13th month pay by country in Latin America

When a US company sizes up a nearshore hire, the monthly salary is only the start. Across most of Latin America, the law requires a year-end bonus on top of the twelve regular paychecks. It is usually called the aguinaldo, and in accounting terms it works like a thirteenth month of pay spread over a twelve month year. Miss it in your budget and the true cost of a hire turns out higher than the number you planned around, often right at year end when cash is already tight.

The good news is that the bonus is predictable. Each country fixes the amount and the timing in its labor code, so once you know the rule for a market you can budget it to the dollar. The tool above does exactly that: choose a country, enter a salary, and it shows the bonus in months, as a percentage uplift, and in real money, along with the payment schedule. The sections below explain how the rules differ, why the differences are smaller than they look next to a US salary, and who carries the obligation when you hire abroad.

To complete the picture, pair this guide with the hiring cost calculator to see total cost versus a US hire, the salary guide to set a fair base offer by role and country, and the PTO and public holidays guide to plan paid leave alongside the bonus.

The biggest mistake when comparing bonuses across the region is assuming they all work the same way. They do not. The most common rule is a single full month of salary, which is how Brazil, Colombia, Costa Rica, the Dominican Republic, and Argentina handle it. That one month adds about 8.3 percent to annual salary cost. Two countries here, Peru and Guatemala, require two full months, which roughly doubles the uplift to about 16.7 percent. Mexico sets a lower floor of fifteen days, so the uplift there is closer to 4.2 percent, though many employers choose to pay more.

Ecuador is the case that needs care. It pays a thirteenth salary equal to one full month of the employee’s own pay, then a separate fourteenth salary set at one national minimum wage, the same flat amount for everyone. For a minimum wage worker the fourteenth is close to a second full month, but for a well paid developer or designer it is a smaller fixed sum on top of the salary linked thirteenth. That is why the tool counts only the salary linked part in the percentage and notes the flat fourteenth separately, so the figure stays honest for the kind of role you are likely to hire.

Chile is the outlier in the other direction. There is no legally mandated bonus for private sector workers, so the statutory uplift is zero. Many Chilean employers still pay an aguinaldo for the national holidays in September and for Christmas, but it is a matter of custom or collective agreement rather than a legal minimum. When you compare countries, line up the rules first, because a number that looks like a simple bonus in one market is two payments, a split schedule, or a flat add-on in another.

When you employ someone in their home country, that country’s labor code sets the floor, and the mandatory bonus is part of that floor. You cannot pay less than the legal minimum, and missing a payment deadline can bring penalties or disputes. The practical question is who carries the obligation. If you set up your own legal entity in the country, your company runs payroll and pays the bonus directly. Most teams hiring a handful of people instead work through a partner so they get the talent without standing up foreign payroll and learning ten different bonus rules.

With a staffing partner or an employer of record, the partner is the legal employer in the country and handles the bonus, the payment timing, the related social contributions, and the filings. You direct the work day to day and pay a single predictable monthly rate that already accounts for the year-end bonus. That model is how most US companies hire from Latin America at small scale, and it is what keeps the figures in this guide from turning into an administrative project on your side.

LavaStaff works this way. We handle the local employment relationship, including the statutory bonus and its timing, so you can hire across the region with one point of contact and a clear monthly cost. You focus on the work and the relationship; we make sure the compliance underneath it is sound and that the people on your team are paid everything the law requires.