The Base Salary In Costa Rica: Setting Fines and Penalties
Last December 2019, the Superior Council of the Judiciary, through Session Nª109-19, established the base salary for the year 2020 in Costa Rica ascending to ¢450,200 (four hundred and fifty thousand two hundred colons exactly).
This would have increased by about 1% compared to 2019, which was set at ¢460,200 (four hundred and sixty thousand two hundred colons).
This corresponds to the basic monthly salary of “Clerk 1” of the Superior Council of the Judiciary, according to Law 7337 of May 5, 1993.
Difference between minimum wage and basic wage
It should be noted that it differs from the minimum monthly salary, since the latter is set by the Ministry of Labor, according to a certain profession or trade depending on the economic sector.
Importance of the Base Salary
The basic monthly salary is of vital importance since it is a parameter for setting fines, penalties and taxes.
The Costa Rican Criminal Code establishes crimes that have a reference to the base salary as a penalty setting, such as aggravated theft, simple robbery, fraud and failure to comply with alimony obligations.
It is also used to set fines related to the Labor Code when employers do not comply with the International Labor Organization (ILO) Conventions.
Likewise, it serves as a parameter in the Law of Alimony, as for the fixation of this when the alimonyman is a non-worker, the pension will be updated according to the variation of the base salary.
Finally, it is also used in the tax regulations of Costa Rica, as in the Law of the Tax to the Legal Persons, when it establishes in its article 3 a rate annually for the mercantile societies and branches of companies of the foreigner, ascending to 15% of the monthly base salary.
Likewise, the Real Estate Tax Law refers to this tax when it indicates those exempted from it, indicating that real estate that constitutes a unique asset of individuals and whose value is a maximum of 45 base salaries will not be affected by this tax.
With respect to the imposition of tax fines, the base salary determines the limits of these, as in the case of transfer pricing fines, which although they are based on a percentage of net income cannot be less than three base salaries, nor greater than 100 base salaries.