LATAM Countries where the Thirteenth Salary is Mandatory

Uncover the legal landscape of the thirteenth salary in Latin American countries. Explore the countries where this additional annual payment is mandatory, understanding its significance for employees and the obligations it imposes on businesses operating in these vibrant markets.
thirteenth salary latam
Written by
Ontop Team

Latin America is known for its vibrant culture, rich heritage, and colorful festivals. But did you know that some countries in this region have a unique mandatory law that ensures employees receive an additional annual payment? This extra payment, known as the thirteenth salary, has significant implications for businesses operating in these regions.

In this blog post, we will explore the Latin American countries where the thirteenth salary is mandatory, understanding its significance and its impact on the business landscape.

Brazil

Brazil is one of the prominent countries in Latin America where the payment of the thirteenth salary is mandatory. Established by law in 1962, this provision mandates that employees receive an additional payment equivalent to their monthly salary. The thirteenth salary is typically paid in two installments – one in November and the other in December, just in time for the Christmas season. This mandatory payment serves as a boost to the economy, as it injects additional income into the hands of millions of workers across the country.

Argentina

Argentina is another country in the region where the thirteenth salary is obligatory. Here, it is known as the Aguinaldo and has been a legal requirement since 1974. Similar to Brazil, the thirteenth salary in Argentina is paid in two installments, with the first payment due by June 30 and the second by December 18. The Aguinaldo is seen as an employee right, providing financial relief during the mid-year and holiday seasons. It also acts as a stimulus for consumer spending, benefiting businesses across various sectors.

Colombia

In Colombia, the payment of the thirteenth salary, also known as the Catorceavo, is mandatory. According to Colombian law, employees are entitled to receive this additional payment in the month of June each year. The Catorceavo is equivalent to one-twelfth of their annual salary and is paid in addition to the monthly salary. This payment enables employees to cover expenses such as education, health, and other pressing financial needs. For businesses operating in Colombia, the mandatory thirteenth salary serves as an important factor to consider when managing costs and planning for the year ahead.

Peru

Moving further south, we encounter Peru, another Latin American country where the thirteenth salary is obligatory. Known as the Gratificación, this payment is required by Peruvian law. Employees are entitled to receive an additional payment equal to one full monthly salary every December. The Gratificación has a significant impact on consumption patterns, as employees often use this extra income to buy gifts, travel, or engage in recreational activities during the holiday season. For businesses, understanding the timing and impact of the Gratificación is crucial, as it can directly influence sales and overall market dynamics.

Considerations

It is worth noting that while the thirteenth salary is mandatory in these countries, the specific regulations and implementation details may vary. Employers should consult local labor laws and seek appropriate legal advice to ensure compliance with the requirements in each jurisdiction.

In conclusion, the mandatory thirteenth salary in Latin American countries, such as Brazil, Argentina, Colombia, and Peru, plays a crucial role in ensuring financial stability for employees and stimulating economic growth. This additional annual payment serves as a boost to consumer spending, particularly during the holiday season, and has a direct impact on businesses operating in these regions. As companies navigate the complexities of operating in Latin America, understanding and complying with the laws regarding thirteenth salary payments is essential to maintaining a harmonious and productive working environment.

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