How does a vacation bonus work in Spain?

In Spain, it’s a requirement to offer employees a vacation/holiday bonus. Here’s how it works:

• In addition to the employee's base salary, they are entitled to two extra payouts (13th & 14th month salary) known as the pagas extraordinarias (extra or special pay).
• These extra payments are typically made in July and December; each payment amounts to 1/14th of the employee’s total annual salary.
• It is customary for employees to choose 12 payments in a year. However, the employee can choose 14 payments depending on their preference. The employee can change this once a year.
• By choosing 12 payouts, employees will get the 2 extra months pro-rated throughout the year. It is called the pro-rata of the extra payment.
• By choosing 14 payouts, employees will receive the 13th and 14th month bonus in July and December.