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Variable wage components: AWS, bonus, variable pay

The variable portion of your wages can include the 13th month bonus or Annual Wage Supplement (AWS), bonus and variable payments. These payments are not compulsory, unless they are in your contract.

Annual Wage Supplement (AWS)

The AWS is also called the “13th month payment”. It is a single annual payment on top of an employee’s total annual wage.

AWS is not compulsory. Payment depends on what is in your employment contract or collective agreement. Employers are encouraged to give their employees AWS to reward them for contributing to the company’s performance.

Your employer can negotiate a lower amount of AWS if business results are exceptionally poor for the year.

Limits on AWS

Your employer cannot pay AWS of more than 1 month’s salary if they did not pay any AWS before 26 August 1988.

Bonus

A bonus is a one-time payment to reward employees for their contributions to the company. It is usually offered at the end of the year.

Bonus payments are not compulsory, unless specified in the employment contract or collective agreement.

Variable payment

A variable payment is an incentive payment to increase productivity or reward employees for their contributions.

Variable payments are not compulsory, unless specified in the employment contract or collective agreement.