Thirteenth salary
A thirteenth salary, or end-of-year bonus, is an extra payment given to employees at the end of December. Although the amount of the payment depends on a number of factors, it usually matches an employee's monthly salary and can be paid in one or more installments (depending on country). History. In Italy it was originally named "'gratifica natalizia"' ("Christmas bonus") being a voluntary donation without any obligation that the employer recognized to its employees when entering the Christmastide and was legalized in the 1937 collective labour agreement for factory labour and was extended to all  kind of works in 1946 and by presidential decree in 1960. In the Philippines it was legalized in December 1975 responding the problem of update the minimum wage. The minimum wage had not been raised for five years, and no longer matched the cost of living. President Ferdinand Marcos issued Presidential Decree No. 851 (at this time Marcos ruled by decree without a legislature), ordering employers to pay a thirteenth salary to improve the situation to employees who are earning less than 1,000 pesos per month, at that time a princely sum. The decree notably excluded employees of the government  and its instruments. With the removal of Marcos, his successor Corazon Aquino removed the 1,000 limit in 1986, giving the privilege to all private sector employees. Two years later, Aquino signed Republic Act No. 6686, extending the privilege to government employees. Compensation based on annual work was paid in addition to the basic salary on the basis of the decision of the Central Committee of the Communist Party of the Soviet Union and the Council of Ministers of the USSR on 4 October 1965 ("On improving planning and enhancing economic incentives for industrial production"). Paid from the material incentive fund , the amount of funds was determined by the administration in conjunction with the Central Committee. If a company fulfilled (or exceeded) annual plans for the sale of products (or profits) and estimated profitability, the thirteenth salary could be paid from funds earmarked in the budget and other cash reserves. If a company did not meet the targets, a reduced amount was paid. In Switzerland , the 13th month salary began to impose itself at the end of the 1960’s, even if it started to spread before. Conflicts took place concerning the time schedule of payment, as workers wanted regular payments  and employers were more comfortable with yearly or half-yearly payments. Many firms, like the Swiss Broadcasting Corporation decided to implement the 13th month salary to appear more attractive to skilled candidates. In Mauritius, the 13th month salary was implemented in December 1975, but many battles took place to achieve this goal. Every trade union centres, like the Federation of Civil Service Unions, had to fight together, using street campaigns and work stoppages. Around the 1970’s, the price of sugar skyrocketed and yet some of the companies in the sugar industry did not want to pay a 13th month  salary or bonus to its employees. From 1973 and onwards, under the pressure of the Sugar Industry Staff Employees Association (SISEA), a group of executives had to sign an agreement stating that a 13th month salary or bonus will be paid based on the yearly profits. However, for every other industry that the sugar industry, workers at that time could not benefit from a 13th month salary. Therefore, more protests in the streets happened. In 1975, with the help of Cyril Canabady, a lawyer, the government finally stated that every employer would have to pay a 13th month salary. Details . A number of countries followed the Philippines, enacting similar thirteenth-salary laws, and some have passed laws about fourteenth- and fifteenth-month pay. Some regions have a compulsory fourteenth salary. Brazil has a mandatory fourteenth-month salary, which is treated as a holiday bonus. The payment varies by country. Some have one payment at the end of the year, and others pay in two installments: one in the first half of the year and the other at the end of the year. This could motivate people to travel or otherwise enjoy summer holidays. Corporations that fail to make the payments  may be fined. Taxation. The thirteenth salary is normally tax-exempt, although some countries have restrictions; if the payment exceeds one month's salary, it could be taxable. Computation. The thirteenth salary is most frequently expressed as a one month's salary, or one-twelfth of the annual salary. Not all workers are guaranteed this amount, however; in Mexico, most people receive at least 15 days' wages. Prevalence. Europe. Germany. In Germany, a legal distinction is made between a thirteenth salary and a Christmas bonus; in most other countries, the terms are used interchangeably. The Christmas bonus (usually paid with  the November salary) is intended to pay additional holiday expenses and retain employees. The thirteenth salary is paid by an employer for ongoing work at the end of a calendar year. An employee is entitled to a prorated thirteenth salary if they leave their employer before the end of the calendar year, unless the parties to the employment contract have agreed otherwise. Special payments for regular work performance (a requirement fulfilled by the thirteenth salary, and the Christmas bonus in certain cases) can be counted towards the minimum wage. For example, a person works full-time and earns per hour  until a minimum wage of €8.50 per hour is introduced. Their employment contract stipulates that they are entitled to a half-month Christmas bonus and an annual holiday payment, totaling one month's salary. To meet the minimum wage of €8.50 (required by law in Germany since January 2015), the employer consolidates the holiday payment and Christmas bonus and pays one-twelfth of the amount to the employee every month. The employee's hourly wage would increase to €8.69, meeting the minimum wage. The Christmas bonus is part of the other-remuneration category, in accordance with §39b  Abs. 3 of the EStG. The Christmas tax allowance was abolished with the Tax Reform Act of 25 July 1988. Since July 2008, federal officials have no longer received Christmas bonuses; the special payments (Christmas and holiday bonuses), amounting to five percent of the annual salary, were integrated into the officials' base salary. Switzerland. Most Swiss employers pay their employees' annual salary in 13 instalments, rather than 12. An employee usually receives two months' salary in December, which helps pay end-of-year and holiday bills. Sometimes they receive half in July and half in December, however, similar to Germany 's Christmas bonus and holiday payment. The thirteenth monthly salary is not a bonus, but a delayed payment. Whether or not a thirteenth salary is paid is part of an employment contract; some companies pay a higher monthly salary instead of the additional payment. In the first and last years of employment, the thirteenth salary is prorated for partial years. Some employers pay an additional annual bonus based on employee performance or employer profits. When an employee pays direct income tax and the 13th month's salary and bonus are paid in the same month, a higher tax rate is  paid. Latin America. In Latin America, the thirteenth salary is commonly known as "aguinaldo" or "prima" in Spanish (bonus).