The explanation of extraordinary bonuses that is worth its weight in gold
It's no secret that, in the work playground, motivation and remuneration go hand in hand. And to make the blind man sing, tip 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 an extra pay will surely make it on the side of productivity!
Excellent, if it weren't for the fact that you will now have to consider extraordinary bonuses in the payroll. A surely complex procedure, with provisions of law 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 extraordinary bonuses on the payroll?
The extraordinary bonuses that are reflected in the payroll of the workers correspond to an additional income to their ordinary salary. This is why we speak of a "bonus".
Extraordinary bon uses are intended to increase the purchasing power of workers, considering that there are periods during the year when their pay may increase. They can also be considered as a way to increase workers' work motivation.
In terms of payroll, these payments are characterized by the following characteristics:
- They do not contribute to Social Security since when making the pro-rata (as we will see later), they will have already contributed;
- they are subject to personal income tax withholding;
- they are accrued 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 states that workers have the right to receive
- Two extraordinary bonuses per year:
- One on the occasion of the Christmas holidays,
- Another in the month established by collective bargaining agreement or by agreement between the employer and the legal representatives of the workers.
The amount of these bonuses is also fixed by collective agreement and may be paid pro rata in twelve monthly pay slips. Likewise, the minimum conditions mentioned above may 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 prorate the two special payments on a monthly basis, i.e., to pay them month by month. However, this decision must be set forth in writing in the collective bargaining 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, based on 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 base 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 = Base salary + Allowances + Prorata of extra pay*.
CM contribution base = 1,634 +150 + 297.33
CM contribution base = 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 base | 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 withholding 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 extraordinary bonuses is set 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 company, on the other hand, it is important to indicate the decision to prorate the bonuses clearly in the payroll. Otherwise, the employee can file a claim for payment.
How does temporary incapacity affect extraordinary 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 due to the fact that this period is not considered effective work time, nor rest time computable as such. Therefore, the bonus is calculated in proportion to the period of time during which the employee was not on sick leave.
To summarize...
- Extraordinary bonuses in payroll are an additional remuneration to the basic salary that a worker 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 base 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 bonuses spread over the twelve monthly payments of the year (proration of special payments).
- The correct calculation of special bonuses in the payroll depends on the consideration of all the applicable specificities, according to the type of contract and the agreement.
- Whatever the agreement reached by the company with the employee, the extraordinary bonuses must be indicated in the payroll that is given to them, under penalty of being the subject of a claim before the competent authority.
Do you have any questions? Leave them in the comments!
Article translated from Spanish