End of year bonus: Global insights and eligibility for expats explained

  • end of year bonus
Published on 2023-12-01 at 13:00 by Asaël Häzaq
The end-of-year bonus is commonly known as the “13th or 14th month” or the “Christmas bonus”. This financial aid is helpful, especially amid the current economic crisis. In which countries can you expect to receive an end-of-year bonus? Are expats eligible?

Christmas and end-of-year bonuses around the world 

The year 2023 has been marked by inflation, which is straining the budgets of millions worldwide. End-of-year financial aid brings hope and alleviates the stress of many people with modest incomes, although some experts downplay its importance. According to them, the end-of-year bonus barely compensates for the loss of purchasing power due to inflation. Others prefer to see the positive side and salute the efforts of countries where workers receive Christmas bonuses. 

Many countries pay end-of-year bonuses, although the scheme's name differs. These include Germany, Luxembourg, Belgium, France, Finland, Croatia, Switzerland, Slovakia, the Netherlands, and many other European countries. There are just as many in Latin and South America (Costa Rica, Bolivia, Chile, Brazil, Honduras, Ecuador, Guatemala, Paraguay, Mexico, Peru, Venezuela, etc.). Workers in Africa, Nigeria, Morocco, Angola and South Africa receive a 13th month bonus, as in Saudi Arabia, the United Arab Emirates, Japan, China, Taiwan, Vietnam, India, Hong Kong and Singapore. It's worth noting that these end-of-year bonuses may be regulated by law or customary (i.e., part of current company practice).

Are expats entitled to end-of-year bonuses?

There are two main types of end-of-year bonuses: those set by the State and, therefore, governed by law and those negotiated in company sectors (company agreements, collective agreements) or decided unilaterally by a company. 

Bonuses governed by law

The Philippines, Greece, Portugal, France, India and Indonesia have established laws for end-of-year bonuses. However, there is a difference between Christmas bonuses reserved for people with modest incomes, whether employed or not, and other end-of-year bonuses relating to employment. Christmas bonuses intended for people with modest income are paid by government bodies as long as they meet the eligibility criteria. Legal restrictions also apply to other end-of-year bonuses companies pay their employees.

For instance, in France, the Christmas bonus is paid to people receiving "certain minimum social benefits": the active solidarity income (RSA), the specific solidarity allowance (ASS), the retirement equivalent allowance (AER) and the lump-sum payment for returning to work. The bonus is paid directly by the Caisse d'allocations familiales (CAF) and requires no action on the part of the recipient. If they meet the criteria, expats are also eligible for the minimum social benefits paid by the CAF (conditions may vary depending on whether they are EU nationals or not), which means that they are also eligible for the Christmas bonus. According to the law in the Philippines, employees who have worked for the company for at least one month will receive a 13th month's pay in December. In this case, the company pays the bonus, and the government specifies the legal framework within which it must be paid while specifying the beneficiaries.  

Bonuses paid by companies

Bonuses resulting from company negotiations are not a legal obligation. In Japan, the United Arab Emirates, Finland and South Africa, end-of-year bonuses are customary. Companies are free to decide whether or not to pay an end-of-year bonus. However, if a collective agreement or a company sector agreement is concluded in favor of a Christmas bonus, this agreement must be respected by companies in the sector. There are also other end-of-year bonuses, such as productivity bonuses (based on the employee's performance over the year), end-of-year review bonuses (generally reserved for managers, executives and directors), and performance bonuses, which apply when the employee has succeeded in achieving the targets set by the company. Unlike the end-of-year bonus, the amount of which is the same for all employees, the other bonuses are linked to an assessment of the work done by the employee.

For example, Moroccan law does not require employers to pay an end-of-year bonus to their employees. However, some employers pay an end-of-year bonus to reward, encourage and retain employees. In this case, they are required to pay the same bonus to all their employees, whether citizens or expats. 

The same applies in Belgium, where the end-of-year bonus is not a legal requirement. The amount may vary depending on the sector and the company. It can also depend on the industry and, in this case, is the outcome of an agreement to be respected by the companies in the sector. In the absence of any agreement, it is up to the company to set the amount. The employment contract terms or regulations always specify when an end-of-year bonus is to be paid.