Thirteenth salary

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A thirteenth salary, or end-of-year bonus, is an extra payment given to employees at the end of December. Although the amount of the payment depends on a number of factors, it usually matches an employee's monthly salary and can be paid in one or more installments (depending on country).


Early information about a thirteenth salary came from the Philippines in December 1975, where there was a problem with updating the minimum wage.[1] The minimum wage had not been raised for five years, and no longer matched the cost of living. Philippine president Ferdinand Marcos created a law paying a thirteenth salary to improve the situation.[1] It paid a bonus to workers, which could be saved or spent.

Compensation based on annual work was paid in addition to the basic salary on the basis of the decision of the Central Committee of the Communist Party of the Soviet Union and the Council of Ministers of the USSR on October 4, 1965 ("On improving planning and enhancing economic incentives for industrial production"). Paid from the material incentive fund, the amount of funds was determined by the administration in conjunction with the Central Committee. If a company fulfilled (or exceeded) annual plans for the sale of products (or profits) and estimated profitability, the thirteenth salary could be paid from funds earmarked in the budget and other cash reserves. If a company did not meet the targets, a reduced amount was paid.[2]


A number of countries followed the Philippines, enacting similar thirteenth-salary laws, and some have passed laws about fourteenth- and fifteenth-month pay. Some regions have a compulsory fourteenth salary.[3] Brazil has a mandatory fourteenth-month salary, which is treated as a holiday bonus.[4]

The payment varies by country. Some have one payment at the end of the year, and others pay in two installments: one in the first half of the year, and the second at the end.[5] This could motivate people to travel or otherwise enjoy summer holidays. Corporations which fail to make the payments may be fined.[5]


The thirteenth salary is normally tax-exempt, although some countries have restrictions; if the payment exceeds one month's salary, it could be taxable.[6]


The thirteenth salary is most frequently expressed as a one month's salary, or one-twelfth of the annual salary. Not all workers are guaranteed this amount, however; in Mexico, most people receive at least 15 days' wages.[5]



  • Armenia: paid before the New Year holidays
  • Greece: 14th-month and holiday bonuses are paid on Christmas, Easter, and summer vacation
  • Portugal: paid by December 15
  • Spain: mandatory 14th-month bonuses (pagas extraordinarias) paid in summer and at Christmas. They can be prorated into the twelve monthly salaries.[7]



In Germany, a legal distinction is made between a thirteenth salary and a Christmas bonus; in most other countries, the terms are used interchangeably. The Christmas bonus (usually paid with the November salary) is intended to pay additional holiday expenses and retain employees.[8] The thirteenth salary is paid by an employer for ongoing work at the end of a calendar year. An employee is entitled to a prorated thirteenth salary if they leave their employer before the end of the calendar year, unless the parties to the employment contract have agreed otherwise.[9]

Special payments for regular work performance (a requirement fulfilled by the thirteenth salary, and the Christmas bonus in certain cases) can be counted towards the minimum wage.[10][11][12] For example, a person works full-time and earns 8.03 per hour until a minimum wage of €8.50 per hour is introduced. Their employment contract stipulates that they are entitled to a half-month Christmas bonus and an annual holiday payment, totaling one month's salary. To meet the minimum wage of €8.50 (required by law in Germany since January 2015), the employer consolidates the holiday payment and Christmas bonus and pays one-twelfth of the amount to the employee every month. The employee's hourly wage would increase to €8.69, meeting the minimum wage.[12]

The Christmas bonus is part of the other-remuneration category, in accordance with §39b Abs. 3 of the EStG.[13] The Christmas tax allowance was abolished with the Tax Reform Act of July 25, 1988.[14] Since July 2008, federal officials have no longer received Christmas bonuses; the special payments (Christmas and holiday bonuses), amounting to five percent of the annual salary, were integrated into the officials' base salary.[15]


Most Swiss employers pay their employees' annual salary in 13 instalments, rather than 12. An employee usually receives two months' salary in December, which helps pay end-of-year and holiday bills. Sometimes they receive half in July and half in December, however, similar to Germany's Christmas bonus and holiday payment. The thirteenth monthly salary is not a bonus, but a delayed payment. Whether or not a thirteenth salary is paid is part of an employment contract; some companies pay a higher monthly salary instead of the additional payment. In the first and last years of employment, the thirteenth salary is prorated for partial years.[16]

Some employers pay an additional annual bonus based on employee performance or employer profits. When an employee pays direct income tax and the 13th month's salary and bonus are paid in the same month, a higher tax rate is paid.[16]

Latin America[edit]

