Statutory bonuses around the world: 13th-month pay, aguinaldo, and year-end payments in 2026

Brazil’s 13th salary is mandated by Law 4.090/1962 and Law 4.749/1965. All employees under the CLT (Consolidação das Leis do Trabalho) are entitled. The calculation is 1/12 of December remuneration for each month of service, with a month counting if the employee worked at least 15 days. A full extra month is paid where the employee worked all 12 months.

Payment is in two instalments. The first is paid between 1 February and 30 November; the second is paid by 20 December. Both instalments are settled through payroll and reflected in FGTS and INSS filings. The 13th is proportional to termination.

Tax treatment: taxable income with INSS and FGTS contributions. Income tax (IRRF) is withheld on the second instalment under Brazil’s special rules for the 13th salary.

Under Article 87 of the Federal Labor Law, all employees (including domestic, temporary, and part-time workers) are entitled to a minimum of 15 days’ salary as the aguinaldo, payable by 20 December each year. Proportional entitlement applies when service is less than a year, calculated as daily wage × 15 × days worked / 365.

Tax treatment: taxable as employment income, with amounts up to 30 days of minimum wage exempt from income tax and excess taxable. Failure to pay attracts fines ranging from 50 to 5,000 times the daily minimum wage.

Governed by Law 2412 (the private-sector Christmas bonus law). The calculation is 1/12 of all ordinary and extraordinary wages earned from 1 December of the prior year to 30 November of the current year. Payment is due within the first 20 days of December. All workers with at least one month of continuous service are covered, with proportional entitlement for less-than-annual service.

Tax treatment: exempt from income tax within statutory limits and generally excluded from the social security or severance base.

The Argentine complementary annual salary is equal to 50% of the highest monthly remuneration received in each semester, paid in two halves in June and December. Proportional entitlement applies on termination for any fraction of a semester worked. All employees are covered regardless of weekly hours.

Tax treatment: taxable salary subject to social security and income tax.

An additional month’s salary after one year of continuous work, prorated for shorter service. Payment is due within the first 10 days of December. Each day of delay triggers compensation equal to one working day’s wage. Generally exempt from income tax and protected against attachment.

Under the Estatuto de los Trabajadores and applicable CBAs, Spanish employees receive two extraordinary payments in addition to their 12 monthly salaries. These are typically paid in the second half of June or July and around Christmas (20 to 25 December). Alternatively, the two extraordinary payments can be prorated over 12 monthly instalments where the CBA or contract permits.

Each extraordinary payment equals a monthly salary, though the specific composition (base only, or base plus certain allowances) depends on the applicable CBA. Employees receive proportional entitlement for partial-year service and on termination.

Tax treatment: part of annual employment income for IRPF, subject to social security contributions in the same way as regular salary.

Portugal’s Labour Code mandates both a Christmas bonus and a holiday bonus, each equal to one month’s base pay (with specific rules for allowances). The holiday bonus is typically payable before the main vacation period. The Christmas bonus is usually paid by 15 December or with the November salary.

All employees are covered, with proportional entitlement for part-year employment or termination.

Tax treatment: taxed and subject to social security like a regular salary.

Rooted in law and implemented through national CBAs. The 13th month is generally 1/12 of the annual salary accrued each month, paid as an additional monthly salary at Christmas. Some sectors add a 14th-month payment through CBA. Accrual continues during certain protected absences (sickness, maternity) within statutory limits.

Tax treatment: taxable employment income; occasionally subject to special reliefs but with no permanent exemption.

Not a statutory obligation at the national level, but almost all employees are covered by sectoral collective agreements (Kollektivverträge) which mandate 13th and 14th salaries (Urlaubsgeld holiday pay and Weihnachtsgeld Christmas pay), each roughly equal to one month’s salary. Holiday pay is typically paid around June; Christmas pay is paid around November.

Tax treatment: within the annual Jahressechstel allowance, the first band is tax-free, and the remainder is taxed at a flat 6%, considerably below normal marginal rates. This preferential regime is one of the most favourable treatments of statutory-style bonuses globally.

Under Presidential Decree 851 and DOLE guidelines, all rank-and-file private-sector employees who have worked at least one month during the calendar year are entitled to at least 1/12 of their total basic salary earned. Payment is due not later than 24 December, though half may be advanced mid-year by agreement. Resigned or terminated employees receive proportional 13th-month pay based on basic salary earned to the date of separation.

