What is the 13th Month? 🤷
The 13th month is an additional gross monthly salary that employers may choose to pay, typically at the end of the year. To find out if you are entitled to a 13th month, you can check your employment contract or the collective labor agreement (CLA).
Difference Between 13th Month and Year-End Bonus 🥂
The 13th month and the year-end bonus are often seen as the same thing. This is understandable, as they are quite similar - both being additional rewards that an employer may grant once a year, typically in December.
However, there are some key differences:
- The 13th month is a fixed bonus equal to one gross monthly salary, essentially an extra month’s pay.
- The year-end bonus is a percentage of the gross annual salary, sometimes with a minimum amount specified.
13th Month and Holiday Pay 🏖️
Holiday pay is an additional amount, a certain percentage of your gross salary (at least 8%). It is paid out in May or June, just before summer. Holiday pay can also be paid out monthly, integrated into the monthly salary.
A 13th month (or other types of bonuses) is not included in the calculation of holiday pay. Conversely, when calculating the 13th month, only the standard gross monthly salary is considered, excluding holiday pay and other bonuses.
Calculation of the 13th Month
The calculation is based on your gross monthly salary, excluding holiday pay, bonuses, allowances, or other variable income. If you have been employed by the same employer for the entire calendar year, you typically receive a full 13th month.
If you started or ended your employment during the year, the 13th month is usually calculated on a pro-rata basis, based on the number of months worked. For example, if you started on July 1 (6 out of 12 months), you receive 6/12 (or 50%) of your gross monthly salary as the 13th month.
Tax on the 13th Month
You pay tax on the 13th month. In fact, in the Netherlands, the net 13th month is typically less compared to your regular monthly salary. The 13th month is considered a special reward, subject to additional income tax, which reduces your net amount.
Example of the 13th Month Calculation
Step 1: Determine your gross monthly salary.
- Suppose your gross monthly salary is €3,000.
Step 2: Calculate the pro-rata amount if you have not worked the full year.
- If you worked 9 months: €3,000 x (9/12) = €2,250 gross.
Step 3: Deduct taxes and premiums.
- Suppose the withholdings are 35%: €2,250 x 35% = €787.50.
- Net 13th month: €2,250 - €787.50 = €1,462.50.
How Common Is the 13th Month Worldwide? 🌎
In Europe, five countries mandate a 13th month: Armenia, Greece, Italy, Spain, and Portugal. In other countries, it’s customary to grant this bonus, including the Netherlands, Austria, Germany, France, Slovakia, Switzerland, and Finland.
When we look at other continents, there are significant differences. In Latin America, the 13th month is legally required in most countries. In countries where it is not mandatory, it is still common practice. In Asia, the requirement for the bonus applies only in India, Indonesia, and the Philippines. Additionally, the 13th month is not customary in many other countries. For example, it is not common in the United States, Canada, Australia, and the United Kingdom.
📱Overview of Your Income with Grassfeld
The 13th month can be one of the additional income sources you receive from your employer each year. To keep track of your income and expenses, use Grassfeld. The app not only categorizes your expenses, showing you where your money goes, but also provides a clear view of your monthly and annual income, helping you maintain control of your personal finances. Download the app now from your app store and experience the benefits for yourself!
