If you work in Italy, Spain, Portugal, Greece or Austria, your employment contract quietly hands you something most Northern Europeans have to manufacture with willpower: an extra salary you never budgeted to live on. The Italians call it the tredicesima, the Portuguese split theirs into a Christmas and a holiday subsídio, the Austrians receive their 13th and 14th taxed at a gentle rate. Whatever the local name, the money lands each year on top of the twelve pay packets you already run your life on.
Here is the honest answer up front: the 13th salary is the single easiest money in Europe to invest, and almost nobody does it. You already prove every year that you can live on twelve salaries. The thirteenth is, by definition, surplus to your monthly budget. That makes it the rare windfall that requires no belt-tightening at all to redirect. Send it straight to a low-cost global ETF instead of letting it dissolve into December, and one extra salary a year can build a six-figure sum over a working lifetime.
I have watched friends in Milan and Lisbon treat the 13th as a licence to upgrade the Christmas they were already having. Enjoying it is fine. But treating all of it as spending money is a choice, not a law, and one that costs more than people realise.
Where the 13th (and 14th) salary actually exists
The custom is concentrated in Southern and Central Europe, and the details vary more than the folklore suggests. In some countries the extra payments are a statutory right; in others they come through collective bargaining or sector agreements. Some employers “prorate” the extra months across your twelve payslips, which quietly removes the lump you could have invested.
| Country | Extra payments | Typical timing | Tax note (verify locally) |
|---|---|---|---|
| Italy | 13th (tredicesima); 14th in some sectors | December; June/July | Taxed as ordinary income |
| Spain | Two pagas extraordinarias (often “14 payments”) | July; December | Ordinary income; can be prorated over 12 |
| Portugal | 13th (Christmas) and 14th (holiday) subsídios | December; June | Ordinary income; sometimes paid in monthly twelfths |
| Greece | Christmas, Easter and holiday allowances (private sector) | December; April; summer | Ordinary income; public-sector bonuses cut in the crisis years |
| Austria | 13th and 14th (Urlaubsgeld, Weihnachtsgeld) | June; November/December | Favourable flat rate on the “Jahressechstel” band |
Treat every figure and rule here as 2026-vintage and approximate. Rules shift, sectors differ, and public-sector arrangements often diverge from private ones. Confirm your own entitlement against your collective agreement or a payroll adviser, and check the current statistics and wage data on Eurostat if you want the macro picture. Austria’s treatment is the standout: a portion of annual income (the so-called Jahressechstel, roughly a sixth) is taxed at a reduced rate, which is why the 13th and 14th feel materially lighter there. The current bands are set by the tax office, so check the Austrian Federal Ministry of Finance for the figures that apply to you.
Why the 13th salary is the easiest money to invest
Behavioural economists have a slightly clumsy name for what is happening here: mental accounting. We treat money differently depending on which mental “pot” it arrives in. Usually that works against us, because a windfall feels like play money and gets spent freely. The 13th salary lets you flip that bias in your favour.
Your monthly budget already balances on twelve salaries, so redirecting the thirteenth does not force you to give up anything you enjoy month to month. Compare that with carving an extra €150 out of every payslip: that hurts, because it competes directly with your standard of living. The 13th competes with nothing. It is the closest thing to painless saving that exists.
The trap is that “surplus” and “spent” collapse into the same thing every December unless you build a rule. Money that is not consciously assigned gets absorbed. The whole game is to assign it before it arrives.
The compounding math of one extra salary a year
Let me put rough numbers on it, and please read them as illustrative rather than promised. Suppose your 13th salary nets you around €2,000 after tax, and you invest that amount once a year into a global equity ETF. At a long-run nominal return in the region of 6% to 7% — the sort of figure a diversified world index has produced historically, with no guarantee it repeats — that single annual contribution compounds to somewhere around €100,000 to €130,000 over 25 years.
That is one salary a year — no extra hours, no side hustle, no cutting monthly spending. Just refusing to let the thirteenth evaporate. Stretch it over a full career, invest a larger 13th, or add the 14th in the years you can spare it, and the figure climbs from “meaningful” to “this changed my retirement”. The lesson I keep relearning after eleven years of doing this: consistency on the money you already have beats chasing a cleverer return.
The plan: turn a habit into a standing rule
The reason most people fail here is not ignorance, it is friction. December is busy, and a decision you make fresh each year is one you will eventually skip. So make it once, in advance, as a rule.
1. Decide the split before December
My default suggestion is to send 50% to 100% of the 13th straight to your ETF plan, and keep the 14th or holiday payment for actual living and travel if your country has one. If you only receive a 13th, and Christmas genuinely needs part of it, invest a fixed slice — even 50% — rather than negotiating with yourself in the moment. A rule you keep beats an ideal you abandon.
