How Employee Bonuses Vary Across the World

Key takeaways

• Bonus requirements vary: Countries can require 13th-month salaries, holiday payments, profit-sharing, or other forms of supplementary pay.
• Local practices matter: Global bonus policies need to account for local employment laws, payroll requirements, market practices, and employee expectations.
• Not all bonuses are the same: Mandatory and customary payments have to be distinguished from discretionary performance, signing, or retention bonuses.
• An EOR simplifies global bonus administration: An employer of record (EOR) can help companies administer locally compliant compensation for international employees hired through an EOR.

Managing bonuses across a global workforce is more than applying the same compensation policy in every country. Laws and customs governing employee compensation, including payments and discretionary bonuses, differ around the world. A payment that is optional in one market can be legally required, collectively bargained, or expected in another.

Before hiring in a new country, companies need to review local bonus requirements, payroll treatment, and market practices. Reevaluating their compensation benchmarks can help determine whether existing policies translate effectively to the local workforce. This guide explores common types of bonuses, how supplementary pay varies by country, and practical steps for managing global bonus programs.

Types of bonuses

A “bonus” is an extra sum of money given on top of an employee’s standard wages. There are different types of bonuses you can give in your home country or that you can find are more common in other countries. Some of the most common include:

• Spot bonus: A spot bonus is a merit-based bonus given to an employee to reward them for a job well done or for going above and beyond.These bonuses are one-off and given at a manager’s discretion as the budget allows.
• 13th-month salary: The 13th-month salary is a bonus employers give if they so choose or in jurisdictions where it’s legally required. This bonus is equal to a full month’s wages given at the end of the year. Various countries have different ways of calculating the right amount. In some cases, it can be equal to two months’ wages, making it a 13th/14th-month bonus.
• Holiday bonus: Companies in countries where a 13th-month salary isn’t customarycan still give a holiday bonus. This is sometimes called a Christmas bonus. The amount you give can differ from employee to employee based on their salary..
• Signing bonus: A signing bonus is a one-time bonus given at the beginning of someone’s employment. It serves as an extra enticement to get someone to come aboard. This can be helpful if you’re persuading someone to leave a position elsewhere or you’re competing with another company.
• Retention bonus: A retention bonus is a bonus you give an employee to convince them to stay if they’re considering leaving. It can be that another company has attempted to recruit them, or maybe they’re dissatisfied. 
• Referral bonus: A referral bonus is a monetary gift to thank an employee for bringing new talent to the team. For example, an employee can have encouraged a friend to apply for a new job opening with your company. Companies can wait a probationary period after hiring the new employee and then give a referral bonus to the person who encouraged this new employee to apply.
• Vacation bonus: Paid vacation means employees get their usual wages for the days they’re absent from work. If employers pay out a vacation bonus, that means employees get a premium on top of their normal wages. In other words, they’re paid extra for the time they’re on vacation.
• Profit-sharing: Profit-sharing is a bit different from other types of bonuses.t’s worth a mention since it’s another common way global companies compensate their employees. It’s an incentive plan where a portion of profits is divided among employees. The better your company performs, the more money employees get.
• Commission: Commission is a way to reward job performance. Some employees work entirely or mostly on commission. In this case, it doesn’t function as a bonus. In other cases, commission can be a small part of an employee’s overall compensation. There are multiple ways to structure compensation. Employees can have a sales quota they needreach to get a set dollar amount, or they can get a certain percentage of profits they bring in.

How to decide when to give bonuses

While many of the same principles apply across your global workforce, local employment laws, payroll requirements, and market expectations can influence when and how supplementary pay is given.

1. They are legally required

One reason to give a bonus is because local law requires it. While many bonuses are discretionary, some countries mandate specific supplementary payments. Several Latin American and European countries require a 13th-month salary or a similar statutory payment.

Some countries require additional forms of supplementary compensation. In Mexico employers have to pay the statutory 13th-month bonus (aguinaldo) and are  share 10% of their pre-tax profits with eligible employees each year. Understanding and following local bonus requirements is an important part of managing global compensation and reducing compliance risk.

An employer of record (EOR) can help simplify bonus administration for international teams. G-P EOR supports companies by managing payroll and compensation in accordance with local employment requirements, including statutory bonus payments where applicable. Instead of researching bonus obligations, payroll requirements, and local employment rules for every country where you hire, you can rely on G-P's global employment infrastructure to help administer compensation consistently and compliantly across your international workforce.

