The Spanish Christmas Bonus and the 14 Month Payroll in Spain

One of the unique cultural practices in Spain is the summer and winter double paycheck. Every July or August and December, Spanish employees receive twice their normal salary for the month. Sounds crazy, doesn't it? It's actually negotiated that way, so when you take a salaried job in Spain, you agree to receive your annual salary in 14 payments, one per month, and then an extra one each summer and winter. As far as I know, this is the standard practice across most industries.

The Pros

While it's not a big problem for me, I think the data pretty clearly suggest that people, in general, are really bad at saving money, and are even quite good at getting into as much debt as lenders will allow them to. I'm a big fan of using little psychological tricks on myself, such as setting up a standing transfer from my checking account into my savings account every month to automatically take some of my paycheck into savings, thus making it appear, at a glance, that I have less money available to spend than I really do. Having your Spanish employer do it for you makes for pleasant surprises every six months. It's a bit like getting a tax refund. Even though it was your money to begin with, it still feels like a gift.

This policy has got to be great for the tourism and retail industries in summer and winter respectively. Having the entire population feel like they just won the lottery right when it's time for summer vacation or Christmas shopping must provide a defibrillator paddle shock to the national economy that probably keeps it healthier than if those two extra paychecks were spread out throughout the year.

The Cons

When your employer knows you can live just fine on 85% of your total annual salary, when your employer is looking for ways to reduce costs, those extra two months of pay are easy targets. There's an enormous brouhaha lately because the Spanish government, an "austerity measure", is refusing to pay public sector workers their extra paycheck this December. The real kick to the kidneys is that the government is making its employees pay taxes on that 14th paycheck even though they're not receiving it. ¡Toma! Take that!

Conclusion

The idea of having your annual salary split up into 14 months is certainly an interesting idea. I'm not sure that I'd want to switch to it myself, since I'd rather have all my money now and not have my employer earning interest off of what belongs to me for six months. Plus, if someone really wanted to, they could implement it themselves with some self control and automated bank transactions.

Just when I think I've exhausted all the little cultural quirks I can write about my adopted home to my largely non-Spanish audience, something like this comes up in the news and reminds me just how weird these Spaniards are.