Salary Supplements, Everything You Need to Know

May 3, 2023

If you have ever stopped to read your payslip, you will have seen a section to check how much you earn from your salary supplements. Need to know what we're talking about? You should read this post because we will tell you everything you need to know about them. But in addition to that, you might discover that you need to earn more than you should. Can you imagine that reading this article will increase your salary? Indeed, that's reason enough to take a look. 

What are salary supplements?

If you are a regular reader of this blog, you probably expect us to give you the Wikipedia definition, right? In this case, we won't use the online encyclopedia par excellence to explain this concept because we are going straight to the law insider on the definition. A salary supplement means a payment that temporarily augments the base appointment salary. The salary reverts to the base appointment salary when the particular assignment ends. A salary supplement increases the base appointment salary to calculate the maximum amount an employee may receive in additional compensation.

Don't quite get it yet? 

Don't worry; you will understand this concept perfectly when you know your salary structure. On the one hand, there is what is known as the base salary, which is the fixed amount that your boss deposits into your bank account every month, no matter what happens. But, on the other hand, you negotiated some salary supplements in your job interview, or they are part of your collective bargaining agreement. And the sum of those two concepts results in the whole salary on your payslip.

Types of Salary Supplements

As you can see, salary supplements are simple enough. Now, things get more complex when discussing the different types that exist. But don't worry; we will keep the complexity to a minimum. 

Based on the Worker's Personal Conditions

This type includes salary supplements a worker obtains based on personal conditions. We mean they are personal and depend on each individual's circumstances. That's why the most common ones are:

types of Salary Supplement
  • Seniority: in many collective bargaining agreements, employees receive a salary supplement when they reach a certain number of years working for the same company. 
  • Education: the level of education also determines the amount of the salary supplement to be received by the employee. The higher it is (and the more related to the position), the higher the supplement.
  • Specific knowledge: very similar to the previous point, but instead of education, it is the employee's knowledge that positively affects their job performance.

As we say, these are the main ones of this type, but there are more.

Based on job characteristics

For this type of salary supplement, the type of job performed and its characteristics go into account:

  • Night shift: if the work schedule occurs at night (from 10 pm to 6 am), the company may pay a salary supplement for working at night.
  • Occupational hazards: specific jobs expose employees to dangers or a risk to their lives. Therefore, in these cases, they commonly receive an extra payment for performing them.
  • Working on holidays: if an employee works on a day they should be resting, the company must pay them a bonus each time this happens.
  • Productivity is a common supplement, as it consists of paying an employee who performs their job productively. To identify when this occurs, the company usually sets objectives for its employees, and if they achieve them, they receive a productivity supplement.
  • Shift work: in this case, the aim is to compensate workers who have rotating shifts, as this type of schedule usually affects their personal life.
  • Residence: if the workplace is in a location that makes it unattractive, companies can pay a supplement to attract employees. This is often the case in territories such as islands (Balearic and Canary Islands in Spain, for example).
  • Availability: sometimes, even if employees have a set schedule, due to job characteristics, the company may require them at any time. Therefore, you get a bonus for your availability.

Based on company characteristics

In this blog, we have discussed employer branding and other techniques to keep employees happy, more productive and avoid burnout syndrome. And of course, we achieve this by paying them salary supplements if the company gets good results, for example. Another good idea is to use stock options to supplement their salary.

What are consolidatable salary supplements?

Continuing with the topic of types of salary supplements, we group the ones mentioned above into two categories: consolidable and non-consolidable. Starting with the former, a consolidated salary supplement refers to any supplement the employee can claim based on their own characteristics. In other words, these are:

  • Seniority.
  • Knowledge.
  • Qualifications.
  • And so on.

In short, if the employee proves they deserve it, it is considered a consolidable salary supplement. This means that they should receive it periodically, and the company can only withdraw it if the conditions change.

What are non-consolidable salary supplements?

As you can imagine, these salary supplements are just the opposite of the former. In other words, the company can withdraw them if the working conditions change. But what are considered non-consolidable salary supplements? Some examples are:

non consolidable Salary Supplement
  • Night work or hazardous work.
  • Rotating shifts.
  • Residence.
  • Availability.
  • Working on holidays.
  • And many others.

In all these examples, if the job characteristics change, the employee may stop receiving these supplements. And it is evident because, for example, if you earn more for having rotating shifts, and the company decides to abandon that system and have a "normal" schedule, receiving that supplement doesn't make sense.

Can the company remove them?

We would love to answer this question with a simple "yes" or "no," Unfortunately, it's not such a straightforward issue. In principle, a correct answer would be no because, as they are part of the collective agreement, the company must respect them. The problem is that collective agreements can lose their validity, and if that's the case, the company can remove them in the negotiation of the new deal. 

And what about during vacations? In this case, we must also be careful because, in the latest judgments, the courts have ruled that if salary supplements are received regularly, the worker has the right to continue receiving them during their rest period. But be careful because these same courts consider "regularly" to mean having received them for at least six months in the last 11.

In Conclusion

Salary Supplement in conclussion

Salary supplements are payments that temporarily augment the base appointment salary, calculated based on goals or circumstances negotiated in the job interview or collective bargaining agreement. They come in different types depending on personal, job, and company characteristics.

 Consolidable supplements, such as seniority, knowledge, and qualifications, are paid periodically and can only be withdrawn if the conditions change. Non-consolidable supplements, such as night or hazardous work, rotating shifts, residence, availability, and working on holidays, can be withdrawn if the job characteristics change.

Understanding salary supplements is crucial because they can significantly impact one's earnings. Knowing which type of supplement an employee is eligible for and how they can receive it is essential to ensure fair compensation. By identifying their eligibility, workers can negotiate more effectively with their employers or unions to ensure they receive all the supplements they are entitled to. Doing so can increase their earnings and receive fair compensation for their hard work.

On a similar topic, do you know what micromanagement is and how to stop doing it?

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