2. They are customary in the country

Some bonuses aren;t legally required in a country, but they’re customary. Even if they aren’t customary for the whole country, they can be standard within a certain industry. That means only studying the employment laws in a country isn’t enough to tell what your employees there will expect. For example, if the 13th-month salary isn’t legally mandated in a country, it can  be customary. This is the case in about two dozen countries across the world.

That means employees in these countries will likely assume that their wages will  be over 8% more than their annual salary. If the customary time for the bonus comes and goes without it being paid, you can expect to have some upset employees. If you make it clear to employees that you don’t give out a bonus that is customary in the country, you can have trouble recruiting since employees can choose to work for other companies where they will receive the traditional bonuses.

3. They will give you a competitive edge in a tight market

Another reason to offer bonuses for international employees is to strengthen your position in competitive labor markets. When demand for skilled talent outpaces supply, employers  offer signing bonuses, retention bonuses, or performance incentives to attract qualified candidates and retain them. Recent global workforce trends continue to show that employers in many countries struggle to find skilled talent, making competitive compensation an important part of successful international hiring.

When you're trying to attract top talent in a competitive market, offering supplementary pay can help differentiate your company from other employers. A signing bonus can encourage a candidate to accept your offer over another opportunity. Retention bonuses and performance incentives can help strengthen employee engagement and long-term retention.

4. You want to boost employee morale

Another reason to give your employees a bonus is to boost morale. You can compensate your employees fairly for the work they do, but an extra monetary gift demonstrates a deeper sense of appreciation. A holiday bonus is an excellent way to show goodwill and help the families who work for you when their finances can be getting tight due to holiday spending.

One thing to be careful of is giving out discretionary bonuses to some employees and not to others. This can happen if you give a spot bonus to an employee who did a great deal of work on a project but don’t realize another employee contributed equally. Communicating reward decisions well is important to keeping employee satisfaction high. Be careful to identify the employees who deserve some extra appreciation. When you want to boost morale across the whole team, give a bonus to all your employees.

5. Your employees need incentives to excel

A main reason to offer performance-based bonuses is to motivate your employees to be more productive. If an employee knows they can get a commission bonus by meeting a sales quota, they’re likely to work harder to achieve their goal. Keep in mind that not all types of bonuses motivate employees equally.

Every company and team of employees is different, so you can be able to motivate your employees with various types of bonus pay. Even a small bonus can be enough to push employees to try their best and make them feel appreciated when they do.

Common ways global benefits policies differ

Bonus requirements and market practices can vary from one country to another. While many employers think of bonuses as discretionary rewards, some countries require statutory supplementary payments. Others rely on collective bargaining agreements or long-standing market practices. Understanding these differences is an important part of building competitive and compliant global compensation programs.

The examples below highlight some of the ways bonus requirements differ around the world. While 13th-month salaries are common in many jurisdictions, they’re only one example of how countries approach supplementary pay. Employers can encounter statutory holiday bonuses, profit-sharing requirements, vacation subsidies, or other forms of extra compensation depending on local law and employment practices.

