The 13th and 14th salaries have an unusual history. What began as Christmas gratuities, holiday allowances and negotiated benefits became statutory employment rights in some countries and obligations under collective agreements in others. Brazil and the Philippines require a 13th salary by law; Spain guarantees two additional payments, while Austria’s 13th and 14th salaries depend primarily on collective agreements. Germany has no general statutory requirement, although contracts and established employer practices can create an entitlement.
These differences extend beyond the number of payments employees receive. They affect how annual salaries are negotiated, which earnings count towards additional payments, when liabilities accrue and how much an international hire ultimately costs.
How 13th and 14th month pay became employment rights
The 13th salary has its roots in Christmas gratuities, holiday allowances and collective bargaining. Payments once made as seasonal gifts or rewards for service gradually became negotiated employment benefits and, in many countries, statutory entitlements.
The transition accelerated during the twentieth century. Some governments introduced mandatory payments to protect purchasing power during periods of inflation. Others incorporated established employer practices into labour legislation. European collective bargaining produced another path, with additional salaries negotiated at sector level.
The history explains why these payments still carry different legal obligations.
| Country | When | The story behind the extra salary |
|---|---|---|
| Italy | 1937–1960 | Italy was among the pioneers. A 1937 collective agreement introduced the tredicesima for industrial white-collar workers. Its coverage expanded over the following decades, including through a 1960 decree extending industrial collective agreements. The 14th salary took a different path and remains largely a sector-negotiated benefit. |
| Spain | 1944–1980 | Spain’s extra payments carry an unusual political history. Christmas bonuses became compulsory for certain workers in 1944, while a second payment became associated with 18 July, the anniversary of the 1936 military uprising under Franco. Both survived Spain’s transition to democracy and became the familiar summer and Christmas payments. |
| Argentina | 1945–1946 | Argentina’s aguinaldo became a landmark in Juan Perón’s labour policies. Introduced under President Farrell in December 1945, the compulsory Christmas payment formed part of a broader effort to improve workers’ incomes. It became one of the enduring features of Argentine employment law. |
| Brazil | 1962–1965 | Brazil’s 13th salary emerged from years of trade union campaigning. President João Goulart signed it into law in 1962, transforming Christmas bonuses into guaranteed remuneration. A 1965 law established the familiar system of an advance payment followed by a December settlement. |
| Mexico | 1970 | The aguinaldo evolved from a Christmas gratuity into a legal obligation under the 1970 Federal Labour Law. The minimum was set at 15 days’ salary, a threshold that has remained in place for decades. |
| Philippines | 1975 | Inflation was central to the decision. Ferdinand Marcos introduced mandatory 13th-month pay in December 1975, explicitly citing the erosion of workers’ purchasing power and the financial demands of Christmas. |
| Greece | 1980–1981 | Greece developed a distinctive combination of Christmas, Easter and holiday payments. Legislation and ministerial rules adopted in 1980–1981 consolidated entitlements already rooted in the country’s employment system. Together, the payments can amount to two additional monthly salaries annually. |
| Austria | Collective bargaining tradition | Austria’s 13th and 14th salaries became standard through agreements negotiated between employers and trade unions. Holiday and Christmas payments are widespread, although their legal basis remains the applicable collective agreement or employment contract. |
| Germany | Collective bargaining tradition | Germany followed a more decentralised approach. Christmas pay, or Weihnachtsgeld, developed through employer traditions, collective agreements and individual contracts. Even a payment originally described as voluntary can become enforceable through established company practice. |
The historical motivations differed, but their legacy is common: an additional component of annual remuneration with country-specific rules governing eligibility, calculation and payment.
Annual gross salary vs. monthly pay: the cost difference
An annual gross of €70,000 arrives as 12 payments of approximately €5,833 in one market and 14 payments of €5,000 in Austria, assuming two additional payments of equal value.
Both figures describe the same annual salary. A monthly benchmark used across Brazil, Spain and Austria, however, can compare unlike numbers. An offer pitched on the monthly figure can land 14–17% above or below the intended annual budget.
For example, a €5,000 monthly salary produces €60,000 over 12 payments and €70,000 over 14. The difference is 16.7% of the 12-payment figure.
