Hiring Glossary

Employee Benefits & Leave Policies

14th Month Salary

The 14th month salary, similar to 13th month salary, is a form of additional compensation that employees can receive – it's usually equal to one month's pay. Employees with a 14th month salary will get two bonus payments in a year, on top of their normal salary. It's a less common practice than 13th month pay.

Milani Notshe

Research Specialist

Last Updated

August 6, 2025

Read Time

August 6, 2025

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what 14th Month Salary?

As a business owner or human resources manager, you may come across the term "14th month pay" in certain countries. This refers to an additional payment, often equivalent to one month's salary, provided to employees beyond their regular annual earnings and the 13th month pay. In some nations, such as Greece and Portugal, this payment is legally mandated, while in others, it is customary but not compulsory. Understanding the concept of 14th month pay is crucial for ensuring compliance with local labor laws and meeting employee expectations in different regions.

For example, in Greece, employers are required by law to provide a 14th month salary to employees. This is typically divided into two installments: the first, known as the "Easter Bonus," is paid around April, and the second is paid around July or August. Each installment is equal to 15 days' salary. Failure to comply with this requirement can result in legal penalties and negatively impact employee morale. Therefore, when managing a global workforce, it's essential to be aware of such practices to maintain compliance and foster positive employee relations.

Where Has 14th Month Pay Been Implemented?

Countries where 14th month pay has been implemented include:

  • Austria
  • Angola
  • Ecuador
  • Greece
  • Guatemala
  • Honduras
  • Italy
  • Peru
  • Portugal
  • Spain

Is 14th Pay Mandatory?

Some nations have adopted this practice as part of their mandatory employment regulations, such as Austria and Greece. In other countries, it's a non-mandatory contribution – for example, employers in Spain aren't required to pay a 14th salary, but it's a widespread practice.

In jurisdictions where it forms part of mandatory employment regulations, the 14th month pay is typically governed by local laws or collective bargaining agreements, and can form part of standard employment contracts that specifies employee salary.

Who Qualifies For It?

Eligibility for 14th month pay typically depends on local labor laws and company policies. In general, employees who are entitled to 14th month pay include regular, full-time employees who have worked for the company for at least one year.

However, temporary, contractual, and part-time employees may also qualify, depending on their employment agreement or the country’s regulations. Some countries, like the Philippines, mandate that employers provide 14th month pay to all eligible employees who have worked for at least a year, while others may only offer it at the employer’s discretion. It's always important to check the specific guidelines based on your local labor laws or company policies.

How is 14th Month Salary Calculated?

There are two common ways to calculate 14th month salary payment:

  • In addition to gross annual salary

Calculate 14th month pay by dividing an employee’s gross salary by 12. The 13th and 14th salaries are two additional payments of an employee’s usual monthly wage.

  • As part of gross annual salary

Calculate 14th month pay by dividing an employee’s gross salary by 14. The bonus payments are taken from the gross annual salary.

It varies by country when the bonus payments are distributed, but the 14th month pay is typically paid out in summer months as opposed to an end-of-year or Christmas bonus (the 13th month pay).

Tip: Use Playroll's free employee cost calculator to get an exact breakdown of cost in countries where 14th month pay is mandatory or commonplace.

Calculation Methods

Both salaries are typically calculated as one month’s salary, but methods vary by country and employer:

  • Standard Method: Divide the annual salary by 12 to determine the monthly salary, then add the 13th and/or 14th month as separate payments equivalent to one month’s salary.
  • Pro-Rated Method: Divide the annual salary by 13 or 14, incorporating the bonus into the monthly salary distribution.
  • Local Legal Formula: May exclude bonuses or allowances, using only base pay, and prorate payments for employees who haven’t worked a full year. For example, in Italy, the 14th month for executives may be seniority-based (Playroll HR Glossary).

Differences Between 14th Month and 13th Month Pay

In HR and payroll contexts, the 13th and 14th month salaries are additional payments provided to employees beyond their standard 12-month salary. While both serve as bonuses, they differ in purpose, legality, timing, and global prevalence. Below is a detailed comparison to clarify these distinctions.

  • Mandatory vs. Discretionary: The 13th month salary is more likely to be a legal obligation, ensuring employees receive a standardized bonus. The 14th month salary is typically at the employer’s discretion, except in specific countries where it is mandated or customary.
  • Frequency and Timing: The 13th month is a single year-end payment, while the 14th month adds an additional bonus, often mid-year, aligning with events like summer vacations or religious holidays.
  • Global Practice: The 13th month is a well-established practice in regions like Asia (e.g., Philippines, Indonesia), Latin America (e.g., Argentina, Brazil), and parts of Europe. The 14th month is less widespread, with notable adoption in countries like Greece, where it supports seasonal expenses, or Bolivia, where it is tied to economic performance.

14th Month Pay FAQs

Is 14th month pay the same as holiday pay?

No, the 14th-month pay is not the same as holiday pay.

  • 14th Month Pay: This is a form of extra compensation typically given to employees in some countries, like the Philippines, as an additional bonus or salary equivalent to one month's pay. It's usually provided at the end of the year and is not related to work on holidays. It’s essentially an additional payment as a form of gratitude or reward for the employee’s service throughout the year.
  • Holiday Pay: On the other hand, holiday pay is a special pay provided to employees who work on official holidays. It’s usually a premium rate (like double time or a specific percentage of the regular salary) for working on days designated by the government as holidays.

How is 14th month pay calculated?

The 14th month pay is typically calculated by dividing an employee’s total basic salary for the year by 12. It is equivalent to one-twelfth of the total basic salary an employee earns over the course of the year, including all regular monthly wages. For example, if an employee earns $1,000 per month in basic salary, their 14th month pay would be $1,000 (total basic salary for 12 months) divided by 12, resulting in $1,000. This payment is usually provided at the end of the year, often in December, and is separate from other bonuses or allowances.

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ABOUT THE AUTHOR

Milani Notshe

Milani is a seasoned research and content specialist at Playroll, a leading Employer Of Record (EOR) provider. Backed by a strong background in Politics, Philosophy and Economics, she specializes in identifying emerging compliance and global HR trends to keep employers up to date on the global employment landscape.

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