The ‘teenth month payments

Photo by Alexander Mils on Unsplash

TL;DR¹

Offering a 13, or 14 month pay period is a way to give the same annual salaries to employees, whilst giving a larger salary payment at certain points in the year, to help cover high expenditure periods.

This article goes through the explanation, implementation, and pros and cons of such a system, whereby the monthly salary is reduced, compensated by a larger salary either once, or twice a year.

Overview

Quick Example: ‘teenth Month Salary

Motivations

How it works

An image of a table showing the caulculations of 13 and 14 month salaries

Implementation: 13 month years

An image of a table showing the salary payments for thirteen month payments
An image of a table showing the accrual that would need to be paid out to an employee depending on the month that the person leaves

Implementation: 14 month years

An image of a table showing the salary payments for fourteen month payments
An image of a table showing the accrual that would need to be paid out to an employee depending on the month that the person leaves

Implementation: Variable monthly payments

Possible hurdles for implementation

Tying this all together

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