The distinction also matters when calculating total employer cost. Annual gross salary represents the employee’s remuneration before deductions. Total employer cost includes employer social contributions and other mandatory employment expenses. Additional salary payments may already form part of the agreed annual gross or increase compensation beyond the quoted base, depending on the country and the terms of the offer.
Employers that specify annual gross salary, payment frequency and the treatment of additional payments give candidates a clear package and finance a reliable figure to forecast.
13th month pay: statutory, collective and contractual rights
The legal source determines whether an extra payment is mandatory, how it is calculated and how much flexibility employers have over its timing.
Statute. Brazil, Mexico, Peru, Greece and the Philippines establish additional remuneration entitlements through legislation. The applicable law determines eligibility, minimum amounts, calculation rules and payment deadlines. Contractual arrangements can provide more favourable terms.
Statute and collective agreements. Spain’s Workers’ Statute (Article 31) guarantees two extra payments a year, one at Christmas. The applicable collective agreement determines their amount and may allow employers to spread the payments across 12 monthly salaries.
In Austria, 13th- and 14th-month salaries arise primarily from sector collective agreements and employment contracts. Although general legislation does not mandate these payments, collective agreement coverage is extensive, making holiday and Christmas salaries standard across much of the workforce.
Contract and established practice. Germany has no general statutory entitlement to Christmas pay. An enforceable right can arise from a collective agreement, works agreement, employment contract or established company practice. Repeated payments without an effective reservation can create a continuing obligation. In a 2009 ruling, the Federal Labour Court addressed the limits of introducing a voluntary-payment reservation after an entitlement had arisen.
An additional payment that begins as an employer benefit can therefore become an enforceable salary obligation. Its legal foundation influences offer design, payroll treatment and the employer’s continuing liabilities.
How commissions and variable pay affect 13th month calculations
The calculation base determines how much a commission-heavy role costs.
In Brazil, the 13th salary includes relevant variable earnings such as habitual overtime, commissions and applicable premiums. A sales employee’s additional payment can therefore rise with earnings throughout the year.
Peru applies averaging rules to qualifying variable remuneration. For employees paid through commissions, the calculation considers earnings over the relevant reference period. The resulting gratificación may exceed the employee’s fixed monthly salary.
The Philippines calculates statutory 13th-month pay as one-twelfth of the employee’s annual basic salary. Overtime, premium and holiday pay, night differentials and allowances outside basic salary are generally excluded, unless an agreement or established practice provides otherwise.
The statutory entitlement covers rank-and-file employees. Classification depends on the employee’s actual duties and authority under the Labor Code, including powers over management policies and personnel decisions. A managerial job title alone does not establish an exemption.
Two hires on similar compensation packages can consequently generate different additional salary costs.
For employers hiring sales executives, regional managers and other employees with variable remuneration, accurate budgeting requires the local calculation base to be applied to each component of pay.
Pro-rata entitlements and final settlement liabilities
Additional salary payments accrue over the employment period, so start dates, transfers and departures affect the amount owed.
Brazil calculates the 13th salary proportionately, generally at one-twelfth for each qualifying month of service. Mexico pays a proportional aguinaldo to employees with less than a full year’s service, including those whose employment ends before December. Spain, Austria and Peru also require accrued entitlements to be addressed in final settlements according to their respective rules.
An employee leaving in September may still be owed a proportion of an additional payment scheduled for December.
The amounts become consequential in acquisitions, provider transitions, restructures and fixed-term projects. An acquired workforce may carry accrued salary liabilities into the transaction. A mid-year transfer between employment providers requires a clear reconciliation of payments made, amounts accrued and obligations remaining with each employer.
An exit budget that omits these entitlements understates the cost of the employment change.
Monthly accruals give finance visibility over the liability throughout the year. Settlement calculations then establish the employee’s entitlement at the point the employment relationship ends or changes.
December payroll deadlines and cash flow planning
Across an international workforce, additional salary payments concentrate in two periods.
Mid-year brings Austria’s holiday salary, commonly paid around June, and Peru’s July gratificación, due by 15 July.
December brings several statutory deadlines within three weeks:
- Peru: Christmas gratificación by 15 December.
- Mexico: Aguinaldo before 20 December.
