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13th/14th Salary
The Complete Guide

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.

Melanie Johns
Global Expansion Delivery Coordinator

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).

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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.

13th and 14th salary around the world


Armenia13th only, paid before New Year holidays
GreecePaid in June, December, and an additional bonus for Easter
ItalyPaid in June and December
PortugalPaid in June and December
SpainPaid in June and December

Latin America

Argentina13th only, split between June and December
Bolivia13th is tax free, 14th paid as mandatory bonus only if GDP over 4.5%
Brazil13th split across November and December, 14th paid in January
Colombia13th only, split between June and December
Costa Rica13th only, paid in December
Dominican Republic13th only, paid in December
Mexico13th only, paid in December
Ecuador14th mandatory, can be paid in one lump sum or in parts across the year
El Salvador13th, paid as Christmas bonus
Guatemala13th and 14th, paid in June and December
Honduras13th in December, 14th in July
Nicaragua13th only, paid in December
Panama13th paid in 3 parts in April, August, and December
Peru13th and 14th, paid in July and December
Uruguay13th, paid in two halves in June and December
Paraguay13th only, paid in December
Venezuela13th only, paid in December


India13th only, paid within eight months of the end of the financial year
Indonesia13th only, as religious holiday bonus (Tunjangan Hari Raya)
Philippines13th, paid either in December or split between May and November; additional 14th and 15th may be added
Saudi Arabia13th only, paid on Eid


Angola13th and 14th, as a vacation bonus and in December as Christmas bonus
Nigeria13th only, paid in December
South Africa13th 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 Gibson Watts 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.

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