Here in Spain, the retirement pension represents around 80% of the last salary, because it is at this stage where purchasing power is generally lost. Despite this, retirees receive extra pay, twice a year.
As mentioned, when the time of retirement approaches, the purchasing power that the person in question had, decreases year by year and in the case of not having saved something during working life, this stage will suffer. economically.
All those retired people, including retirees, receive their pension, which is made up of 14 you pay annually. This means that it has two extra payments, which are generally charged in the months of June and November. The body that administers the payment is the National Institute of Social Security (INSS).
This pension is paid for overdue monthly payments and the amount will depend on the average salary bases of the years prior to retirement, as well as the age of the retiree. The amount of the extraordinary payments of the months of June and November is the same as that of the ordinary ones, so in those months you will receive double the money.
To learn more about when you can start collecting the retirement pension, El National Institute of Social Security It clearly explains that the economic effects of the pension will begin to take place, as of the day following the date of cessation of work activities, for workers in a situation of high and continuous contributions. If the deadlines have not been adequately met, the application is submitted after more than three months, the benefit will accrue retroactively from the fund to three months from the date of presentation.
The payment of the two extra monthly payments that retirees receive, in situations of crisis and economic instability, has forced the Government of Spain to constantly resort to pension funds and will continue to do so as long as the economy demands it. When collecting the pension, it is recommended that it be done in a bank branch to avoid carrying a considerable amount of money with you that could end up in robberies of the elderly and defenseless.
If you are a victim of any type of robbery or theft, it is important that you know that there is insurance to protect you in these cases, such as the one offered by MAPFRE, which offers assistance in damages received, derived from theft or attempted robbery home and outside of it, as well as the replacement of damaged locks and keys, health care expenses for any injury caused, etc.
Extra payments or extraordinary bonuses
At Article 31 of the Workers' Statute, it is clearly indicated that the worker is entitled to receive two bonuses extraordinary annual payments, one of them for Christmas reasons and received as a Christmas bonus, the other occasion, it is paid in the month established by collective agreement or by an agreement between the legal representatives of the workers and employers.
Consequently, the legislation will only collect as Extraordinary Christmas Bonus, the other depending absolutely on the negotiation in the collective agreement. Similarly, the criterion of most companies and agreements that are reached is that the other payment is made in the month of June, coinciding on the start date of the vacation period, dividing these payments when it is deemed most convenient.
Deductions
Extra payments are not quoted as such, but they have the withholding tax imposed by personal income tax. The truth is that it is not that they do not contribute, but that you have already been contributing for them the rest of the months that you worked.
Each worker makes their contributions to Social Security, automatically every month, based on their salary that are deducted from their payroll. These deductions are made based on the prorated monthly salary, this means that month after month, a specific amount is withheld from your payroll, with the concepts of: common contingencies, unemployment and vocational training as if your salary already had, prorated extra pay.
Added to this, the Withholding Tax on Individuals, known as personal income tax, but this is carried out in a different way since it is a percentage of the effective payroll for that month, without taking into account the prorated salary.
In conclusion, when the worker receives one of his extra payments, he will only have to deduct the personal income tax, since the contributions to Social Security have been forgiven for paying them previously.
Apportionment
At Statute of workers indicates that it may be agreed in a collective agreement, that the extraordinary bonuses are prorated deferred in the twelve monthly payments. The employer cannot decide for himself, the apportionment of the extraordinary payments accrued at 12 months, however, the prorated payment of the extraordinary bonuses has been considered effective and liberatory when these have their origin in an individual agreement and in the agreement collective does not contemplate a prohibition.
In case the Extraordinary bonuses are prorated, They must be clearly indicated and broken down in the payroll, if not, the worker will have the full right to make a claim for the amount demanding its full payment.
Accrual
El accrual of extraordinary payments is annual, in general, unless a prior agreement alters this. This means that the extraordinary bonuses are generated from the day their previous version is paid. At the end of the text you will find an example of how to accrue more explicitly.
Payment for temporary disabilities
The amount of the extra perks It is reduced in proportion to the period of time that the worker remains in a situation of temporary disability. This is because the calculation of the temporary disability benefit, is made based on the contribution base for common contingencies, this concept already includes the extraordinary payments. This means that when we are off due to a common illness or injury, the payment is made based on our gross monthly salary, prorating the extra bonuses on it.
Similarly, temporary disability may be considered by individual agreement or by means of a collective agreement as work performed masterfully for the purposes of accrual from extraordinary payments and consequently, no amount should be reduced.
Payment in the settlement
This occurs when the worker ends his employment relationship with the company, Regardless of the reason for his departure, the former employee is entitled to the proportional part of the extraordinary bonuses that correspond to him at the time of dismissal or resignation, of which payment must be reflected and broken down in the final document of the settlement, along with the other concepts .
Calculation example
A worker is hired on February 1, 2016, with an annual salary of € 28.000 that is distributed evenly in 14 payments, with the two extraordinary payments paid in June and November with an annual accrual. Suppose that today is August 1, in this example we will check, what extra pay you received in June, and what proportional part of the extraordinary payments you have generated up to that moment.
- Registration date: February 1, 2016
- Gross annual salary: € 28.000
- Remuneration for each payment: € 2.000
Accrual of annual extra payments:
The first thing to do is calculate the extra pay paid in June. This pay began to be generated on 1-7-2015 that is, in June of the previous year, but since the employee has been hired until 1-02-2016, it has not been generated completely, but only a part of it :
Number of days elapsed between 1-02 to 1-07 = 150
Amount paid in July is (Amount of the extra pay x No. of days elapsed) / No. of total annual days = 2.000 * 150/360 = € 833,33.
Second, you have to calculate the proportional part of the extra bonuses generated up to that point:
- November pay = 2.000 * 180 days / 360 = € 1.000
- Payment of the month of July = 2.000 * 30 days / 360 = € 166,67
The worker's situation on August 1 is:
- The worker has received as wages (February - July): € 12.000
- The worker has received as extraordinary payments the amount of: € 833,33.
- The worker has accrued, but has not received extraordinary payments: € 1.166,67.
- In the total sum, the worker has generated the amount of: 833,33 + 12.000 + 1.166,67 = € 14.000. However, the company has only paid € 12833,33, leaving the rest pending.
What if the worker had the extra bonuses prorated?
The worker has to charge the same amount, whether or not his extra payments are prorated, therefore, the result must be the same:
- Gross annual salary: € 28.000
- Monthly remuneration: € 2.333,33
- Remuneration received for the months of February - July = 6 * 2.333,33 = € 14.000