The announcement that state workers will receive their Aguinaldo early (on the 17th of November 2021) has brought forward the subject of the Christmas Bonus or the “13th month” as an early Christmas news item.
The Aguinaldo or 13th Month is written into the Labor Code of Nicaragua and can be found under Chapter IV, in articles 93 to 99.
Most foreigners hiring cuidadors (security) and domestic staff will calculate the amount of Aguinaldo under one or a combination of the first three scenarios; Basic, Pro-Rated (new employee) or Minimum Wage. Businesses may have employees on commission or a more complicated calculation of salary, bonuses and benefits.
Basic Aguinaldo
The law says that every worker has the right to an additional month’s salary after one year of continuous work and is usually paid at the same rate as the last month of salary received by the worker.
Pro-Rated
In the event that a new worker has only a proportion of one year of service, then the 13th month bonus must be calculated in a way that it corresponds to the period of time worked “greater than one month and less than one year”.
Minimum Wage Workers
In the case of minimum wage workers where there was an increase in the legal minimum wage then the worker will receive an Aguinaldo based on the new monthly amount.
Commission Workers
Those workers paid by commission will receive an Aguinaldo based on the highest monthly salary received in the last 6 months
When does it have to be paid?
Article 95 says the Christmas Bonus must be paid within the first ten days of the month of December and if it hasn’t been paid during that time, the employer shall pay the worker “compensation equivalent to the value of one working day for each day of delay”.
What about deductions?
In general, the Aguinaldo is “unattachable” (Article 97.) and will be exempt from all taxes, however deductions for food (alimentos) provided to the worker as part of their employment can be made.
Trivia: The first Aguinaldo was authorized by President Anastasio Somoza Debayle in the “Christmas Salary Law – Executive Decree” N°. 51, adopted on the 26th of May 1978 and Published in the Official Gazette N°. 119 of June 1st, 1978.
For a more detailed account of the rules on deductions and other parts of the Labor Code on the Aguinaldo, see this link from AMCHAM, the American Chamber of Commerce of Nicaragua.
