Have questions? Ask us!

Calculating Vacation Premiums and Christmas Bonus (Aguinaldo) in Mexico

Employing abroad will mean that you will need to offer a new set of benefits for your workers that meet local employment laws, and that includes paid time off and bonuses.  Some employers may be in the practice of offering bonuses or vacation pay as an optional benefit, but many countries like Mexico make those a requirement by statute. 

If you are new to hiring in Mexico, how will you know the statutory minimum paid time off and bonus amounts for both locals and expats?  This guide will give you the basics to get you started so that your employees are receiving the benefits they are entitled to.

Subscribe to get more insights like this.

Paid time off  and bonuses in Mexico

There are several categories of paid time off and related bonuses in Mexico, including:

  • Paid Vacation Time: 6 working days annually, plus 2 days added for every additional year
  • Vacation Premium: An amount added to the salary while on vacation
  • Christmas Bonus: Mandatory bonus for the holiday
  • Legal Holidays: 7 paid during the year

Client Case Example

One of our clients with employees in Mexico wanted to know specifically how the vacation premium and Christmas bonus were calculated.

What is the Vacation Premium in Mexico?

Known as Prima, the vacation premium is an additional cash benefit given to employees for use on their vacation.  It is calculated as a minimum of 25% of daily salary multiplied by the number of days of vacation.  Some employers do grant more than the minimum.

What is Aguinaldo in Mexico?

A Christmas bonus (or Aguinaldo) is mandatory in Mexico, and should be paid by the 20th of December so the employee can use it for the holidays.  The amount is equal to 15 working days of salary plus taxable allowances, but there is a formula used where the gross annual salary per year is divided by 365 days, and that amount is multiplied by 15 days.

Example:

$60,000 gross per year/365 days = $164.38 x 15 days = $2465.70

The full bonus amount is given to any employee with more than one year of service, and those with less will receive a pro-rated amount, known as a proportional bonus.  Any accrued, unpaid Aguinaldo must be paid if there is a termination or resignation.

Do you need more information about Mexico?

If you are hiring in Mexico, you might need more information, such as:

How is the proportional Aguinaldo bonus calculated?

What if the bonuses or paid time off in the employment contract are less than the statutory minimums?

Are the vacation time and bonuses the same for expats and locals?

These are the types of issues that we handle for our clients, including employee benefits, payroll, tax compliance and immigration.  We make international employment simple.

 Need more information about employing in a new country? Learn more about:

 

 

Looking to hire an employee in Mexico? Get in touch.

Related Articles

Join 5000+ employers managing overseas employees

Subscribe for tips on hiring and managing international workers!