When a company in Costa Rica processes its employees’ payroll, it must also report information to various institutions, including the Costa Rican Social Security Fund (CCSS), the National Insurance Institute (INS), and the Treasury Ministry.
Although each institution uses this information for different purposes, the reported data must be consistent and properly supported. If there are differences that cannot be justified, the company could receive inquiries, undergo reviews, or even face adjustments by any of these institutions.
Therefore, maintaining proper control over salary information helps prevent issues and provides greater assurance regarding compliance with employer obligations.
Why is it important to keep the information consistent?
When salary information matches the company’s records and the reports submitted to the different institutions, it is easier to demonstrate that everything has been handled correctly.
In addition, this makes it possible to:
- Comply with employer obligations.
- Avoid discrepancies or subsequent corrections.
- Reduce the risk of inspections or requests for information.
- Maintain better payroll control.
- Provide greater peace of mind to both the company and its employees.
What information does each institution receive?
Although all three institutions receive salary-related information, each uses it for a different purpose.
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Institution
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What is the information used for?
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CCSS
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To calculate employee and employer social security contributions and ensure access to social security benefits.
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INS
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To determine the premium for the Occupational Risks Insurance Policy.
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Treasury Ministry
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To verify compliance with tax obligations, such as income tax withholdings, when applicable.
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What can happen if the information does not match?
1. The CCSS may request clarifications
If the reported salaries do not match the company's internal records, or if there are significant discrepancies, the CCSS may request documentation to verify the accuracy of the information.
How can this be prevented?
- Review payroll before submitting the payroll report.
- Verify that salaries are correctly recorded.
- Keep supporting documentation for payments made.
2. Adjustments to the INS insurance policy
Salary information also affects the Occupational Risks Insurance Policy. If the reported amounts are incorrect, discrepancies in the calculation may arise.
How can this be prevented?
- Keep salary information up to date.
- Review salary changes throughout the year.
- Coordinate information among the responsible areas.
Best Practices
Some simple actions can help reduce errors:
- Review payroll before submitting any report.
- Compare the information to be submitted to each institution.
- Verify sick leave, overtime, and other special payments.
- Keep employee records up to date.
- Retain supporting documentation for transactions made.
Legal Basis
- Costa Rican Labor Code.
- Costa Rican Social Security Fund (CCSS): https://www.ccss.sa.cr
- National Insurance Institute (INS): https://www.grupoins.com
- Ministry of Finance: https://www.hacienda.go.cr
See: Attached document in PDF format.
The content of this newsletter is merely informative, that´s why it cannot be used under any circumstances as advice on the matter described in it. If you need advice on any of the aspects discussed, our team of professionals will be willing to assist you. contacto@jadelrio.com
