Countries › Costa Rica › Guide › 7. Labor and employment › Termination and severance in Costa Rica: notice up to one month, cesantía of 19.5 to 22 days a year capped at eight years, and the dismissal letter

Termination and severance in Costa Rica: notice up to one month, cesantía of 19.5 to 22 days a year capped at eight years, and the dismissal letter

Last verified: 2026-10-29 · Status: Stable

An employer in Costa Rica can end an indefinite contract without cause by giving notice (one week to one month) and paying cesantía, which is 7 or 14 days for the first year and then 19.5 to 22 days of salary per year, counting only the last eight years. Dismissal for one of the serious causes listed in the Código de Trabajo costs no notice or cesantía, but the employer must hand over a detailed dismissal letter and act within one month of learning the facts. Untaken vacation and the proportional aguinaldo are owed in every case.

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. Fines use the 2026 salario base of ₡462,200 (Circular 246-2025 of the Consejo Superior del Poder Judicial, under Ley 7337 art. 2).

Key facts

Minimum notice (3 to 6 months of service)	7 daysCódigo de Trabajo art. 28, as of 2026-10-29 · in force
Notice after one year of service	30 daysCódigo de Trabajo art. 28, as of 2026-10-29 · in force
Cesantía days per year, peak rate (7 to 9 years)	22 daysCódigo de Trabajo art. 29, as of 2026-10-29 · in force
Maximum years counted for cesantía	8 yearsCódigo de Trabajo art. 29(4), as of 2026-10-29 · in force
Prescription of worker claims after termination	1 yearsCódigo de Trabajo art. 413, as of 2026-10-29 · in force
Employer window to dismiss or discipline	1 monthsCódigo de Trabajo art. 414, as of 2026-10-29 · in force

The rule

1. Either party can end an indefinite contract without cause with written notice of at least one week after three to six months, fifteen days after six months to one year, and one month after one year; notice can be replaced by paying the equivalent salary, and during notice the worker has one day off a week to look for work.Ley 2, Código de Trabajo, art. 28, 1943-08-27 official text · verified 2026-10-29

2. On unjustified dismissal, or a resignation for employer fault under art. 83, the employer pays cesantía: seven days' salary after three to six months, fourteen days after six months to one year, and above one year the days per year in the table (19.5 for one year, 20 for two, 20.5 for three, 21 for four, 21.24 for five, 21.5 for six, 22 for seven to nine, 21.5 for ten, 21 for eleven, 20.5 for twelve, 20 for thirteen or more); only the last eight years count, and it is owed even if the worker immediately takes another job.
Example: Five years at an average of ₡1,500,000 a month (daily ₡50,000): 21.24 x 5 = 106.2 days, ₡5,310,000, plus one month notice ₡1,500,000. / Cesantía about US$11,674.95, notice about US$3,298.01.Ley 2, Código de Trabajo, as reformed by Ley 7983, art. 29, 2000-02-16 official text · verified 2026-10-29

3. Notice and cesantía are calculated on the average salary of the last six months, cannot be offset, sold or assigned, and can be garnished only up to half for child support; illness, vacation and legal strikes do not break continuity, and clauses that interrupt continuity are void.Ley 2, Código de Trabajo, art. 30, 1943-08-27 official text · verified 2026-10-29

4. Just causes for dismissal without liability include immoral conduct, insults or violence against the employer or colleagues, crimes against the employer's property or intentional damage, revealing secrets, serious negligence endangering safety, absence without cause for two consecutive days or more than two days in a month, refusal to follow safety or work instructions, misrepresenting qualifications, a final prison sentence, and any other serious breach.Ley 2, Código de Trabajo, art. 81, 1943-08-27 official text · verified 2026-10-29

5. An employer that dismisses for a just cause owes no notice or cesantía; if the cause is not proven in court it pays notice, cesantía and, as damages, the salaries the worker would have earned until the judgment should have become final.Ley 2, Código de Trabajo, as reformed by Ley 668, art. 82, 1946-08-14 official text · verified 2026-10-29

