13th/14th Salary: The Complete Guide

Melanie Johns, Global Expansion Delivery Coordinator

When branching out to employment in a new territory, it’s likely you’ll encounter some unfamiliar payroll jargon, including the terms 13th and 14th salary payments. Whilst only mandatory in 25 countries worldwide, it’s customary to include these in an additional 30 countries’ employment contracts. Here’s everything you need to know.

What is 13th/14th salary?

13th and 14th salary payments are a form of additional compensation, accrued throughout the year, then traditionally paid out in one or two instalments in June and December. The usage of 13th or 14th salary must be considered when considering an employee’s salary, as this will affect the cost to the employer. These additions can be voluntary, discretionary, or mandatory payments to supplement the usual monthly pay, and are typically only offered to salaried employees, excluding contractors, freelancers, and zero-hours employees. As these are increasingly common across the globe, it’s important to know what this means as an employer if you’re looking to hire through a Professional Employer Organisation (PEO).

Where did they originate from?

13th and 14th salary payments are thought to have originated in Italy in the 1930s, known as ‘gratifica natalizia’, and began as a voluntary bonus entering the Christmas period, although employers at the time were under no obligation to pay this. This practice was legalised for factory workers in 1937, broadened to all industries in 1946, and is now known as ‘tredicesima’. The Philippines followed suit in 1975, legalising the 13th salary payment to combat minimum wage lagging behind the cost of living. Since then, 23 more countries have extended employment legislation to include additional salary payments.

How is it calculated?

13th and 14th salary are calculated in several ways, but the most popular is by dividing an employee’s annual salary by 12 and paying this monthly figure as an additional amount.

Annual salary/12 = 13th salary payment

Another common method is to divide the annual salary by 13 (or 14), so the additional compensation is still taken from the annual base salary, rather than being a bonus amount.

Annual salary/13 = 13th salary payment

The method of calculation used will likely affect the base salary offered to the employee, so this is worth checking!

Where is it mandatory?

The table below shows countries in which 13th or 14th month salary are mandatory in every industry, however Austria, Belgium, Cyprus, France, and Germany all mandate 13th salary by industry.


Armenia 13th only, paid before New Year holidays
Greece Paid in June, December, and an additional bonus for Easter
Italy Paid in June and December
Portugal Paid in June and December
Spain Paid in June and December

Latin America

Argentina 13th only, split between June and December
Bolivia 13th is tax free, 14th paid as mandatory bonus only if GDP over 4.5%
Brazil 13th split across November and December, 14th paid in January
Colombia 13th only, split between June and December
Costa Rica 13th only, paid in December
Dominican Republic 13th only, paid in December
Mexico 13th only, paid in December
Ecuador 14th mandatory, can be paid in one lump sum or in parts across the year
El Salvador 13th, paid as Christmas bonus
Guatemala 13th and 14th, paid in June and December
Honduras 13th in December, 14th in July
Nicaragua 13th only, paid in December
Panama 13th paid in 3 parts in April, August, and December
Peru 13th and 14th, paid in July and December
Uruguay 13th, paid in two halves in June and December
Paraguay 13th only, paid in December
Venezuela 13th only, paid in December


India 13th only, paid within eight months of the end of the financial year
Indonesia 13th only, as religious holiday bonus (Tunjangan Hari Raya)
Philippines 13th, paid either in December or split between May and November; additional 14th and 15th may be added
Saudi Arabia 13th only, paid on Eid


Angola 13th and 14th, as a vacation bonus and in December as Christmas bonus
Nigeria 13th only, paid in December
South Africa 13th only, paid in December

How is 13th month salary different to a bonus?

Whilst 13th month salary may seem like a bonus, it’s not considered to be one, as it isn’t determined by employee or company performance. It’s historically used instead to supplement employee salary at specific times throughout the year, particularly holiday periods. There are also differences in how 13th month salary is taxed in comparison to bonuses, as performance-based bonuses may not be taxable in some countries.

How is 13th salary taxed?

In most cases, 13th and 14th salaries are subject to the usual income taxes, the same as all normal salaries. However, this varies between countries, with some only applying tax once a threshold is reached. As well as changes in taxation, some countries may also have different employers’ costs on 13th and 14th salary payments.

How can a PEO help?

If you're unfamiliar with 13th and 14th salary payments or you're unsure how to handle them in a new market, a Professional Employer Organisation (PEO) can provide valuable support. A PEO can advise you on the local laws and regulations regarding 13th and 14th salaries and help you manage the administrative and tax-related aspects of these payments.

By partnering with a PEO, such as Procorre Global, you can ensure that your business complies with local payroll laws and regulations and avoids any penalties or fines. Contact us today to find out more.