The explanation of extraordinary bonuses that's worth its weight in gold
It is no secret that, in the work playground, motivation and remuneration go hand in hand. And to make the blind man sing, the tip goes first!
Although as a company director or human resources manager you know that this is not the only aspect that determines which way the scales tip, offering extra pay is sure to tip the scales in favour of productivity!
Excellent, if it weren't for the fact that you will now have to consider the extra bonus in the payroll. A procedure that is bound to be complex, with legal provisions and amounts to consider...
Fortunately, Appvizer brings you in this article all the answers you were looking for on how special bonuses are calculated and paid. A real goldmine!
What are special bonuses on the payroll?
Extraordinary bon uses that are reflected in the payroll of workers correspond to an additional income on top of their regular salary. This is why they are referred to as a "bonus".
Special payments are intended to increase the purchasing power of workers, considering that there are periods in the year during which their pay may increase. They can also be seen as a way to increase workers' work motivation.
In terms of payroll, such payments are characterised by the fact that:
- They are not subject to social security contributions since, when they are pro-rated (as we will see below), they will already have been paid;
- they are subject to personal income tax withholding;
- they are paid according to the proportional time worked during the year prior to the date of payment.
Extraordinary bonuses according to the Workers' Statute
Extraordinary bonuses are regulated by Spanish law, through the Workers' Statute. In this respect, article 31 determines that workers are entitled to receive
- Two extraordinary bonuses per year:
- One on the occasion of the Christmas holidays,
- one in the month established by collective agreement or by agreement between the employer and the workers' legal representatives.
The amount of these bonuses is also fixed by collective agreement and may be paid pro rata in twelve monthly pay slips. The above-mentioned minimum conditions may also be improved by agreement of the company and at the employer's discretion.
Proration of special payments
It is not uncommon for companies to decide to pro-rate the two special payments on a monthly basis, i.e. to pay them month by month. For this to happen, however, such a decision must be recorded in writing in the collective agreement.
How are special bonuses calculated? - Practical example
Before looking at a practical example, it is worth mentioning that, given the salary nature of this concept, the amount to be calculated for the extra bonus must be based on the time during which the worker carried out his/her duties in the year preceding the calculation.
As for the payment, this can be annual or half-yearly.
If we want to calculate the payroll for June for Mikel Rojas, Head of Marketing with an indefinite term contract, starting from the following assumptions:
- Professional group: 3
- Basic salary: 1 634 euros
- Seniority bonus: 150 euros
- Personal income tax withholding: 8%.
- Extraordinary bonuses: 2 per year (June and December) for an amount equivalent to the basic salary + length of service bonus → 1 784 euros.
Gross salary
Gross salary = ( Basic salary + Seniority bonus + Special bonus June )
Gross salary = ( 1 634 + 150 + 1 784 ) = 3 568 €.
2. Contribution bases
- Contribution base for common contingencies (BCCC):
Contribution base CM = Basic salary + Allowances + Prorata of extra payments*.
Contribution base CM = 1 634 +150 + 297,33
Contribution base CM = 2 081,33 €/month
* Prorata of extra payments = (1 784 * 2)/12= 297,33 €.
According to the contribution bases set for the year 2022, we check that we are within the range, according to the corresponding group (in this case, group 3):
Minimum = 1 134,30 €/month
Maximum = 4 070.10 €/month
- Contribution bases for professional contingencies (BCCP):
Assuming no overtime has been worked, it will be the same amount as the BCCM, i.e. €2 081.33/month .
3. Social Security
| Contribution basis | Rate (%) | Contribution | |
| BCCC | 2 081,33 |
28,30 | 589,02 € |
| BCCP | 2 081,33 |
1,30 | 27,06 € |
| Vocational training | 2 081,33 |
0,10 | 2,08 € |
SS contribution = 589,02 + 27,06 + 2,08
SS contribution = 618,16 €.
4. Personal income tax withholding
IRPF = Gross salary * IRPF deduction rate
IRPF = 3 568 * 0,08 = 285,44 €.
5. Net salary
SN = Gross salary - SS - IRPF contribution
SN = 3 568 - 618,16 - 285,44
SN = 2 664,40 €.
Other frequently asked questions about special bonuses
Is there an official date for receiving the entitlement to the two special bonuses?
No. The date for payment of the amounts corresponding to the special bonuses is fixed by each company. A common model is to pay as follows:
- Summer bonus → the second half of June;
- Christmas bonus → the second half of December.
What happens when the company, without prior agreement, decides to prorate the extra bonuses?
The employee can demand their payment, even if they have already been prorated.
For the employer, it is important that the decision to prorate the bonus is clearly indicated in the pay slip. If this is not the case, the employee can file a claim for payment.
How does temporary incapacity affect special bonuses in the payroll?
The period of temporary incapacity (TI), when this involves a suspension of the contract, is not counted in the accrual of extraordinary bonuses. This is because this period is not considered effective working time, or rest time that can be counted as such. Therefore, the extra pay is calculated in proportion to the period of time during which the worker was not on sick leave.
In short...
- Extraordinary bonuses in the payroll are an additional remuneration to the basic salary that an employee receives. For each day worked, the right to these extra payments is generated.
- The extra payments are regulated by article 31 of the Workers' Statute and their amount is established by agreement, although they must not be less than 30 days of the basic salary or minimum interprofessional salary.
- Generally, these are paid to the payroll on the occasion of the Christmas holidays and the summer season.
- Companies have the power to decide whether workers will receive these payments spread over the twelve months of the year (proration of special payments).
- Correct calculation of the special bonuses in the payroll depends on taking into account all applicable specificities, depending on the type of contract and the collective agreement.
- Regardless of the agreement between the company and the employee, special bonuses must be indicated on the pay slip , otherwise they may be the subject of a complaint to the competent authority.
Do you have any questions? Leave them in the comments!
Article translated from Spanish