2. Route it through an automated savings plan
The cleanest setup is a recurring ETF savings plan at a low-cost broker, where you can drop in a one-off contribution when the 13th lands. If you have not built this yet, our guide to automating an ETF savings plan walks through the mechanics, and the roundup of the best brokers for ETF savings plans in Europe covers who does this cheaply in your market. Once it exists, the 13th is a single order, not a project.
3. Pick one fund and stop shopping
For a hands-off, decades-long contribution, a single accumulating all-world ETF does the whole job — global diversification, dividends reinvested inside the fund, one line in your account. If you want to compare tickers and total costs, our UCITS ETF comparison tool lets you line them up side by side, and if this is all new, start with the beginner’s guide to ETFs first. The specific fund matters far less than the habit of feeding it every year.
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The free 12-page Starter Kit gets you to a first, sensible portfolio faster: the 7-filter fund shortcut, the 3-question broker matrix, and the 7 costliest beginner mistakes.
Lump sum in December, and don’t try to time it
When the 13th arrives, the boring move is the right one: invest it promptly as a lump sum into your chosen fund. Waiting for a “better entry point” in January usually just leaves the money idle in cash, and markets rise more often than they fall. Time in the market has beaten timing the market for the vast majority of investors, myself included on the occasions I was tempted to be clever.
The one exception is nerves. If deploying a whole salary at once keeps you awake, split it across two or three months. That is a psychological accommodation, not an optimisation, and it is often worth it, because the investor who panics and sells does far worse than either approach.
What I’d do
If I received a 13th salary, I would set a standing rule this year and never revisit it in December: the whole 13th goes into my accumulating all-world ETF the week it arrives, and any 14th or holiday payment stays with me to actually enjoy. I would automate the plan so the only manual step is a single lump-sum order. And I would deliberately ignore the market’s mood when I place it.
If a full salary feels like too much to lock away, start at 50% and raise it next year once you see nothing in your monthly life actually changed. The 13th is the gentlest on-ramp to investing that European payroll offers. Apply the same reflex to any lump that lands outside your monthly budget, as our weekend plan for a windfall lays out — and if you would rather build the habit through steady monthly contributions, the same fund and broker setup works for a plain monthly investing plan too.
Frequently asked questions
Q: Which European countries pay a 13th salary?
A: The custom is strongest in Southern and Central Europe — Italy (tredicesima), Spain, Portugal, Greece and Austria all commonly pay a 13th and often a 14th, whether by law or collective agreement. Some countries such as Germany pay a “Weihnachtsgeld” through sector agreements rather than statute. Always check your own contract or collective agreement, because entitlement and amount vary by sector and employer.
Q: Is the 13th salary taxed differently from normal pay?
A: In most countries the 13th is taxed as ordinary employment income, so it does not escape tax. Austria is the notable exception, applying a favourable flat rate to a defined band (the Jahressechstel). Treat any tax figure as approximate for 2026 and confirm the current rules with your payroll department or a local tax adviser.
Q: Should I invest the whole 13th salary or just part of it?
A: If your monthly budget already runs on twelve salaries, the 13th is genuine surplus, so investing all of it is defensible and painless. If Christmas or a real need claims part of it, set a fixed rule — say 50% invested — rather than deciding in the moment. A consistent partial habit beats an all-or-nothing plan you abandon.
Q: Is it better to invest the 13th as a December lump sum or spread it out?
A: For a single salary-sized amount with a long horizon, investing it promptly as a lump sum is statistically the stronger move, because markets rise more often than they fall and cash left waiting tends to stay idle. Spreading it across two or three months is a reasonable choice only if a one-off deployment would rattle you into inaction. Do not try to time a “better” entry point.
Q: What should I invest my 13th salary in?
A: For a hands-off annual contribution, a single low-cost accumulating all-world UCITS ETF covers global diversification in one holding and reinvests dividends internally. You can compare specific funds and their total costs before choosing, and always check the current factsheet for exact figures. The habit of contributing every year matters far more than picking the “perfect” fund.
Q: What if I need the 13th salary to cover Christmas costs?
A: Then invest whatever slice you honestly can and enjoy the rest without guilt — even 25% invested every year compounds into a real sum over decades. The goal is to build a repeatable rule, not to win a single December. Over time, many people find they can raise the invested share once they see their monthly life is unaffected.
This guide is part of our hub on investing a windfall, inheritance or payout — browse the full cluster for related situations.
European UCITS/ETF investor with 11+ years building a global dividend and index portfolio, and founder of Financial Expert Class. I write every guide here from first-hand experience investing across EU brokers and tax regimes — not theory. More about me →