#CostaRica 🇨🇷 #BDS_LaborAlert: New Income Tax Brackets and Tax Credits to Take Effect on January 1, 2025

In accordance with Decree No. 44772-H, published in Item No. 195 to Official Gazette No. 227 on December 7, 2024, the income tax brackets and applicable tax credits for salaries have been updated. These updates will take effect on January 1, 2025. The new amounts are as follows:

1. Incomes of up to ¢922,000.00 (nine hundred twenty-two thousand colones) per month will not be subject to tax.
2. On the portion exceeding ¢922,000.00 and up to ¢1,352,000.00 (one million three hundred fifty-two thousand colones) per month, a 10% tax will apply.
3. On the portion exceeding ¢1,352,000.00 and up to ¢2,373,000.00 (two million three hundred seventy-three thousand colones) per month, a 15% tax will apply.
4. On the portion exceeding ¢2,373,000.00 and up to ¢4,745,000.00 (four million seven hundred forty-five thousand colones) per month, a 20% tax will apply.
5. On the portion exceeding ¢4,745,000.00 per month, a 25% tax will apply.

With respect to monthly tax credits, the following has been established:

• A tax credit of ¢1,720.00 (one thousand seven hundred twenty colones) per child.
• A tax credit of ¢2,600.00 (two thousand six hundred colones) per spouse.

We remind our clients that this update will not only impact the calculation of income tax on salaries, for which the employer acts as the withholding agent, but it will also require adjustments to the net salary payable to employees for the purpose of wage garnishment calculations.

To view Item No. 195, click here.

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