Salaries in kind Costa Rica

Article 164 of the Labor Code indicates that the salary can be paid in several ways, including in kind. Article 166 defines what is to be understood as salary in kind and indicates that it corresponds to what the worker or his family receives in food, room, clothing and other articles destined for immediate personal consumption. In spite of its definition in the legislation, this concept causes great controversy and doubts regarding its application and implications at the time of liquidating benefits.


It is important to be clear about what is really meant by salary in kind, since this concept can be a bit ambiguous. Salary in kind is any benefit granted to the worker that can be valued in money, that is to say, of a retributive nature and that can also be for the personal use of the worker or any of his family members. However, it must be clear that, even if there is some type of remuneration for salary in kind, this cannot be the only means of payment of the salary, but there must necessarily be a salary in money.


The contracting parties must fix the value of the salary in kind, however, the law provides that when the value has not been determined then the salary in kind is deemed equivalent to fifty percent of those received in cash by the worker, without prejudice that the interested party may prove that the amount is different. The main purpose of the salary in kind is, in most cases, to recognize the worker as a complementary remuneration for the service rendered.


The Courts of Justice have indicated that for the benefits to be considered as salary in kind they must be of free and prudent use by the employee, as well as that there must be a periodicity and stability in the enjoyment of the good, for example there is much talk about the delivery of a cell phone or vehicle to an employee, in this case it must be considered as salary in kind only when the benefit granted for the use of the same is discretionary, that is, that the employee can use them not only for work purposes but also for personal purposes, such as going out or making calls outside of his or her work.


All these considerations must be taken into account and carefully analyzed by the employer, since, if a salary in kind is granted, this item, together with the salary in cash, must be included for the calculation of labor benefits at the time of payment of the liquidation.


In case of additional questions regarding this issue do not hesitate to contact us, in RJM Abogados we have the labor advice you need.


Author: Sofía Rodríguez