Public and private sector workers in El Salvador can receive their Christmas bonus between October 1 and December 20, following the reforms approved by the Legislative Assembly on September 23 with 60 votes. The benefit is calculated based on ordinary salary and continuous length of service with the same employer.
The new period does not require private companies to make the deposit on October 1. Each employer may choose the payment date within the established window, although it must be made in a single disbursement and no later than December 20. Public employees began receiving the money from the start of the period.
The reform amended articles 197, 200, and 202 of the Labor Code. In addition, it kept December 12 as the reference date for determining who qualifies for the full bonus and for calculating the proportional amount for those who did not complete a year of service.
In that regard, to calculate the bonus, the first step is to identify the continuous working time the person accumulated with the same employer as of December 12.
The legislation establishes three minimum scales:
- Between one year and less than three years of service: 15 days of salary.
- Between three and less than 10 years: 19 days of salary.
- From 10 years of service: 21 days of salary.
For example, a person who earns $408 per month and has more than 10 years at the company must receive $285.60. The formula works as follows: $408 ÷ 30 = …
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The Legislative Assembly of El Salvador authorized the payment of the Christmas bonus between October 1 and December 20 this year. (Illustrative image Infobae)
Public and private sector workers in El Salvador can receive their Christmas bonus between October 1 and December 20, following the reforms approved by the Legislative Assembly on September 23 with 60 votes. The benefit is calculated based on ordinary salary and continuous length of service with the same employer. The new period does not require private companies to make the deposit on October 1. Each employer may choose the payment date within the enabled window, although it must be made in a single disbursement and, at the latest, by December 20. Public employees began receiving the money from the start of the period.
The reform amended articles 197, 200, and 202 of the Labor Code. In addition, it kept December 12 as the reference date for determining who qualifies for the full Christmas bonus and for calculating the proportional share for those who did not complete a year of service. In this regard, to calculate the Christmas bonus, the first step is to identify the continuous working time the person accumulated with the same employer as of December 12. The legislation establishes three minimum scales:
- Between one year and less than three years of service: 15 days of salary.
- Between three and less than 10 years: 19 days of salary.
- From 10 years of service: 21 days of salary.
For example, a person who earns $408 per month and has more than 10 years at the company must receive $285.60. The formula works as follows: $408 ÷ 30 = $13.60 per day, which means $13.60 (daily salary) × 21 working days = $285.60. In the case of a worker with more than three years but less than 10, who earns $700 per month, the calculation is done with 19 days: $700 ÷ 30 = $23.33 per day; meaning $23.33 × 19 = $443.33.
The Labor Code keeps December 12 as the key date for calculating length of service and the benefit. (Press, Ministry of Labor)
The Labor Code also protects employees who, as of December 12, have not completed a year of work. In those cases, the employer must pay a proportion of the Christmas bonus according to the time worked during the reference period. For this calculation, the Christmas bonus that would have corresponded to the worker had they completed the year is taken as the base, and then the proportion equivalent to the days worked is applied. Therefore, in addition to the monthly salary, it is necessary to know the date of hire. A person with a salary of $500 per month and less than a year of work could receive $28.03 in Christmas bonus, depending on the days accumulated at the company. The exact amount varies according to the length of service recorded as of December 12.
The reforms also preserve the right to proportional payment when the employment relationship ends before that date for reasons attributable to the employer or due to dismissal without legal cause.
The Legislative Assembly recently approved a transitional provision declaring the Christmas bonus and additional cash compensation, up to a limit of $1,500, as non-taxable income. For that amount, workers will not be subject to Income Tax withholdings.
Christmas bonuses that do not exceed $1,500 are exempt from Income Tax withholding, according to current legislation. (Illustrative image Infobae)
If the Christmas bonus exceeds that figure, the withholding will apply only to the excess. The measure applies to payments made between October 1 and December 20, 2026.
During the legislative discussion, Nuevas Ideas lawmaker Caleb Navarro argued that the early payment aims to allow families to have those resources before December to cover expenses and financial commitments. The Minister of Labor, Rolando Castro, reported that banks and other financial institutions will not be able to apply automatic deductions from the Christmas bonus to collect loans, pending charges, or other worker debts. The provision aims to ensure that the money paid for this concept reaches the employee in full, within the limits established by law. However, the 30% withholding of the Christmas bonus remains in place in cases of alimony, in accordance with the rules applicable to that obligation.