14th month pay is a payment offered to employees in certain countries around the holidays – usually at summertime or the end of the year. Though not mandatory in most countries where it’s offered, 14th month is intended to provide financial assistance during the seasons of extra spending – summer vacations, holidays, etc.
Differences between 14th month and 13th month
13th month pay and 14th month pay tend to be very similar. Both payments appear during holidays or vacation seasons – often summer and end of year, and both are usually equivalent to around one month’s salary.
The difference is that 14th month payments are usually less likely to be mandatory. They tend to be seen as more customary payments – made a few months after the original 13th month payment has been made.
14th month payments around the world
14th month payments are treated differently all over the world. Here are a few examples of different rules and customs surrounding this payment:
Austria: 13th and 14th month payments are both mandatory requirements for companies in Austria. 13th month payments are made in the summer and 14th month payments are made at the end of the year.
Japan: Both 13th and 14th month payments are customary but not mandatory in Japan. These payments are usually made in the months of June and December, respectively.
Philippines: 13th month payments are always mandatory in the Philippines. 14th month payments are seen more as an optional or voluntary payment.
Offering 14th month pay to a global workforce
Each country has its own regulations and rules surrounding additional payments. This can complicate the process of getting global payments to the employees’ bank accounts simply because of the plethora of variables involved.
One solution is to work with a payment distribution platform with knowledge and experience in the different compliance and regulations.
Keep in mind that the platform you choose should be one with a demonstrated track record in working with different compliance and regulation standards.