If you employ household staff, run a business in Costa Rica, or are thinking about doing either, aguinaldo is one of the most important annual obligations you need to plan for. Required by law and tied to a hard deadline of December 20, it catches business owners and employers off guard more often than it should — especially at year-end when cash flow is already stretched.
What Is Aguinaldo?
Aguinaldo — formally known as the décimo tercer salario (thirteenth month salary) — is a mandatory Christmas bonus that Costa Rican employers are legally required to pay to all employees. It is not a discretionary bonus or a reward for performance. It is a legal entitlement under the Costa Rican Labor Code that applies to every employee, whether they work full time, part time, hourly, or on salary.
The aguinaldo must be paid no later than December 20 of each year. An employer who fails to pay on time faces labor complaints, penalties, and potential legal action from affected employees.
How Is Aguinaldo Calculated?
The calculation is straightforward: aguinaldo equals one-twelfth of the total wages earned by the employee between December 1 of the prior year and November 30 of the current year. This covers all regular wages, overtime, commissions, and any other regular compensation — not just the base salary.
For an employee who has worked the full twelve-month cycle, aguinaldo is effectively one full month of their average compensation. For an employee hired mid-year, the calculation is proportional to the months worked during the period.
Here is a simple example: an employee earning ₡500,000 per month consistently throughout the year would receive aguinaldo of approximately ₡500,000. An employee with variable commissions would receive one-twelfth of their total earned income for the period, which can be higher.
Who Must Pay Aguinaldo?
Every employer in Costa Rica who has employees — including:
Landlords employing on-site property managers or maintenance workers
Expats with household staff — this is one of the most commonly overlooked obligations for foreign residents in Costa Rica
There are no minimum hours or employment duration thresholds — if someone works for you under an employment relationship, they are entitled to aguinaldo for the time they worked.
Why Aguinaldo Creates Cash Flow Pressure
The December 20 deadline is fixed, and for many employers — especially those whose revenue is seasonal, project-based, or tied to real estate activity — the timing is difficult. Year-end already brings marchamo payments for vehicles, property tax installments, and the increased costs of the holiday period. Adding aguinaldo obligations for multiple staff members can put significant pressure on short-term liquidity.
For business owners and property investors who have equity in Costa Rica real estate but face a short-term cash flow gap, private property-backed financing is one option worth understanding. GAP Equity Loans works with qualified borrowers who own property in Costa Rica and need short-term access to capital. Loan requests start at US$50,000 and up, with terms from six months to three years, and no credit score is required for a normal review. Qualified loans can often close in about 10 days once all documentation is complete.
This type of financing is not designed to cover a single aguinaldo payment — the minimum loan size reflects that. But for a business owner or property investor managing a larger set of year-end obligations, or needing liquidity while waiting for a property sale or rental income to settle, it may be a relevant option. Every arrangement depends on property review, documentation, and lender approval.
Aguinaldo vs. Christmas Bonus
Aguinaldo is sometimes confused with an employer’s voluntary Christmas bonus. They are different. Aguinaldo is a legal minimum — a right, not a gift. An employer can choose to pay an additional discretionary bonus on top of aguinaldo, but the aguinaldo itself cannot be withheld, deferred, or used as a negotiating point. It is mandatory.
Calculating and Paying Aguinaldo — Practical Steps
To prepare and pay aguinaldo correctly:
Identify the calculation period — December 1 of the prior year through November 30 of the current year
Compile total wages for each employee during that period, including all regular and variable compensation
Divide by 12 to arrive at each employee’s aguinaldo amount
Adjust for partial-year employees by counting only the months they were employed during the period
Make payment by December 20 — direct deposit or cash payment; keep a signed receipt or payroll record as proof
Frequently Asked Questions
Is aguinaldo subject to income tax or social security (CCSS) contributions?
Aguinaldo is exempt from income tax (impuesto sobre la renta). However, it is subject to CCSS (Caja Costarricense de Seguro Social) contributions — both employer and employee portions. Confirm the current applicable rates with your accountant or a labor attorney.
What if an employee resigns before December 20?
An employee who worked any portion of the December 1 – November 30 cycle is entitled to proportional aguinaldo for the time worked. If they resign before December 20, their proportional aguinaldo is typically settled as part of their final liquidation payment.
Can I pay aguinaldo early?
Yes. There is no restriction on paying early. Many employers prefer to pay in the first two weeks of December to ensure compliance and to help staff plan their holiday expenses.
What happens if I pay late or don’t pay?
An employee can file a complaint with the Ministry of Labor (MTSS). Penalties and interest can apply, and unresolved complaints can escalate to formal legal proceedings. Consistent non-payment constitutes a labor violation.
This article is for general information only and is not legal, financial, or tax advice. Aguinaldo requirements are established under Costa Rican labor law and details may change. Confirm your obligations with a certified public accountant (CPA) or a labor attorney in Costa Rica.
A traditional bank in Costa Rica can take many months to process and fund a business loan — far too long when year-end deadlines are fixed. Expats and foreign business owners face an additional challenge: local banks typically require an established Costa Rica credit history to qualify, which most foreigners haven’t had time to build. GAP Equity Loans works differently — with real estate as collateral and a complete file, qualified loans can close in about 10 days.
For expats and foreign property owners in Costa Rica, traditional bank financing is rarely an option. Opening a bank account in Costa Rica requires permanent residency — and permanent residency typically takes around four years to obtain, starting from a temporary residency category. Without a local bank account, there is no Costa Rica credit history, and without that, bank financing simply is not available. When year-end obligations have a hard deadline, GAP Equity Loans offers private property-backed financing that can close in about 10 days once the file is complete.
Article by Glenn Tellier (Founder of CRIE and Grupo Gap)
We provide insights on financing a business in Costa Rica with private property-backed loans and essential details on loan-to-value and property value.
Learn about starting-a-business-loan-in-costa-rica with our guide on using real estate as collateral, ensuring a proper repayment plan and lender due diligence.
