Mandatory bonuses and 13th salary in QA hiring cost

In some countries the law requires payments beyond the monthly salary: a 13th or 14th month of salary, a holiday allowance, or a required insurance policy. This site records them as mandatory benefits, a separate line in the cost breakdown, valued from the statute that sets them. They are listed as cost items for budgeting; this page does not describe how to structure an offer or comply with the law.

How mandatory benefits are valued

The published formula values each mandatory item in one of three ways:

• Extra months. A 13th or 14th salary is valued as the number of extra months times one twelfth of base salary. One extra month adds one twelfth of base; two add two twelfths.
• Rate. A holiday allowance or similar payment set as a percentage of salary applies that rate to base, up to any cap.
• Fixed annual. A required payment set as a fixed amount, such as a mandatory insurance premium, is added as it is.

Each item cites the statute or authority that sets it, with the date it was checked.

Base salary and the extra months

Salary sources report pay in different ways. Some report annual gross salary including extra months; others report monthly salary times 12. When a source row states that its annual figure includes one or two extra months, the verification step converts it to a 12-month basis. The base salary line is therefore a 12-month figure, and the extra months are added once, on the mandatory benefits line. Without that step the extra months would be counted twice.

Worked example

The example below takes a published combination in a country whose law requires extra monthly salaries. It lists each statutory payment and values them from base salary, as the mandatory benefits line of the linked breakdown page does.

How mandatory benefits differ from contributions

Contributions are paid to a public body: a tax authority, social security fund or insurer. Mandatory benefits are paid to the employee, or bought for the employee, because the law requires it. Both are statutory and both are on every breakdown page, on separate lines, so each can be traced to its source. The employer contributions guide covers the first.

In some countries a mandatory payment is also subject to contributions. The dataset applies contributions to base salary only, as the formula states, so contributions on a mandatory payment are not included in the contributions line.

Paid leave

Paid leave is inside base salary: an employee on leave is paid the normal salary. The formula does not add leave as a cost line. It reduces productive hours instead, which raises the hourly equivalent. The hourly cost guide shows that step. Where the law requires leave pay above normal salary, that excess is a mandatory benefit.

Countries without mandatory benefits

Where a country's law sets no such items, the mandatory benefits line shows zero. That is a sourced zero, not a missing value. A missing value would show "not estimated" with a reason.

The figures are estimates for budgeting, not legal or compensation advice. Statutory rules change; check the cited authority before using a figure in a contract.

Related pages

• Cost by country
• Formula
• Confidence grades
• Employer contributions explained