13th and 14th Month Pay

What is 13th and 14th month pay?

For businesses looking to employ global talent, it is crucial to assess and understand statutory laws such as 13th/14th month pay.

The 13th/14th month pay is a type of compensation paid to the employees on top of the base salary as per the mandatory labor laws in certain countries.

In some countries, such as Greece, Peru, or even Italy, it is mandatory by law to provide such a bonus, commonly referred to as the 13th/14th month's pay. In some other countries, it is left to the company's discretion to decide if it wishes to offer an additional month’s pay to its employees.

In countries where these bonuses are mandatory, it is important to note that they are paid in addition to the monthly salary.

In this article, let’s understand what the 13th and 14th-month pay mean and how it is calculated in countries where it is mandated by the local labor laws.

13th Month Pay

The 13th month pay, as mentioned earlier, is a kind of bonus or additional compensation paid to the employees, usually around December month. The month in which the amount is paid can vary depending on the laws of a specific country. It is a payment, equivalent to one month's salary, given to the employee on top of their base salary.

The purpose of the 13th month pay is to provide employees with an additional income to celebrate the festival season, cover increased expenses, or simply recognize their hard work throughout the year.

14th Month Pay

The 14th month pay is also a kind of bonus given beyond the 13th month pay. It is a bonus payment made to employees in addition to both their regular monthly salary and the 13th month pay. Similar to the 13th month pay, the 14th month pay is also usually paid towards mid of the year.

How is the 13th/14th Month Pay Calculated?

There are two ways by which 13th/14th month pay is calculated in countries where it is mandatory to provide the same:

1. The 13th/14th month pay is paid in addition to the annual salary.

2. The 13th/14th month pay is a part of the annual salary.

13/14th Month Pay paid in addition to the gross salary

In some countries, the 13th/14th Month Pay is paid on top of the annual salary.

For example:

In Brazil, the 13th month pay is given as a Christmas bonus in addition to the annual salary. This amount is the same as one month's salary given to the employee for the 12 months.

Let’s say an employee receives 120,000 BRL per year as their annual salary. This means that per month, the cost to the company is 120,000/12, i.e., 10,000 BRL.

Since the monthly salary is 10,000 BLR, the 13th month's salary will also be 10,000 BLR.

The total annual cost to the company for this employee would be 120,000 (Yearly Salary) + 10,000 (13th Month Pay) + 52,404 (Other Employer Contributions in Brazil) = 182,404 BRL

Gross Salary Per Year	120,000 BRL
13th Month Salary	10,000 BRL
Other employer contributions	52,404
Total Salary Per Year Calculation	120,000 + 10,000 + 52,404
Total Salary Per Year	182,404 BRL

Following are the countries where 13th/14th month pay is not a part of the gross salary:

Note that 13/14th month pay is paid on top of the gross salary as per country laws.

1. Argentina - In Argentina, the 13th month pay is applicable and is paid in June, and the 14th pay is paid every December.

2. Belgium - The 13th month pay in Belgium is referred to as ‘End of Year Premium Cost’, and the 14th month pay is called ‘Holiday Pay Cost’.

3. Brazil - In Brazil, the 13th-month pay is called the ‘Christmas Bonus,’ and the 14th-month pay is not applicable.

4. Columbia- In Columbia, the 13th month's pay is applicable and paid in June, and the 14th month pay is not applicable.

5. Costa Rica - In Costa Rica, the 13th month's pay is called ‘Aguinaldo (Christmas Bonus)’, and the 14th month's pay is not applicable.

6. Ecuador - In Ecuador, 13th month pay is applicable and paid in December; and the 14th month pay is paid in August.

7. El Salvador - In El Salvador, the 13th-month pay is called the ‘Christmas Bonus’, and the 14th-month pay is not applicable

8. Guatemala - In Guatemala, the 13th month's pay is called a ‘Productivity Bonus’, and the 14th month's pay is referred to as a ‘Christmas Bonus’.

9. Honduras - In Honduras, 13th-month pay is called ‘13th Month—Bono del decimotercer mes’, and 14th-month pay is referred to as ‘14th Month—Bono del cuarto mes’.

10. Indonesia - In Indonesia, 13th month pay is called ‘13th Month -Tunjangan hari raya(THR)’ and 14th month pay is not applicable

11. Mexico - In Mexico, the 13th-month's pay is called a ‘Christmas Bonus (Aguinaldo)’.

12. Peru - In Peru, the 13th month's pay is called ‘Gratificacion de Fiestas Patrias (Holiday Bonus)’, and the 14th month's pay is called ‘Gratificación de Navidad (Christmas Bonus)’.