- Brazil: Second 13th-salary instalment by 20 December, following the first instalment due by 30 November.
- Greece: Christmas bonus by 21 December.
- Philippines: 13th-month pay by 24 December.
In several markets, these payments can bring the month’s gross payroll to approximately twice its usual level for qualifying employees.
For an enterprise operating across multiple countries, the annual payroll budget must translate into a funding calendar that accounts for statutory deadlines, local banking days and the size of each payment.
A company may have sufficient annual budget approval and still face a concentrated cash requirement in December. Country-level payroll forecasting makes that requirement visible well before payments fall due.
13th and 14th month pay requirements by country
The legal source, calculation base and payment date determine how additional remuneration enters each country’s employment cost.
| Country | Extra payments | Legal source | Amount | Payment timing |
|---|---|---|---|---|
| Austria | 13th and 14th salary | Sector collective agreements and contracts | Commonly one monthly salary each, subject to the applicable agreement | Holiday and Christmas payments, commonly June and November–December |
| Brazil | 13th salary | Law 4.090/1962 | Generally one monthly salary, including relevant variable remuneration | Advance by 30 November; balance by 20 December |
| Germany | Christmas pay | Collective agreement, works agreement, contract or established practice | As agreed | As agreed |
| Greece | Christmas bonus, Easter bonus and holiday allowance | Statutory and regulatory provisions | Generally one month, half a month and half a month respectively for qualifying employees | Christmas by 21 December; other payments on their respective schedules |
| Mexico | Aguinaldo | Federal Labour Law, Article 87 | Minimum 15 days’ salary, proportionate to service | Before 20 December |
| Peru | Two gratificaciones | Law 27735 and applicable employment regime | Generally one monthly salary each under the general private-sector regime, plus a 9% extraordinary bonus, or 6.75% with qualifying private health cover | By 15 July and 15 December |
| Philippines | 13th-month pay | Presidential Decree 851 | One-twelfth of annual basic salary for eligible rank-and-file employees | By 24 December |
| Spain | Two pagas extraordinarias | Workers’ Statute, Article 31, and collective agreements | As set by the applicable agreement; may be distributed across 12 months where permitted | One at Christmas; the second as the agreement sets |
Peru’s enterprise-size exception: Employees under the qualifying small-enterprise labour regime generally receive half a monthly salary for each gratificación. Employees under the qualifying microenterprise regime generally have no statutory entitlement to these payments. The employer’s registration, applicable labour regime and employee’s terms must be checked before calculating the benefit.
The comparison reflects general private-sector rules. Individual entitlements depend on the applicable employment regime, sector, collective agreement, remuneration components and period of service.
From annual compensation to actual employment cost
A 13th or 14th salary can represent an additional employment cost or form part of an agreed annual package. The distinction depends on local law, collective agreements and the terms of employment. Variable remuneration, employer contributions and statutory payment schedules add further considerations to the calculation.
For an enterprise planning international hires, these details influence salary approvals, employment budgets and cash flow. They also determine the liabilities that must be recognised when employees join, transfer or leave.
Acumen International brings country-specific employment expertise into these decisions before the hiring commitment is made. Our Global Payroll Calculator provides employment cost estimates across 190+ countries, supported by our specialists’ assessment of applicable remuneration and payroll requirements.
Through our Global Employer of Record service, we take responsibility for the local employment relationship, including statutory salary payments, payroll obligations and final settlements. Companies gain a clear understanding of the financial commitment behind each international hire, backed by the expertise to manage it throughout employment.
Sources
Historical development
- Italy: Why the 14th Month Is Not Paid to Every Employee
- Spain: The History of Extra Salary Payments in Spain
- Argentina: Decree-Law 33.302/1945
- Brazil: Law 4.090/1962; Law 4.749/1965
- Philippines: Presidential Decree 851/1975
- Greece: Holiday Allowances
- Austria: Christmas and Holiday Pay
Employment rules and calculations
- Germany: Weihnachtsgeld; Federal Labour Court Judgment, 18 March 2009
- Mexico: Federal Labour Law
- Peru: Christmas Gratificación Guidance
- Philippines: 13th-Month Pay Calculation
- Spain: Workers’ Statute, Article 31
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