13th-Month Salary Across Latin America
The 13th-month salary, also known as the « Christmas bonus, » is a widely recognized employee benefit across Latin America. This mandatory payment often aligns with the holiday season and significantly impacts employee satisfaction and financial planning. For employers, understanding the regulations governing this bonus is essential to ensure compliance and foster positive workplace relationships.
Key Takeaways
✔️ The 13th-month salary is mandatory in most Latin American countries.
✔️ Payment deadlines and calculation methods vary by country.
What Is the 13th-Month Salary?
The 13th-month salary is an extra month’s wage paid to employees, usually at the end of the year. This benefit aims to assist workers in covering year-end expenses, such as holiday spending and outstanding debts. Despite being a common practice across the region, the terms of payment vary significantly by country.
What about 14th-Month Salary in Latin America?
While the 13th-month salary is common across Latin America, some countries also mandate a 14th-month salary. This additional benefit, often referred to as a mid-year bonus, further supports employees financially. Its payment and purpose vary by country, but it typically aligns with local labor laws to enhance employee satisfaction and welfare.
Country-Specific Regulations
Brazil
The 13th-month salary is divided into two equal installments. Employers must pay the first half by November 30 and the second half by December 20. The amount is calculated based on the employee’s monthly salary, prorated for those who have not completed a full year of service.
Learn more about the 13th-month Bonus in Brazil.
Mexico
In Mexico, employers must pay the aguinaldo by December 20. The bonus is equivalent to 15 days of salary for a full year of work. Employees who have worked less than a year are entitled to a prorated amount.
Learn more about the Aguinaldo in Mexico.
Argentina
Argentina mandates the payment of the Sueldo Anual Complementario (SAC) in two parts: the first half by June 30 and the second half by December 18. Employers calculate the bonus as 50% of the highest monthly salary received in each semester, as outlined in Law No. 23,041.
Colombia
Under Colombian law (Law 50 of 1990, Article 306), employers must pay the 13th-month salary in two installments: 50% by June 30 and the remaining 50% by December 20. This benefit applies to all employees, including domestic workers.
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13th and 14th-Month Salaries Across Latin America
Here’s a comprehensive overview of countries in Latin America and whether they mandate 13th and/or 14th-month salaries:
| Country | 13th-Month Salary | 14th-Month Salary | Details |
|---|---|---|---|
| Argentina | Yes | No | Paid in two installments (June 30 and December 18) based on the highest monthly salary in the semester. |
| Bolivia | Yes | No | Paid annually by December 20. |
| Brazil | Yes | No | Paid in two installments (November 30 and December 20). |
| Chile | Yes | No | Typically included in collective bargaining agreements (not mandatory). |
| Colombia | Yes | No | Paid in two installments (June 30 and December 20). |
| Costa Rica | Yes | No | Must be paid by December 20, calculated based on the year’s total earnings. |
| Dominican Republic | Yes | Yes | 13th-month salary paid by December 20; 14th-month salary known as « Regalía Pascual » is paid mid-year. |
| Ecuador | Yes | Yes | 13th-month salary due by December 24; 14th-month salary aligns with the school year. |
| El Salvador | Yes | No | Paid by December 20. |
| Guatemala | Yes | Yes | 13th-month salary paid by December 15; 14th-month salary (« Bono 14 ») paid by July 15. |
| Honduras | Yes | No | Paid by December 20. |
| Mexico | Yes | No | Aguinaldo must be paid by December 20, equivalent to at least 15 days of salary. |
| Nicaragua | Yes | No | Paid by December 10. |
| Panama | Yes | No | Paid in three installments in April, August, and December. |
| Paraguay | Yes | No | Paid by December 31. |
| Peru | Yes | Yes | 13th-month salary paid in July and December; 14th-month salary is a « Gratificación Extraordinaria. » |
| Uruguay | Yes | No | Paid in two installments in June and December. |
| Venezuela | Yes | No | Typically included in collective bargaining agreements (not mandatory by law). |
How to Calculate the 13th-Month Salary
Step 1: Determine If You Need to Offer the Benefit
Start by confirming whether the 13th-month salary is mandatory in the country where you operate. For instance, countries like Brazil and Argentina require this payment, while others may not. If it’s optional but you still wish to offer it, discuss the benefit with your employees.
Step 2: Gather All Necessary Payroll Data
Before calculating the 13th-month salary, collect all relevant information. This includes payslips, tax forms, and records of gross salaries, overtime hours, and bonuses. These details ensure accuracy and compliance with local labor laws. Proper documentation will streamline the calculation process and help you avoid potential disputes.
Step 3: Calculate Using the Appropriate Formula
The calculation typically depends on the employee’s monthly base salary and the duration of employment within the calendar year and the country regulations. Here’s a general formula:
For instance, in Brazil, if an employee earns R$3,000 per month and has worked for six months, their prorated 13th-month salary would be R$1,500.
Employers should also consider allowances, overtime, and bonuses, depending on local laws. In some countries, such as Argentina, only the highest monthly salary during the semester is used for calculations.
Payment Deadlines of the 13th-Month Salary Across Latin America
Strict deadlines govern the payment of the 13th-month salary. Missing these deadlines can result in penalties, fines, or employee disputes. Below are some common deadlines:
- Mexico: December 20
- Brazil: November 30 (first installment), December 20 (second installment)
- Argentina: June 30 and December 18
- Colombia: June 30 and December 20
Employers must stay updated with these dates to ensure compliance and maintain good employee relations.
Legal Requirements and Enforcement
Failure to comply with 13th-month salary regulations can result in legal consequences. For example:
- In Mexico, Article 87 of the Federal Labor Law outlines penalties for non-compliance, including fines.
- Brazilian labor courts enforce the Décimo Terceiro Salário rigorously, with companies facing lawsuits for late or incomplete payments.
Employers should consult local labor experts or legal counsel to navigate these obligations effectively.
Challenges and Best Practices for Employers
Managing the 13th-month salary across multiple countries can be challenging, particularly for multinational companies. Here are some best practices:
- Standardize Processes: Use payroll software to automate calculations and ensure compliance.
- Engage Local Experts: Partner with local HR and legal experts to navigate complex regulations.
- Communicate Clearly: Inform employees about their entitlements and payment schedules to build trust.
FAQ
Are part-time employees entitled to a 13th-month salary?
Yes, part-time employees are typically eligible for a prorated 13th-month salary based on the hours worked, as specified in local labor laws.
How does the 13th-month salary differ from bonuses?
Unlike discretionary bonuses, the 13th-month salary is a mandatory benefit enforced by law in most Latin American countries.
Do remote workers qualify for the 13th-month salary?
Yes, remote workers are entitled to the 13th-month salary if they have an employment contract governed by local labor laws.
What happens if an employee resigns before the payment date?
In most cases, the employee is entitled to a prorated amount of the 13th-month salary, calculated based on the duration of their employment during the year.
Conclusion
The 13th-month salary is a cornerstone of labor law across Latin America, reflecting the region’s commitment to employee welfare. Employers must understand and comply with country-specific regulations to avoid penalties and maintain employee satisfaction.
By working with experienced partners like Europortage, businesses can navigate these complexities with ease and focus on growth.
