Difference between Salaried Employees and Private Services Contract.
from the perspective of the CCSS, Ministry of Labor and Finance.

Difference between Salaried Employees and Private Services Contract.

Every business activity with profit motives is subject to the offering of goods and services in the market. One of the pillars for advancing in development and growth is having the highest quality human resources with the best competencies to enhance efficiency in key processes and sustain the company.

Given our risk management culture and high social security rates, companies must understand the importance of choosing their human resources appropriately, using the best option between employment contracts for workers and hiring private services.

This article seeks, from a financial perspective, to provide clarity on the differences between the types of contracts that can be used according to our business activity and the various legal restrictions that need to be comprehensively addressed, especially the concept of legal subordination.

What is lega​l subordination?

It is understood as the contractual condition between the worker and the company where there is the power of supervision, direction, and control over the person performing the task or service.

This is crucial in the strategic definition of the roles that carry out processes and the business model. It would be easier to explain using three types of workers: the cashier in a restaurant, the external lawyer for the company, and, for example, an UBER driver. In this example, they all provide services to the same company, but the only one permanently subject to schedule control, procedure direction, and day-to-day supervision is the restaurant cashier. Meanwhile, the lawyer provides a service under certain agreed parameters, with the respective professional association exercising supervision. Finally, concerning this same aspect, we have the case of the UBER driver, who has a defined service provision.


It is important to note that, regardless of the type of contract, employers must comply with labor laws and provide certain benefits to employees, such as health insurance, paid vacations, bonuses, and other mandatory benefits established by Costa Rican labor legislation. 


    • 26,67% Employeers CCSS.
    • 10,67% Employee CCSS.
    • 2% Liability Insurance.
    • 8,66% 13th Month.
    • 4,33% Paid Leaves.


    • Social security and pension. 
    • Minimum Wage.
    • 8 hours day
    • 13th Month.
    • Paid Leaves.


In a free-market relationship between private or public parties, the supply and demand determine the price or value. This is precisely the primary advantage offered by hiring private services for certain functions and processes in companies. Additionally, this approach allows for obtaining human resources much more efficiently without the intervention of the State, an intervention that, on average, increases direct costs to the State by 41%.

For the service provider and the contracting party, this type of contract is the most optimal, as it generates 100% income for the human resources contracted for services. It also provides the possibility of managing better health services, saving for the future, and securing a pension.


    • The agreed terms by both parties in the Service Contract.
    • 13% Value Added Tax


    • The agreed terms by both parties in the Service Contract. 
    • Social security and pension.

There are variables among each form of human resources contracting that must be addressed based on the economic activity of the business, risk strategies, and profitability. 

In my experience, whenever legal subordination allows it, and as more workers become aware of the present and future declines in quality of life caused by the intervention of the State, the CCSS, and the INS in service provision, we will seek to favor a model of private services contracting (PSC).


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