<p>The reasons are probably manifold, especially in countries where this is mandatory.</p>
<p>When the payout is not mandatory: a possible reason is that (in some cases) the 13th month salary is only payed in full to workers who have worked the full year at the company; new workers are given a 13th month payout proportional to their time at the company that year. This can provide an incentive against quitting mid-year.</p>

CC BY-SA 4.0
2022-11-14T12:20:54.813Z
2022-11-14T12:20:54.813Z
Giskard
<p>In many countries, it is either compulsory or customary to give out a 13th salary at the end of the year, equal to the monthly salary the rest of the year. There are plenty of historical explanations online as to why this came to be, which all state something along the lines of &quot;someone started doing it and then everyone followed suit to remain an attractive employer&quot;.</p>
<p>What I'm puzzled about is why on Earth not simply raise base pay instead of handing out a 13th salary? A 13th salary just seems like such a random thing to do...</p>

CC BY-SA 4.0
2022-11-13T20:49:51.497Z
I don't think it can be explained rationally. There are almost as many different versions of the 13th (and 14th) salary as countries doing it. Sometimes it's mandatory, sometimes part of collective bargaining without any legal basis, sometimes seen as a bonus, which usually allows favourable tax treatment .... Usually, it is seen as extra money for holiday and Christmas, which I interpret as showing people are assumed to be unable to save.
Alex
<wages>
Why pay a 13-month salary instead of just increasing base pay?
David Cian
# Why pay a 13-month salary instead of just increasing base pay?

(Asked by: username_0 on 2022-11-13)

In many countries, it is either compulsory or customary to give out a 13th salary at the end of the year, equal to the monthly salary the rest of the year. There are plenty of historical explanations online as to why this came to be, which all state something along the lines of "someone started doing it and then everyone followed suit to remain an attractive employer".

What I'm puzzled about is why on Earth not simply raise base pay instead of handing out a 13th salary? A 13th salary just seems like such a random thing to do...

**Tags:** wages
> **Comments:**
> **username_1**: I don't think it can be explained rationally. There are almost as many different versions of the 13th (and 14th) salary as countries doing it. Sometimes it's mandatory, sometimes part of collective bargaining without any legal basis, sometimes seen as a bonus, which usually allows favourable tax treatment .... Usually, it is seen as extra money for holiday and Christmas, which I interpret as showing people are assumed to be unable to save.  

---

## 1 answers

### Answer by username_2 on 2022-11-14. Score: 2

The reasons are probably manifold, especially in countries where this is mandatory.

When the payout is not mandatory: a possible reason is that (in some cases) the 13th month salary is only payed in full to workers who have worked the full year at the company; new workers are given a 13th month payout proportional to their time at the company that year. This can provide an incentive against quitting mid-year.


---

