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The Christmas season is getting closer. Employees eagerly await it each year for the holidays and the payment of the thirteenth month of salary, known as the Christmas bonus or “Aguinaldo.” This article advises what employers should consider when calculating the Christmas bonus in Costa Rica.
The Christmas season is getting closer, and there is little time until we begin seeing the placement of seasonal decorations in the streets of cities and towns in Costa Rica. This is a signal that December is just around the corner.
Many Costa Ricans eagerly anticipate this month for the holidays and the extra money they receive as workers. Given that the yuletide season will soon be upon us, now is an excellent time to review the details of how to calculate the Christmas bonus in Costa Rica.
According to estimates from the latest Continuous Employment Survey from the National Institute of Statistics and Censuses (INEC), the labor force in Costa Rica consists of 2.2 million workers. Therefore, as of December 1, all public and private sector workers will begin to receive bonuses from the companies that are doing business in Costa Rica.
Eric Briones, an expert in Costa Rican labor law, explains that this is an inalienable right for any employee, whether in the formal or informal sector of the economy. Three laws mandate the payment of the Christmas bonus in Costa Rica. They are Payment of Christmas Bonus for Public Servants, Bonus Payment to Servants of Autonomous Institutions, and Bonus Payment to Servants of Private Companies. These statutes were published in 1954, 1955, and 1959, respectively.
According to the specialist, people who qualify for a Christmas bonus in Costa Rica must comply with some aspects of the employment relationship. The employee must have worked for at least one month to receive that benefit. This is regardless of whether the contract with the worker is for an indefinite period, a determined period, or days and hours of a week.
As December approaches, considerable doubts typically arise about the payment of the thirteenth month of salary, better known as the Christmas bonus in Costa Rica. With the input of Mr. Briones, some of the questions typically asked by the country’s employers are addressed in the text below.
How is the Christmas bonus in Costa Rica calculated?
Calculating the Christmas bonus is as follows: the worker must take all their gross wages, that is, without deductions, from December 2021 to November, and divide that total by the 12 months of the year. The final result will be the amount of the employee’s bonus.
It is important to beware because the bonus calculation must also include ordinary, extraordinary, and in-kind remuneration, such as overtime, days, and holidays. This is in addition to any other salary payment made in the period, such as additional bonuses and other paid incentives.
To do the calculation, the best way is to take all the pay stubs of the period covered or write on some paper or Excel sheet the wages earned in the 12 months. This is because the additional items are possibly already included in those amounts.
Let’s take an example: if a person has a gross monthly salary of ¢800,000; but received commissions for ¢30,000 after exceeding a certain amount of sales in April and July, they must record ¢830,000 as gross salary in those months. When doing the calculation, that person’s bonus would be ¢805,000
What happens if an employee receives a salary in kind?
If the person has a cash remuneration but also receives compensation in kind, this must be considered for the calculation. According to the Ministry of Labor and Social Security (MTSS), this remuneration must be calculated as a percentage, which must be stipulated in the employment contract.
If one was not established, the MTSS shows that it must be equivalent to up to 50% of what the worker receives in cash. The salary in kind includes items such as food, lodging, personal hygiene items, and others.
The National Women’s Institute has stated that this is usual in domestic work and has always emphasized that employers should include this remuneration in the bonus. Thus, a person who receives ¢250,000 monthly and has a salary in kind, whose percentage was not defined in the contract, must calculate an additional 50%. This would be ¢125,000, for a total of ¢375,000 bonus.
What if a worker has worked less than a year?
Current regulations establish that all workers who have worked for at least one month are entitled to receive a Christmas bonus in Costa Rica. However, it will be proportional to the time worked and must be calculated similarly, divided by 12 months.
If the person only worked six months, the calculation is done the same way: the six months’ wages received in that period are added and divided by the 12 months. “Employees are entitled to the bonus from the first month of the employment relationship, proportionally, including the ordinary and extraordinary part,” explained Briones.
What happens if the employee was terminated and rehired in the same year?
If the worker has been fired and rehired in the same year, the calculation is similar to that of people who worked less than one year. As explained by the labor lawyer, the employee will receive “two” bonuses in proportion to the work performed.
For example, if the person worked from December to March and was let go but then rehired in July, the person should have received a “first” bonus calculated from December to March, and, at the end of the year, compensation would correspond to the period from July to November.
“For example, the employee worked from December to March; the employer pays benefits with the four proportional months of Christmas bonus. Then when they are hired in July, and the relationship continues until December, the employee would be paid proportionally for those months worked, “said the expert.
What if a worker is disabled?
The employment contract is suspended if an employee is disabled (unpaid leave). However, the calculation does not consider the period when the person was incapacitated due to illness or disability. This is because it is assumed that he did not receive a salary but a “subsidy.”
“When a worker is disabled, they do not receive a salary. In that case, the calculation is affected because the worker receives a subsidy. So, if a person is disabled for two months throughout the year, that’s going to hurt them because those two months are not going to be added to the total calculation,” explained Briones.
What if an employee had maternity or paternity leave?
Regarding maternity or paternity leave, the amounts received do not vary since the payments received during that period are considered salary for all legal purposes. Therefore, they are included in the calculation of the Christmas bonus in Costa Rica.
What happens if a worker takes an unpaid leave?
If an employee requested leave without pay between December 1, 2021, and November 31 of the current year, the calculation applies similarly to a disability. This is because, at that time, the employee did not receive any economic remuneration from the employer.
As an example, if a person receives a gross monthly salary of ¢900,000, but in February they requested an absence without pay for 15 days, for purposes of calculating the bonus, in that month, the gross amount will be ¢450,000, provided that the worker has not worked overtime or received any bonus.
When calculating these parameters, if the worker requests an absence without pay for 15 days in February, the Christmas bonus would be ¢862,500.
The Ministry of Labor and Social Security maintains a calculator on its website. This tool allows employees to estimate their bonuses up to the present. Those making inquiries must enter the gross salary earned each month. It must be remembered that, for accuracy, users of the tool must include overtime, commissions, bonuses, and in-kind payments.
Workers can access the bonus calculator through the use of the following link:
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