13. Puerto Rico - In Puerto Rico, the 13th month pay is called ‘Christmas Bonus’, and the 14th month pay is not applicable.

14. Philippines - 13th-month pay is known by the same name in the Philippines and the 14th-month pay is not applicable.

15. Uruguay - 13Th Month Pay is applicable which is paid in June, and 14th month pay is not applicable.

16. Mauritius - In Mauritius, the 13th-month pay is called the ‘Christmas Bonus’, and the 14th-month pay is not applicable

13/14th Month Pay part of the gross salary

In some countries, the 13th/14th month pay is a part of the gross salary.

For example:

In Italy, 13th and 14th month pay are part of the annual salary. This means the annual salary will be divided by 14 months instead of 12.

Let’s say an employee receives 140,000 EUR per year as their annual salary. This means the employee's monthly salary will be 140,000/14, i.e., 10,000 EUR.

Net salary per year will be 10,000 EUR * 12 since 10,000 EUR is per month salary.

13th & 14th month pay will be 10,000 EUR each since 10,000 EUR is per month salary.

13th & 14th Month Salary	10,000*2 = 20,000 EUR

The total annual cost to the company for this employee would be 120,000 (Net Yearly Salary) + 20,000 ( 13th & 14th Month Pay) + 17,209 (Other Employer Contributions in Italy) = 157,209 EUR.

Net Salary Per Year	120,000 EUR
13th & 14th Month Salary	20,000 EUR
Other Employer Contributions	43,701 EUR
Total Salary Per Year Calculation	120,000 + 20,000 + 43,701
Total Salary Per Year	183,702 EUR

Following are the countries where 13th/14th month pay is a part of the gross salary:

13th/14th month pay is included in the Gross Salary and is mentioned on the contract.

1. Greece - In Greece, the 13th month pay is referred to as the Christmas Bonus. The 14th month pay is divided into two installments, each equal to 15 days' salary. The first installment, known as the "Easter Bonus," is paid around April, and the second installment is paid around July or August.

2. Portugal - The 13th month pay in Portugal is referred to as Subsidio de Ferias (Holiday bonus), and the 14th month pay is referred to as Subsidio de Natal (Christmas bonus).

3. Italy - The 13th month pay is known by the same name in Italy. The 14th month pay is not compulsory in Italy.

Note: The salary calculator calculates the maximum possible 13th/14th month pay amount considering the salary at the onboarding time. The actual 13th/14th month pay will depend on multiple factors such as the date of joining, last working day, salary revisions, etc.

Payout months of 13th/14th month pay

The payout month may vary depending on the country, but are usually paid in the following ways:

1. One installment: Paid out at the end of the year, around mid of December

2. Two installments: Half the amount is paid out two times in mid of the year in June and the other in December

Here is the payout schedule for the following countries where 13th and 14th month pay is mandatory by law:

Country	Pay components	Months	Calculation Logic
Argentina	13th month	June	Annual salary/12
Argentina	14th month	December	Annual salary/12
Bangladesh	Festival Bonus	April	Annual salary /12
Belgium	13th month	December	Annual Salary /12
Brazil	13th month	December	Annual Salary /12
Colombia	13th month	June	Annual Salary /12
Costa Rica	Christmas Bonus	December	Annual salary/12
Ecuador	13th month	December	Annual salary/12
Ecuador	14th month	August	Annual salary/12
El Salvador	Christmas Bonus	December	Annual salary/12
Greece	Ester Bonus	April	Annual salary/12
Greece	Vacation Bonus	July/August	Annual salary/12
Greece	Christmas Bonus	December	Annual salary/12
Guatemala	Christmas Bonus	December	Annual Salary /12
Guatemala	14th month	July	Annual Salary /12
Honduras	Christmas Bonus	December	Annual Salary /12
Honduras	14th month	June	Annual Salary /12
Indonesia	Christmas Bonus	December	Annual salary/12
Italy	13th month	December	Annual salary/12
Italy	14th month	June	Annual Salary /12
Mauritius	13th Month	December	Annual Salary /12
Mexico	13th month	December	Annual Salary / 12
Netherlands	Holiday Pay (8%)	June	Annual salary/12
Panama	13th month	April	Annual salary/12
Peru	13th month	July	Annual salary /12
Peru	14th month	December	Annual Salary /12
Philippines	13th month	December	Annual Salary /12
Portugal	13th month	December	Annual Salary /12
Portugal	14th month	June	Annual salary/12
Puerto Rico	Christmas Bonus	December	Annual salary/12
Uruguay	13th month	June	Annual salary/12