The government is proposing that workers regain the option to receive their holiday and Christmas bonuses in installments or in the traditional manner, as outlined in the Executive’s program submitted to Parliament.
What are installments?
Installments refer to a phased payment method for holiday and Christmas bonuses. Instead of receiving the bonuses in a lump sum, workers can choose to have them spread across 12 months.
Typically, the holiday bonus is paid in June, while the Christmas bonus is distributed in November or December.
With the installment option, workers receive a portion of the bonuses along with their salary, resulting in a higher monthly income.
What does the government want?
The government program states, “Each worker should again have the prerogative to choose how they want their bonuses (13th and 14th months) to be paid: in full on two occasions during the year or in installments, that is, spread over the 12 months of the year.”
Installments: Advantages and Disadvantages
Receiving holiday and Christmas bonuses in installments has its pros and cons. The Santander blog, Salto, highlights the following:
Advantages
- More monthly liquidity. Receiving bonuses in small amounts increases monthly salary, which can help balance accounts and manage regular expenses;
- Greater financial stability. Monthly income becomes more consistent, facilitating financial planning, especially useful for those who prefer predictability over sporadic cash influxes;
- Avoids impulsive spending. Receiving a large sum at once can lead to impulsive purchases. With installments, this risk is reduced;
- Improved management for companies. For employers, this method allows the distribution of expenses throughout the year, aiding cash flow management.”
Disadvantages
- Less flexibility during key times. If you rely on bonuses for holiday expenses or Christmas gifts, you might miss this ‘bonus’ during those periods;
- Limits investments or larger payments. Receiving in installments may restrict the ability to make large purchases or save in bulk;
- Loss of symbolism. For many, Christmas and holiday bonuses carry emotional weight, which diminishes with this payment model.”
