Saturday, December 11, 2010

Mandatory Christmas Bonus

Here in El Salvador, employers are required to give their employees a Christmas bonus. Geoff and I will be giving our maid an extra week's pay (plus she will get paid time off while we're on vacation in Argentina). But, for the full-time employees (such as myself), the mandatory Christmas bonus breaks down as follows:

Up to 1 year of employment: Proportional bonus of 10 days' pay. (ie. If you've been employed for 6 months, your bonus is equivalent to 5 days' pay.)

Over 1 year, up to 3 years of employment: 10 days' pay.

Over 3 years, up to 10 years of employment: 15 days' pay.

Over 10 years of employment: 18 days' pay.

That's a pretty real example of piecewise functions, besides progressive taxes and volume discounts on products. How do you feel about the government dictating when you get bonuses? I know (from having interviewed with schools in Brazil in the past) that Brazil has all kinds of funny salary-related laws. Among them is one that says that you must get paid 13 months of salary a year; half of your "extra" month gets distributed as a Christmas bonus, and the other half of it gets distributed at the beginning of summer, in time for your summer vacations. How funny!


  1. how very interesting! i love hearing about other countries' economies. reading about this really makes me want to pick up my family and move like you and geoff did. have you read "the sex lives of cannibals" and its sequal? that's my fantasy right now.

  2. Haven't read it, but it sounds very interesting! :) :) Sounds like one to add to my list.

    And yes, it's so interesting to learn about local laws!! Another one you would appreciate is that in El Salvador, you are allowed by law a (paid??) maternity leave of about 100 days. Speaks to the country's cultural priorities.