Country	Example of Supplementary Pay
Argentina	Employees get a statutory supplementary annual salary, commonly referred to as the 13th-month salary, paid in two installments.
Australia	Most bonus payments are discretionary unless required by an employment contract, enterprise agreement, or workplace policy.
Austria	Most employees get 13th- and 14th-month salary payments through collective bargaining agreements (CBA), making them nearly universal in practice despite not being standalone statutory entitlements.
Brazil	Employees get a mandatory 13th-month salary, paid in two installments based on annual earnings.
Colombia	Employers need to pay the prima de servicios,  equivalent to 30 days' salary per year, paid in two semiannual installments.
Costa Rica	Employees get an annual aguinaldo, equal to one month's salary based on earnings during the prior 12-month period.
Ecuador	Employees get statutory 13th- and 14th-month salary payments, with one tied to annual remuneration and the other linked to the minimum wage.
El Salvador	Employees get a statutory Christmas bonus, with the amount varying based on length of service.
Finland	While not required by law, 13th-month payments are common in many industries through CBAs.
Germany	Bonus payments are governed by employment contracts, CBAs, or workplace policies rather than a universal statutory requirement.
Greece	Private-sector employees get Christmas, Easter, and vacation bonuses, together functioning as extra salary payments throughout the year.
Guatemala	Employees get a  Christmas bonus (aguinaldo) and Bono 14, each equivalent to one month's salary.
Honduras	Employees get 13th- and 14th-month salary payments, paid around Christmas and mid-year.
Italy	Employees get a 13th-month salary, and in some sectors a 14th-month salary, set up through national CBAs.
Japan	Seasonal bonuses are common in many industries and are paid twice a year, although they’re based on company policy or employment agreements rather than statutory requirements.
Mexico	Employees getan annual aguinaldo of 15 days' wages,  paid before Christmas.
Nicaragua	Employees get 13th-month Christmas bonus equal to one month's salary.
Panama	Employees get 13th-month bonus,  paid in three installments throughout the year.
Peru	Employees gratificaciones in July and December, equivalent to extra monthly salary payments.
Philippines	Employers need to pay a 13th-month salary equal to one-twelfth of the employee's basic salary earned during the calendar year, by year-end.
Portugal	Employees get a Christmas subsidy and a vacation subsidy, treated as 13th- and 14th-month salary payments.
Spain	Employees get two extra statutory salary payments each year unless those payments are prorated through regular payroll under an employment contract or collective agreement.
Uruguay	Employees get a 13th-month salary (aguinaldo), paid in two installments during the year.

Because bonus requirements can change over time and differ by industry or CBA, companies need to verify current requirements before hiring in a new country. Working with local experts or an employer of record (EOR) can help ensure bonus policies fit with  employment and payroll requirements.

How to handle international employee bonuses

Even if you’ve a basic understanding of the  types of bonuses you can offer and the reasons for offering them, you can still be wondering how to handle the process. All aspects of compensating your international employees can be more complicated than compensating your domestic employees since you’ve to understand different laws, customs, and payroll practices. To put a bonus policy in place for your international employees, make sure you do the following.

1. Consult local experts on employment law

The first and most important step is to understand the laws that govern compensation and bonuses in the country. You can pore over resources on your own, but you’ll want to partner with a lawyer in the country who can help you understand the laws. That way you can create compliant compensation and benefits packages for your new employees.

G-P Gia can help answer country-specific employment and compensation questions. Powered by G-P's global employment expertise, Gia provides guidance on local employment laws and bonus requirements. Companies can quickly access the information they need while reducing their reliance on outside legal counsel for routine compliance questions.

2. Research customary and competitive bonuses

Whether or not you’ve any legal requirements for bonuses, you need to research what sorts of bonuses are customary in the culture. If you want to stay competitive as an employer, you need to offer these customary bonuses. You can find there are other bonuses that are attractive to job candidates and can make the difference in helping you recruit top talent in the country.

3. Inform new employees about bonus opportunities or guarantees

It’s fine to award some bonuses, such as spot bonuses, as an unexpected gift. Inthe case of guaranteed bonuses, you need to inform your new hires about these perks. You can allude to them in your job ads. When it comes to commission bonuses, be sure to include information about these in your employment contracts. Make the standards as clear as possible so that there’s no confusion and employees have specific goals to strive toward.

Streamlining bonuses for international employees

The easiest way to determine how international employees get bonuses is to entrust a global employment platform to assist you with your employees’ compensation and benefits. This saves you from having to research employment laws and compensation best practices in a new country or hire lawyers to help you.

More importantly, it saves you from having to set up a legal entity in the country where you want to hire. This means you can hire a new team of employees in Singapore, Germany, Canada, or wherever you want to expand without spending the time and finances on creating a subsidiary there.

G-P— a global employment platform that can handle international employee bonuses

Managing bonus programs across multiple countries needs an understanding of local employment laws, payroll requirements, and market practices. Whether your company is managing bonus payments, customary supplementary compensation, or discretionary incentive programs, working in step with local requirements is an important part of global workforce management.

When you hire employees through G-P EOR, G-P helps manage payroll and compensation in accordance with local employment requirements, including bonus payments. This allows your company to hire internationally without setting up entities while simplifying ongoing compensation delivery.

For companies researching bonus requirements or monitoring changes to employment laws, Gia gives country-specific guidance on global employment and compensation requirements. Together, G-P EOR and Gia help you work through bonus-related compliance questions while supporting global hiring and workforce management.

To get started, request a proposal.

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