If you have never worked or dealt with Italian payroll you might be surprised by its particularities, one of which is the so-called quattordicesima mensilità which translates as the 14th salary, and is an additional remuneration, different from the ordinary salary.
Similar to the 13th salary, which is quite common for other EU countries, the 14th salary is subject to the National Collective Labor Agreement (NCLA) provisions applied to the employee and are applicable only for employees of certain levels. It is only a contractual provision and not a general legal obligation for all workers.
One of the most widespread NCLA that applies quattordicesima is NCLA Commercio (Trade sector).
In Italy, NCLAs are also divided by levels of employment, having different number of levels for each type of NCLA and special NCLAs s for Executives (High Level Managers) or so-called Dirigenti. The 14th Salary applies selectively, in certain employment sectors. For example, Quattordicesima is applied to Dirigenti hired unde NCLA Commercio (Trade Executives), but not valid for Dirigenti of hired under NCLA Industria (Industry).
In general quattordicesima is paid in June/July and refers to the previous 12 months. It must be paid separately from the monthly pays, similar to the 13th Salary.
In case the employee did not work the entire 12 months, the amount due must be divided by the months worked. Hence, the gross salary is divided by 12 and multiplied by the corresponding number of months of activity. Month of activity is considered the month in which the employee has worked at least 15 days. If the employee works for less than half of the month (ex. hired the 18th or dismissal the 14th) that month will not be considered for the calculation of the quattordicesima. For the calculation of the quattordicesima the employer has to consider the gross salary received by the employee from July 1st to June 30th of the following year and divide it by 12.
The following salary elements that have to be considered in the gross salary for the calculation of the 14th salary: holidays, permits, sickness production or productivity bonuses, commissions. Overtime, reimbursement of expenses and non-recurring allowance are not included the calculation of the 14th salary.