The year-end bonus is an annual benefit that employers must pay to their workers in El Salvador, as recognition for their effort.

It is calculated based on the time worked and is paid between December 12 and 20 of each year Here we explain the most important things:

What is a year-end bonus and who receives it?

The year-end bonus is a mandatory annual bonus (Art. 196 of the Labor Code) that is given to all workers who have worked during the year. If you worked the entire year with the same employer, you will receive the full bonus. If you started later, you will receive a proportional amount according to the time worked (Art. 197).

When is the year-end bonus paid?
Payment must be made between December 12 and 20 (Art. 200 of the Labor Code).
How much year-end bonus is due?
The amount depends on the years of service with the same employer:
From 1 to less than 3 years : 15 days’ salary.
From 3 to less than 10 years : 19 days of salary.
10 years or more : 21 days of salary.

What about taxes?

This year, thanks to an exemption approved by the Legislature, if your bonus is $1,500.00 or less , you will not pay income tax. If it is higher, you will only pay taxes on the amount that exceeds $1,500.00 . Example: If your bonus is $2,500.00 , you will only pay taxes on the $1000.00 over $1,500.00 .

For employers:
Comply with the law and pay your bonus on time to avoid fines and legal conflicts, as well as to motivate your team. At Consigili , we seek to give you the best advice to achieve your business goals. We boost your business through our legal, administrative and financial approach, to guarantee you the best result.
If you have any questions, please contact us!