The 2017 State Budget Law has foreseen again the payment by means of monthly twelfths of Christmas and vacation allowance of private sector’ employees.
The private sector employees will receive 50% of the vacation allowance until the beginning of the holiday period, and the Christmas allowance until December 15th, being the remaining 50% of each allowance paid by means of monthly twelfths during the year. In case the employee enjoys interspersed holiday periods, the first 50% of the vacation allowance shall be paid proportionally every holiday period.
If the employee does not want the payment to be made by means of monthly twelfths, he must expressly notify the employer of his option until January 5th 2017.
This monthly twelfths’ allowance payment regime will only apply to fixed-term and temporary employment agreements in case of written agreement between the employer and the employee.
It must be noted that monthly twelfths’ payments of Christmas and vacation allowances will be subject to an autonomous withholding tax, which means it can not be added to the remuneration paid to the employee every month.
Finally, this regime does not apply to allowances concerning vacations accrued before January 5th 2017 and not yet paid, nor even when it was established the payment in advance of the Christmas and vacation allowances by an agreement earlier than said date.