Saturday 9 December 2023

Aguinaldo just around the corner: 10 ways to get the most out of your bonus

Planning is the key to healthy finances at the end of the year, according to experts

Paying the bills


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8 December 2023 - At The Banks - Source: BCCR

Paying the bills


QCOSTARICA — With Christmas just around the corner, salaried workers will receive more than ¢1 billion colones in Aguinaldo or year-end bonuses.

Avoiding expensive gifts, maintaining emotional control, and not getting into debt are vital recommendations for the year-end bonus – Aguinaldo – that is just around the corner

The extra money, which basically for simplicity’s sake is equal to one month’s salary, for many represents extra money that can mean an opportunity to start a life with financial freedom, but it can also be the beginning of a spree of spending and debt that will take money out of your wallet throughout the coming year.

Financial experts recommend planning in the coming weeks as the main strategy to get the most out of your aguinaldo and help prevent you from throwing away what you earned for a whole year of work.

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Maintaining emotional control, avoiding the purchase of expensive gifts and even projecting future expenses and savings are other strategies that would help you keep your finances healthy and make 2024 more bearable.

“We all need to plan well in advance how we are going to spend our money. Although the word budget is strange to some and even a bad word to others, its meaning can make a difference in our lives,” said Melvin Garita,  Deputy General Manager of Strategy at Banco Nacional.

The experts also recommend starting to think now about how the 2023 Aguinaldo and even next year’s will be invested.

By law, in Costa Rica the Aguinaldo is to be paid during the first 20 days of December, after which employers face sanctions for non-compliance.

For the public sector, the central government announced it will pay the Aguinaldo on December 6, while autonomous public institutions such as ICE, AyA, CCSS, etc, pretty much follow the lead of the central government, paying the Aguinaldo on the same day or pretty close to it.

Financial education is vital so that people do not live in debt and carry debt throughout their working lives.

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“It is vital that people have an idea of what the priority of the Aguinaldo is, that is, they must establish what things we have to do; for example, a medical exam, house or car repair, and thus guide us towards a better investment of money. To have effective management of the Aguinaldo, consumers should think about how to invest it from the middle of the year and even from January itself, and thus get the best out of it,” said Danilo Montero of the Oficina del Consumidor Financiero.

On the other hand, experts recommend that you prioritize expenses, meet commitments, look at the possibility of paying down or paying off debts and, of course, not make new financial commitments unless you have the solvency to meet them.

One of those priorities, for car owners for example, is to have the cash to cover the cost of the Marchamo or annual circulation permit that must be paid by December 31. This year, with the reduction of up to 50% of the property tax portion of the Marchamo, there will be extra cash to follow or at least consider the advice of the experts.

“It all comes down to good financial education and commitment to payment. If you have the money to do so, it is advisable to pay in cash and thus have more liquidity later. Now, well-managed debt is not bad. This is about having enough money to pay and not complicating your life,” said Daniel Suchar, independent financial analyst.

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The key is planning, and avoiding throwing away the Aguinaldo with a series of “gastos de hormigas” – a series of small payments for services or products, sometimes unnecessary, we make almost unconsciously.

For 2023, the vast majority of the ¢1 billion colones in Aguinaldo payout will be to workers of private companies, which is basically triple that of the public sector of the central government.

How to calculate your Aguinaldo

The end-of-year bonus, also known as the thirteenth salary, is an extra payment given to employees in December. Although the amount of the payment depends on several factors, it usually matches the average of an employee’s monthly salary (and bonuses) paid between December 1 of the previous year and November 30 of the current year.

For example, and simplicity’s sake, if you earned say X amount for the first six months and then Y amount for the remainder six months, you would add all 12 months and then divide by 12.

The Aguinaldo is a mandatory payment to salaried employees in the private and public sectors.

A bit of history

The practice of the Aguinaldo or thirteenth salary  has its roots in Italy, where it was initially named ‘gratifica natalizia’ (Christmas bonus) being a voluntary donation without any obligation that the employer recognized to its employees when entering the Christmastide. It was legalized in the 1937 collective labor agreement for factory labour and was extended to all kinds of work in 1946 and by presidential decree in 1960.

While in Costa Rica the Aguinaldo is paid during the first 20 days of December, around Central America, it is paid as follows:

  • In Nicaragua, the one month’s salary is paid by December 10
  • In Panama, it is paid in three equal parts on 15 April, 15 August, and 15 December
  • In El Salvador the Christmas bonus is based on years of service
  • In Guatemala, it is paid at mid-year. A mandatory 14th-month bonus is paid at the end of the year; both are equal to one month’s salary.
  • In Honduras, it is paid in December. A mandatory 14th-month bonus is paid in July; both equal one month’s salary.


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