Costa Rica Average Income: What You Need to Know

Did you know that Costa Rica is the country with the highest minimum salary in Latin America? If you’re interested in investing in this Central American nation with its expanding job market and easy access to the United States, it’s important to understand the factors that drive the Costa Rican economy, as well as the aspects behind the average income.

Costa Rica has been characterized by its steady growth and political stability. The World Bank has termed its performance a "success story in terms of development", due to its openness to foreign investment and gradual trade liberalization.

As the economy recovered after the pandemic, Costa Rica’s Gross Domestic Product grew in 2022 by 4.6% to US$69.24 billion, and in 2023 the poverty rate fell from 19.9% to 12.7%. In 2023, the GDP increased by 5.1%, mostly due to the acceleration of private consumption, increased investment, and exports.

What is the average annual income in Costa Rica?

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The average income in Costa Rica stands at ₡411,151 colones per month (US$820 in April 2024), according to the National Statistics bureau, INEC. The figure represents a rise of 4% compared to 2022. Annually, the average income is ₡4,933,812 (US$9,840.35), excluding bonuses from a typical employment relationship.

Additionally, the salary income increased 4.2% in 2023 to ₡680,890 (US$1,358). 

INEC also pointed out that location matters in terms of the average household income in Costa Rica. Urban households have an average income of ₡1,173,278 (US$2,340.07) per month, whereas rural households get ₡719,885 (US$1,435.79).

The average income depends on different factors such as industry, experience, level of education, and location. Salaries in San José, the capital city, tend to be higher compared to other cities.

Comparative profession earnings

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Source: Salary Expert

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The average monthly salary ranges from ₡358,000 (US$687) for unskilled occupations, including ₡463,000 (US$922) for specialized workers, to ₡765,000 (US$1,523) for those with a university degree, according to the Labor Ministry. 

In January, the government issued the list of minimum salaries and wages for the first half of 2024. Certain professions may have even higher salaries.

The last increase in salaries (1.83%) made Costa Rica the country with the highest minimum salary in Latin America, measured in US dollars, taking into account the amount for unskilled workers (US$687). Uruguay and Chile are the next countries with an average minimum salary around US$500. 

Labor Market Overview

The average income is explained in part by a growing economy, a competent education system, Costa Rican’s workforce skills, the development of tech industries, and the manufacturing of medical equipment for the public health sector. 

The OECD has noted that economic activity across the private and public sectors strengthened in 2023, driven particularly by manufacturing, construction, and professional services. Moreover, the Investment Confidence Index reached its highest level in 10 years.

Costa Rica's labor market faces, however, some challenges. Around 50% of the population has a paid job. The unemployment rate stands at 7.8%. The private sector struggles to fill vacancies, particularly in technical and scientific positions. In this context, the Ministry of Education has set the ambitious goal to have a fully bilingual population by 2040.

Real estate is also becoming expensive, with soaring prices putting San José apartments out of reach. This might pose recruitment challenges by escalating salary demands. As the cost of living rises, employees may demand higher wages to compensate for their increased living expenses. This can lead to upward pressure on payroll costs for employers. 

Trends and Opportunities

A traditional producer of pineapples and bananas, a driving sector of the economy, Costa Rica has in recent years experienced  a change in industries related to professional services and the manufacturing of medical equipment that add value to the country's exports.

According to the World Bank, Costa Rican growth will slow in 2024, followed by a rebound. The Costa Rican economy is going to increase 3.9% in 2024 and 3.7% in 2025, mostly because of global economic conditions. 

In a recent report, the International Monetary Fund (IMF) has highlighted that Costa Rica has one of the highest shares of foreign-born employees living in the country, which accounts for 11% of Costa Rica’s labor force. The IMF has stated that they bring “a diverse skill set” that can complement that of native-born workers.

In addition, Costa Rica's commitment to environmental sustainability presents opportunities for businesses to align with eco-friendly initiatives, such as the Payments for Environmental Services (PES) program, which incentivizes forest and biodiversity conservation.

Looking to the future

Costa Rica has room for improvement in some areas related to the labor market. Its stability, growth trajectory, and environmental initiatives position it for continued progress and offer a promising outlook for businesses. By understanding the local economic landscape, management teams and organizational leaders can make informed decisions and capitalize on opportunities in Costa Rica.

At Playroll, we are committed to helping organizations to hiring employees in Costa Rica. Our Employer of Record (EOR)  handles hiring, onboarding, payroll, taxes, immigration, benefits administration, and compliance.

Ready to take the next step in hiring employees in Costa Rica? Request a demo of Playroll's comprehensive HR solutions today and unlock the full potential of your workforce.