Tax treatment: exempt from income tax up to a statutory ceiling on combined 13th-month pay and other benefits (currently in the range of PHP 82,000 to PHP 90,000 under TRAIN updates). Excess is taxable.

Under Government Regulation 36/2021 and Minister of Manpower Regulation 6/2016, Indonesian employees are entitled to a religious holiday allowance. For employees with at least 12 months of continuous service, THR equals one month’s salary. For 1 to 12 months of service, THR is prorated as (months of service ÷ 12) × one month’s wage.

THR must be paid at least 7 days before the employee’s religious holiday (Eid al-Fitr, Christmas, or another applicable holiday, depending on religion). All employees with at least one month of continuous service are covered, including permanent, fixed-term, daily, and part-time workers. Entitlement survives resignation or termination if at least one month has been worked.

Tax treatment: taxed as regular employment income. Late THR payment triggers an additional 5% penalty on top of the THR owed, plus potential administrative sanctions.

Not statutory. AWS is due only if the employment contract, CBA, or company practice provides for it, typically as one month’s basic salary paid in November or December. Where contractually established, proration rules for joiners and leavers apply on the same terms. Treated as taxable income subject to CPF contributions as part of additional wages.

Not statutory unless contractually guaranteed. Where a bonus is stipulated in the employment contract or established as custom, employees gain contractual entitlement, often subject to conditions such as being in employment on the payment date. Usually paid around Lunar New Year or at year-end. Taxable under Salaries Tax in the year of receipt.

Not statutory. Weihnachtsgeld arises from CBAs, individual contracts, or company practice. Amounts vary by sector, often a fraction or multiple of the monthly salary (25% to 100%). Where consistent company practice has established the payment, employees may gain enforceable rights even without an explicit contract clause. Typically paid with the November salary. Taxed as normal employment income with no specific statutory relief.

Double holiday pay is statutory for white-collar workers, equal to 92% of the monthly gross salary in addition to regular holiday-period pay. Year-end bonuses vary by sector CBA. Both are treated as taxable salary subject to Belgian social security, with specific withholding rules that can differ from ordinary pay.

The UAE does not mandate a 13th-month bonus. Instead, the Labour Law provides an end-of-service gratuity, paid on termination rather than annually. For employees with at least one year of service, the entitlement is 21 days of basic wage per year for the first five years and 30 days per year thereafter, capped at 24 months of wages. Special rules apply for different contract types and for early resignation or misconduct. The gratuity is not taxed in the UAE but may be taxable in the employee’s home jurisdiction.

The most common error is failing to distinguish between:

• Statutory year-end payments (Mexico aguinaldo, Philippines 13th-month, Indonesia THR, Brazil 13th salary).
• Collectively bargained or contractual bonuses that are not in national statutes but are binding through CBAs or contracts (Austrian KVs, German Weihnachtsgeld in sector CBAs, Singapore AWS in contracts).
• Purely discretionary bonuses, where the employer reserves the right to vary or cancel.

Mislabelling a statutory payment as discretionary does not remove the legal obligation. Conversely, labelling a discretionary bonus as a “13th month” in a contract can unintentionally create a contractual right in countries where no statute exists.

Many regimes attach explicit penalties to late or missing payments:

• Mexico: Fines from 50 to 5,000 times the daily minimum wage for failure to pay Aguinaldo. Workers can file claims through PROFEDET or labour boards.
• Costa Rica and Nicaragua: Failure to pay on time is treated as wrongful withholding of wages. Nicaragua adds statutory daily penalties.
• Philippines: DOLE emphasises “no delays allowed” past 24 December. Sanctions include administrative penalties and orders to pay, with reporting obligations on employers.
• Indonesia: Late THR payment triggers a 5% penalty on top of the THR owed, plus potential administrative sanctions.

When engaging remote workers through a workforce management platform, the foreign employer is exposed to the local statutory rules that apply through the local entity. Statutory bonuses cannot be waived by a foreign employer’s payroll policy where the employee’s home jurisdiction mandates them. Failing to budget for or approve these payments on time creates both a compliance breach and, in effect, a broken promise to the employee, since local expectations treat the payment as guaranteed.