Difficulty in managing local payroll requirements, such as 13th month salary obligations, are one of the reasons many expanding companies decide to outsource their payroll.  In some countries, 13th month salary is calculated as a proportion of the annual salary (i.e. the annual salary, plus one 12). In other countries, the 13th month payment is already factored into the annual salary, so monthly salary payments are reduced accordingly (compared to what they would be if there was no ’13th month).