What is Aguinaldo?
Aguinaldo in Costa Rica was developed to help the workers deal with the additional costs associated with the Christmas and New Year’s season and is the “holy grail” of bonuses paid by every employer, whether government or private. It’s an additional paycheck, commonly known by locals as the “13th month’s pay”, that must be given to all regular workers regardless of work performance or job quality because it is based on the paid gross wage.
It’s approaching December, so it’s almost time for Aguinaldo, the year-end employee holiday bonus. Remember, Aguinaldo is not a perk but a requirement under Costa Rica labor law. The Aguinaldo is so significant that the Ministry of Labour will represent an employee when an employer fails to pay by the deadline. Strict penalties apply to an employer that fails to pay an employee. There is no way for the employer to avoid paying this benefit; it is still paid even if the employee is fired or quits.
How is Aguinaldo paid?
Aguinaldo’s calculations require adding all paid gross wages per employee—including overtime, double time, commissions, maternity leave, etc.—removing absences and sick leave from December 1st of the prior year through November 30th of the current year and dividing the result by 12. If an employee quits the company before November 30th, the Aguinaldo is calculated until the last day of work.
Equity Loans Solution
It is safe to state that if you have employed someone over the year, even for a short period like a week or a day, there is a strong probability they may knock on your door looking for their bonus.
We recognize that Christmas may be a financially challenging time for business owners who must pay the mandated one-month Christmas bonus that is Aguinaldo.
The solution is a company, GAP Equity Loans, and its private lenders, who provide collateralized loans to those who need them for these costs and more. For instance, a lender provided a loan to a business owner last year so that they could pay Aguinaldo to their employees. The loan for $150,000 USD was approved because they used a property’s equity worth more than double the loan amount requested as collateral.
When Do I Pay Aguinaldo?
Aguinaldo will be paid to employees during the first 20 days of December. Always obtain the employee’s signature as confirmation on a written declaration of the amount to be received before issuing a payment.
We recommend Gap Equity Loans. If you have a property, you could use as collateral and need a loan, complete our loan request form and let them help you make your Christmas holidays stress-free!
-Written by Glenn Tellier (Founder of CRIE and Grupo Gap).
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