13th-month salary in Brazil: 5 facts you must know
The Aguinaldo, or Christmas bonus, is a mandatory annual payment in Mexico, serving as a cornerstone of employee benefits. Governed by the Federal Labor Law, it underscores the importance of fair compensation during the festive season. This guide will provide insights into its requirements, calculations, and impact on employer-employee relationships.
Key Takeaways
✔️ Mandatory Benefit: The 13th-month salary is a legal obligation for employers in Brazil.
✔️Payment Deadlines: Employers must pay in two installments—one by November 30th and the other by December 20th.
✔️ Calculation Basics: The amount equals one month’s salary, with taxes deducted in the second installment.
Is the 13th-month bonus mandatory in Brazil?
Yes !
The 13th-month salary, known as the “Decimo Terceiro,” is a legally mandated bonus in Brazil. Introduced in 1962 under President João Goulart, this payment ensures employees receive additional income during the holiday season. Unlike optional Christmas bonuses in other countries, this payment is compulsory under Brazilian Labor Law (CLT).
Who is eligible for 13th Month Salary in Brazil?
Any employee under CLT contract
Employees under a CLT contract (Consolidação das Leis do Trabalho) qualify for this benefit after completing 15 days of service. This includes rural, domestic, and urban workers. However, employees dismissed with cause are not entitled to the 13th-month salary.
Note: Independent contractors are not eligible, as the law applies strictly to formal employees.
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When Does the employer have to pay ?
Two installments paid before December 20th
Employers must pay the 13th-month salary in two installments:
- First installment: Between February 1st and November 30th.
- Second installment: By December 20th.
If the payment deadline falls on a holiday or weekend, employers must advance the payment. Failure to pay on time incurs legal penalties, including fines. Additionally, employees going on vacation can request the first installment in advance.
How to calculate your 13th-month bonus in Brazil?
The 13th-month salary is based on the employee’s gross monthly earnings over the year. It includes bonuses, overtime, and commissions. Employers deduct taxes, such as INSS (social security) and IR (income tax), from the second installment.
Calculation Steps 👣
- Determine Gross Pay: Add all monthly earnings, including bonuses and overtime.
- Divide by 12: Divide the annual earnings by 12 to find the gross monthly amount.
- Deduct INSS Contributions: Example: Let’s say the total gross amount divided by 12 is R$ 3.500,00. Calculation will be as follow:
- 1.412,00 x 7,5% = 105,90
- (2.666,68 – 1412,00) x 9% = 112,92
- (3.500,00 – 2.666,69) x 12% = 100,00
In total the INSS deduction will be 105,90 + 112,92 + 100,00 = 318,82
INSS table (2024)
| MONTHLY SALARY | RATE |
| Until R$ 1.412,00 | 7,5% |
| From R$1.412,01 to R$2.666,68 | 9,0% |
| From R$2.666,69 to R$4.000,03 | 12,0% |
| From R$4.000,04 to R$7.786,02 | 14,0% |
*updated 24/01/2024
- Deduct Income Tax (IR): Calculate after subtracting INSS. Example:
- Taxable base: R$3,181.18
- Apply 15% = R$477.18
- Deduct R$381.44 (from tax table)
Total IR = R$95.74
IR table (2024)
| CALCULATION BASIS | RATE | DEDUCTION |
| Until R$ 2.259,20 | 0,00% | R$ 0,00 |
| From R$ 2.259,21 to R$ 2.828,65 | 7,50% | R$ 169,44 |
| From R$ 2.828,66 to R$ 3.751,05 | 15,00% | R$ 381,44 |
| From R$ 3.751,06 to R$ 4.664,68 | 22,50% | R$ 662,77 |
| Above R$ 4.664,68 | 27,50% | R$ 896,00 |
* updated 01/2024
- Calculate Net Pay: Subtract INSS and IR from gross pay. Example: Net pay = R$3,500 – (R$318.82 + R$95.74) = R$3,085.44
Paying the 13th-Month Salary in Two Installments
First Installment:
Calculate 50% of the gross monthly pay. Example: R$3,500 / 2 = R$1,750.Second Installment:
Subtract taxes and the first installment from the gross pay.
Example: R$3,500 – R$318.82 – R$95.74 – R$1,750 = R$1,335.44.
Conclusion
Understanding the 13th-month salary in Brazil is crucial for employers to ensure compliance and maintain employee satisfaction. With clear deadlines, precise calculations, and adherence to labor laws, businesses can foster trust and avoid legal complications.
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