In Latin America, the thirteenth salary is commonly known as aguinaldo or prima in Spanish (bonus).[17][18]


  • Argentina: two equal instalments, by June 30 and December 18
  • Bolivia: tax-free, up to one month’s wages. A 14th-month bonus is mandatory as a holiday bonus if the GDP is over 4.5 percent.
  • Brazil: paid in two equal parts, by November 30 and by December 20. A mandatory 14th-month bonus is a holiday bonus. It is one-twelfth of the wage paid in December per month worked previously (if the worker was hired less than one year ago), or equal to the December wage.[19][4][20]
  • Colombia: two halves, paid during the first 15 days of June and the first 20 days of December
  • Costa Rica: paid during the first 20 days of December
  • Dominican Republic, Mexico: paid by December 20
  • Ecuador: A mandatory 14th-month bonus is paid in parts or in a lump sum.
  • El Salvador: Christmas bonus, based on years of service
  • Guatemala: paid at mid-year. A mandatory 14th-month bonus is paid at the end of the year; both are equal to one month's salary.
  • Honduras: paid in December. A mandatory 14th-month bonus is paid in July; both are equal to one month's salary.
  • Nicaragua: one month's salary, paid by December 10
  • Panama: paid in three equal parts on April 15, August 15, and December 15
  • Peru: paid in July. A mandatory 14th-month bonus is paid in December.
  • Uruguay: paid in two halves, on June 30 and by the end of the year
  • Paraguay, Venezuela: paid at the end of the year


  • Chile: paid in December or in two halves, in September and December[1][3]





  • Angola: A mandatory vacation bonus is paid before a holiday. A mandatory 14th-month Christmas is paid in December.
  • Nigeria: paid before Christmas
  • South Africa: paid at the end of the year[1][3]

See also[edit]


  1. ^ a b c d e f "13th Month Pay | An Employer's Guide to Monetary Benefits". Globalization Partners. 13 November 2019. Retrieved 29 February 2020.
  3. ^ a b c d e "Revisiting 13th and 14th Month Bonus Rules in Latin America, Europe, Africa and Asia".
  4. ^ a b Law 4749, of 12 August 1965
  5. ^ a b c Kagan, Julia. "Aguinaldo". Investopedia. Retrieved 29 February 2020.
  6. ^ "13th Month Pay Vs. Christmas Bonus: Know The Difference". eCompareMo. Retrieved 29 February 2020.
  7. ^ "La paga extra no es obligatoria en verano". ORH | Observatorio de Recursos Humanos. 21 June 2019.
  8. ^ "BAG, Urteil vom 12. 10. 2005 – 10 AZR 640/04". Retrieved 28 April 2020.
  9. ^ reserved, Copyright Haufe-Lexware GmbH & Co KG- all rights. "Dreizehntes Gehalt | Haufe Personal Office Platin | Personal | Haufe". News und Fachwissen (in German). Retrieved 28 April 2020.
  10. ^ "Bundesarbeitsgericht". Retrieved 28 April 2020.
  11. ^ "Bundesarbeitsgericht". Retrieved 28 April 2020.
  12. ^ a b SPIEGEL, DER. "Mindestlohn-Urteil: Weihnachtsgeld darf angerechnet werden - DER SPIEGEL - Wirtschaft". (in German). Retrieved 28 April 2020.
  13. ^ reserved, Copyright Haufe-Lexware GmbH & Co KG- all rights. "Sonstige Bezüge im Lohnsteuerrecht | Haufe Personal Office Platin | Personal | Haufe". News und Fachwissen (in German). Retrieved 28 April 2020.
  14. ^ "DFR - BVerfGE 96, 1 - Weihnachtsfreibetrag". Retrieved 28 April 2020.
  15. ^ "Sonderzahlungen -» dbb beamtenbund und tarifunion". 23 September 2015. Retrieved 28 April 2020.
  16. ^ a b "Salary and Benefits | ETAS". Retrieved 28 April 2020.
  17. ^ "INFOLEG".
  18. ^ "Sueldo Anual Complementario o Aguinaldo". Ministerio de Trabajo y Seguridad Social.
  19. ^ Law 4090, of 13 July 1962.
  20. ^ "13th Salary in Brazil".
  21. ^ "Revisiting 13th and 14th Month Bonus Rules in Latin America, Europe, Africa and Asia". Aon plc. September 2017. Retrieved 5 August 2019.
  22. ^ "Variable wage components: AWS, bonus, variable pay". Ministry of Manpower Singapore.
  23. ^ "Vietnam PEO & Employer of Record - Expand Business into Vietnam". Globalization Partners.

Further reading[edit]