In El Salvador, workers receive an annual payment known as the aguinaldo, a mandatory year-end bonus regulated by law. The amount is based on the employee’s length of service and is traditionally paid in December as part of the country’s labor benefits.
For decades, this timeline has been a consistent part of the Salvadoran work calendar. That is why 2025 has surprised so many observers.
In a special and unexpected reform, the Salvadoran government authorized the aguinaldo to be paid as early as late October. This unusual decision instantly stood out, not only for breaking with tradition, but also for making the annual bonus available much earlier than anyone anticipated.
President Nayib Bukele explained the reasoning in an official message on X (formerly Twitter), stating that the government — along with all public institutions and state-owned companies — would complete the payment in advance.
He highlighted two main justifications: the government currently has cash surpluses, and an early disbursement could stimulate the national economy by putting money into circulation sooner. He also noted that workers who prefer not to spend the funds immediately can simply leave the payment untouched in their bank accounts.
The policy includes another element that has been well received: aguinaldos up to US $1,500 are exempt from income tax, meaning only the amount that exceeds that threshold is taxable. For many employees, this results in more disposable income at a strategic moment in the year.
Private-sector employers were also given the option to pay early, but with an important condition: the calculation must be made as if the payment were issued in December. This means the employer assumes the financial risk if a worker resigns before the end of the year.
As a result, some companies may still choose to wait and follow the traditional December schedule.
Although it has not been confirmed whether this early-payment window will become a permanent rule or simply a one-time measure for 2025, the government has framed it as a decision in which “many workers benefit, the economy gains momentum, and no one loses.”
For now, this rare shift in timing has turned the aguinaldo into more than a year-end tradition. It has become an economic tool — one that gives Salvadoran workers earlier access to funds and positions October as an unlikely catalyst for local spending.
