Holiday Bonus Requirements from Around the World
By Christina Caamano, Director, Radius
Many American workers with generous benefits packages may be surprised to hear that US labor laws do not mandate paid time off for vacation or holidays. This is in strong contrast to other developed nations. As a 2013 report from the Center for Economic and Policy Research notes: “The United States is the only advanced economy in the world that does not guarantee its workers paid vacation.” That report indicates that nearly one in four Americans has no paid vacation days or holidays.
Around this time of year, workers in many countries are looking forward not only to some paid time off, but to an additional employee right that is virtually unheard of in the US: A “13th month” bonus. This bonus—sometimes referred to as a “holiday” bonus—is typically paid at the end of the year and at the same rate as the worker’s normal salary. Again, in certain countries this is not a perk but a requirement under local labor law. Austria has this requirement, for example, and the 13th month bonus in that country is even taxed at a lower rate than the worker’s typical salary payment, further enhancing the benefit.
This holiday season, we thought it might be interesting to list a few countries that offer a 13th month bonus, along with some related country-specific information. The following bonuses are given to workers in their respective countries in addition to their regular salaries. In some cases, an employee may be given a performance bonus in addition to the mandatory 13th month bonus.
- Argentina: Workers receive a 13th month bonus, paid over two installments in June and December. The amounts are based on 50% of the highest monthly salary received in the prior six months.
- Brazil: Workers are paid a 13th month bonus (commonly called the “Christmas bonus”) in two installments, the first typically no later than November 30, the second no later than December 20.
- Greece: Workers are entitled to a half month’s pay at Easter and a half month’s pay upon summer vacation. Workers also receive an additional month’s pay at Christmas—making Greece’s annual December holiday bonus in effect a “14th month” bonus.
- Philippines: Rank-and-file (i.e. not “managerial,” as defined by Philippine law) workers who have worked at least one month in a calendar year receive a 13th month bonus, based on the employee’s basic salary and other factors. It must be paid no later than December 24 each year, and one half of the payment may be paid before the opening of the school year.
- Angola: Workers are entitled to a 13th month holiday bonus, which until recently had been completely tax-exempt.
The list above is reflective of a larger truth that’s extremely important for US companies to bear in mind when considering overseas expansion. That is, each country has its own unique suite of labor laws, many of which can be quite different from US laws and must be managed in accordance with local labor practices to ensure you maintain locally compliant operations.