6. A dismissal for misconduct requires a dismissal letter describing the facts precisely, delivered personally at the time of dismissal; if the worker refuses it, the employer files it with the local MTSS office within ten calendar days. Only the facts in the letter can be argued in court.Ley 2, Código de Trabajo, as reformed by Ley 9343, art. 35, 2016-01-25 official text · verified 2026-10-29

7. The employer's right to dismiss with cause or to discipline expires one month after the cause arose or became known; workers' claims expire one year after the contract ends, and the period does not run while the worker keeps working for the same employer.Ley 2, Código de Trabajo, as reformed by Ley 9343, art. 413 and art. 414, 2016-01-25 official text · verified 2026-10-29

8. The worker can resign with employer liability (and claim cesantía) for causes including unpaid salary, insults or violence by the employer, serious safety risks, breach of art. 70 prohibitions and any other serious breach.Ley 2, Código de Trabajo, as reformed by Ley 9797, art. 83, 2019-12-02 official text · verified 2026-10-29

9. Death of the worker, force majeure, insolvency or death of the employer that closes the business, the employer's own will, and retirement on a CCSS or other pension end the contract without loss of the worker's rights to benefits; fixed term expiry and mutual agreement end it without liability for either party.Ley 2, Código de Trabajo, art. 85 and art. 86, 2022-03-30 official text · verified 2026-10-29

10. Where the employer contributes to a solidarista association, its contributions are held as a reserve for cesantía; on dismissal without cause the worker takes the accumulated employer contribution and the employer pays any shortfall against the legal cesantía.Ley 6970, Ley de Asociaciones Solidaristas, art. 18(b) and art. 21, 1984-11-07 official text · verified 2026-10-29

11. On termination for any cause, the worker withdraws the full balance of the labour capitalisation fund (1.5% of monthly salary paid by the employer) from the authorised operator within fifteen days.Ley 7983, Ley de Protección al Trabajador, art. 3 and art. 6(a), 2020-10-05 official text · verified 2026-10-29

Years of service	Notice	Cesantía days	Cesantía CRC	Cesantía USD
4 months	1 week	7	₡350,000	US$769.54
9 months	15 days	14	₡700,000	US$1,539.07
1 year	1 month	19.5	₡975,000	US$2,143.71
3 years	1 month	61.5	₡3,075,000	US$6,760.92
5 years	1 month	106.2	₡5,310,000	US$11,674.95
8 years	1 month	176	₡8,800,000	US$19,348.31
10 years	1 month	172	₡8,600,000	US$18,908.58
15 years	1 month	160	₡8,000,000	US$17,589.38

Cost of dismissal without cause at ₡1,500,000 average monthly salary (₡50,000 a day, one thirtieth of the month, used here for illustration), USD at ₡454.82

Worked example

Dismissal without cause after five years at ₡1,500,000 a month (US$3,298.01): one month notice ₡1,500,000 (or worked), cesantía ₡5,310,000 (US$11,674.95), plus untaken vacation and the proportional aguinaldo. Ten years gives 21.5 x 8 = 172 days, fewer than eight years at 22 days (176), because the rate falls after nine years and only eight years count.

Step by step

Decide whether there is a provable art. 81 cause; if not, treat the dismissal as without cause.
For a disciplinary dismissal act within one month of learning the facts and prepare a detailed letter.
Deliver the letter in person at dismissal, or file it at the MTSS within ten calendar days if refused.
Calculate notice, cesantía on the six month average, vacation and proportional aguinaldo.
Check protected statuses (pregnancy, breastfeeding, union fuero) before acting.

Common traps

Facts not written in the dismissal letter cannot be used in court (art. 35).
Waiting more than a month after learning of misconduct loses the right to dismiss for it (art. 414).
An unproven just cause adds back pay up to judgment on top of notice and cesantía (art. 82).

Sources

← Maternity, paternity and family leave in Costa Rica: four months of maternity leave paid half by the CCSS, eight paternity days and pregnancy dismissal protectionSocial security and occupational risk insurance in Costa Rica: CCSS registration, worker and employer contributions, the INS policy and the labour capitalisation fund →

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