026-10-30

9. A change of employer through a sale of the business keeps contracts alive; the former employer is jointly liable for six months for obligations arising before the substitution.Ley 2, Código de Trabajo, art. 37, 1943-08-27 official text · verified 2026-10-30

Worked example

A 40 person plant closes. For each worker, payroll computes notice (or pay in lieu), cesantía on the six month average salary, unused vacations and proportional aguinaldo; a ten year worker on ₡900,000 a month receives ₡6,060,000 (US$13,323.95) in notice and cesantía before vacations and aguinaldo.

Step by step

Map seniority, six month averages, vacation balances and aguinaldo accruals.
Give written notice or pay in lieu (art. 28).
Pay cesantía, vacations and proportional aguinaldo at exit.
Handle protected workers (art. 94) separately.
Keep CCSS current until the last payroll so registry filings are accepted.

Common traps

Closure does not avoid cesantía; art. 33 applies it expressly.
Fixed term contracts ended early follow art. 31, with damages and a minimum extra indemnity.
Worker credits outrank unsecured creditors, so distributions to shareholders before paying them expose liquidators.

Sources

← Closing a branch of a foreign company in Costa Rica: the general power of attorney, final remittance tax and the tax on legal entities until cancellationClosing with Hacienda, the CCSS and the Registro Nacional: deregistration in one month, the clearances that block filings, and four or ten years of exposure →

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