A Complete Guide to 13th Month Pay for Employees in Africa

A Complete Guide to 13th Month Pay for Employees in Africa

This is a complete guide to the 13th month pay for employees (remote, distribute or onsite) teams based in Africa. 

We’ll show you the following: 

  • What precisely the 13th month payment entails. 
  • Difference between 13th and 14th month pay. 
  • How to calculate the 13th month salary
  • The general practices and statutory requirements for the thirteenth-month pay across Africa. 
  • And more. 

Let’s get started. 

What Is the 13th Month Pay? 

If you stay in countries like Ghana, Kenya or Tunisia, you probably have never heard of a 13th-month payment. Yet it is a fairly common practice not only in Africa but across the world

Understanding the 13th and 14th-month pay is crucial if you’re considering hiring remote or distributed teams based in Africa or establishing registered entities on the continent

Else you run the risk of non-compliance, which could have grave consequences for your business. 

Let’s x-ray some common questions you may ask about the 14th and 13th payment. 

Thirteenth-month or “13th month salary” is a form of compensation given to employees, usually at the tail end of a Gregorian year. This package usually equals a typical month’s salary or one-twelfth of an employee’s salary. 

Is 13th Month Pay Mandatory? 

As with most other items, the status of the 13th and 14th pay varies depending on the countries involved

In some countries, the 13th salary is compulsory; in others, it can be customary (where organisations don’t have to pay it but do anyway) or not recognised.  

In countries where it is compulsory, a failure to make the required payments could attract hefty fines from the government

Read on to see which African countries mandate the 13th-month pay and which do not. 

How to Calculate 13th Month Pay

How to Calculate 13th Month Pay

Different countries adopt a variety of ways to calculate the 13th salary.  

In some countries, you calculate the 13th month’s payment as an addition to the employee’s annual salary. So if an employee’s annual salary is $60,000, for example, the 13th month salary would be an additional $5,000. 

In other countries, the 13th salary is paid as a part of the employee’s annual salary. In other words, the employer will divide the yearly salary into 13-equal parts and pay each sum every month, including the 13th. So using the previous example, the 13th month’s salary would be about $4,615. 

In other climes, the 13th salary is paid as a bonus relative to the annual salary or as a fraction of the highest paying months

Still, some countries compute the 13th month as an average of the last three paid months. 

13th-Month and 14th-Month Pay: Is there a Difference? 

In many cases, 13th and 14th pay are used together and often denote “extra pay.” 

However, they sometimes mean different things. For example, In Angola, the 13th pay is regarded as a mandatory vacation bonus, while the 14th pay is understood as the “Christmas bonus.

Usually, in cases where the 13th and 14th salaries refer to different things, the 14th pay will often point to yet another income that employees get as a part of an incentive package. 

Guide to the 13th Month Salary Across Africa 

No 13th Month Pay 

These countries have no statutory regulations for the 13th month payment, and where it is not customary to pay the same. 

These countries include Algeria, Ghana, Kenya, Malawi, Niger, Rwanda, Tanzania, and Tunisia. 

Countries that Pay the 13th Month Salaries 

Countries that pay the 13th Month Salaries 

We can divide these countries into two groups. First, they include countries where the 13th month pay is mandatory because it is a statutory requirement and other countries where it is customary but not mandatory to pay the same. 

They include: 

  • Angola 

The 13th and 14th month pay is split into two.  

The first half is paid as the 13th salary, specifically for vacation purposes. This is paid just before the employee goes on vacation.  

The second half is paid as the 14th salary and is usually considered a Christmas bonus. 

  • Burkina Faso 

The 13th month salary is not mandated, but employers usually reward employees with bonuses at year-end. 

  • Ethiopia 

Whilst there are no requirements to remunerate the 13th salary; however, bonuses are typical. 

  • Ivory Coast / Cote D’Ivoire 

There are no statutory requirements for the 13th month; however, bonuses are standard and are usually based on seniority, attendance and others. 

  • Morroco 

There is no legal requirement to pay in Morocco. However, it is common practice to remunerate 13th month bonuses and/or seniority bonuses. 

  • Mauritius 

Employers pay in two ways, depending on which is higher. The first involves a year-end bonus equal to one-twelfth of the annual earnings figure OR gratuity in line with the End of Year Gratuity Act 2001.  

But there’s a caveat: Employees must be employed for the entire year or a part of the year, remaining employed as of December 31. 

But there’s still one other layer: 75% of this bonus must be paid at the most, five working days before December 25 and the balance, no later than the last working day of the year. 

  • Nigeria 

There are no statutory requirements for Nigeria. However, end-of-year bonuses are typical at the employer’s discretion. 

  • Senegal 

Here, the 13th-month pay is customary and usually paid at year-end. 

  • South Africa 

Similar to Senegal, there are no statutory requirements for the 13th-month payment. However, it is customary to pay the same every December. 

Conclusion 

Workforce Africa helps businesses hire, pay, manage and retain remote and distributed teams based in Africa, leveraging bespoke PEO and EoR services.  

Need help with Payroll, Compliance, Hiring or more? Please schedule a consultation today. Let’s help you succeed.