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Common Employee Benefits in Mexico

As global mobility professionals, one of the challenges you are likely to face lies in structuring employment contracts for overseas employees. We understand that you might need more information on some of the rules that surround foreign employment, and this article will give you some details on how to handle employee benefits in Mexico.

There are three common employee benefits in Mexico that you will want to pay attention to, and here is a quick summary of each to get you started: 

1.    Aguinaldo (Christmas Bonus)

You may be familiar with paying Christmas bonuses in your own country, but Mexico has a law that is a bit different for bonuses, and not optional.  The basic guidelines to use are:

  • 15 working days pay (which includes total earnings + taxable allowances + commissions)
  • Paid by December 20th (so the employee can use it for the holiday)
  • Employees with less than one year of service will get a pro-rated amount
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2.    Prima (Vacation Bonus)

Once again, you will encounter a few unique policies for offering vacation pay in Mexico.

  • The minimum prima is a 25% additional bonus while actually on vacation. This is on top of the normal salary which continues when the employee is on leave.
  • It can be paid right away when the vacation is taken, or as a lump sum upon completing one year of service (or employment ends). It is the employer’s choice which method to use.
  • Unused leave must also be paid when employment ends (in other words, the employee does not ‘forfeit’ unused vacation time.)

3.    Food Coupons

Grocery Coupons is not a statutory requirement but it is a common benefit that employers utilise. This is a benefit that you might not have encountered before, and you may be wondering how to manage it for your assigned employees.  Very simply, once a month all employees are provided with grocery coupons for personal use. This is like a pre-paid card they can use at the supermarket.  This is what you need to know:

  • The value of grocery coupons is non-taxable in Mexico, and not included in employee income (however, you can use the value to structure other compensation)
  • A new rule in 2017 changed the formula for calculating the monthly amount of grocery coupons to give each employee, so please contact us for the most up to date rules.
  • Companies who offer grocery coupons should have this as a standard program for all employees. i.e. if you offer it to one employee it should be given to everyone.

There are other employee benefits in Mexico, but these three are the most common that you will be using for both expat and resident employees. 

If you’re having trouble with your overseas worker in Mexico, and are overwhelmed by the increasingly complex arena of global mobility, feel free to get in touch for an obligation free consultation. We’ll offer you a personalised cost-efficient solution tailored to your specific needs to make your foreign assignments simple and successful.

Get in touch to find out more about how an Employer of Record Solution can help with your employment needs in Mexico

Read our other articles on Employment in Mexico here:

5 Things to Look Out For When Employing in Mexico 

What are the New Payroll Rules in Mexico in 2017? 

Employee Tax Filing in Mexico 

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