The phrase refers to the computation of a mandatory extra salary payment in specific Latin American and Caribbean countries. This payment, typically distributed in two installments throughout the year, is calculated based on an employee’s accumulated earnings during a defined period. For instance, if an individual earns a total of $12,000 in salary between January and June, their first installment would be equivalent to half of that amount, or $6,000.
This legally mandated benefit provides a significant financial boost to workers, particularly during periods of increased expenses such as holidays. Its origins often lie in labor laws designed to improve economic security and purchasing power for the workforce. It functions as a form of forced savings, ensuring employees receive a lump sum to cover anticipated or unexpected costs. The impact is felt both at the individual and macroeconomic level, stimulating consumption and contributing to economic growth.