In Mexico, labor laws are designed to ensure that employees receive fair compensation and benefits. Two significant benefits that all employees should be aware of are the Christmas bonus (Aguinaldo) and the Vacation Premium. These benefits are mandated by law and play an important role in protecting employee rights in the country.
1. Christmas Bonus (Aguinaldo)
What is Aguinaldo?
Aguinaldo is a mandatory annual bonus that all employees in Mexico are entitled to receive. It is a year-end bonus provided separately from the regular salary, intended to help employees manage additional expenses during the holiday season.
How Much is the Aguinaldo?
The law requires that the Aguinaldo amount be at least 15 days of the employee's salary. However, some employers may offer more as part of their benefits package,
When is Aguinaldo Paid?
Aguinaldo is paid by December 20th of each year. If the employee onboarding in the middle of the year, the Aguinaldo would be paid proportionally
Example Calculation:
If an employee earns MXN 30000 per month as basic, onboarded before or on 1st Jan of the year, the Aguinaldo would be:
MXN 30000/30 x 15 days = MXN 15000.
If an employee earns MXN 30000 per mont as basic, onboarded on 1st July of the year, the Auguinaldo in the porated amount would be
MXN 30000/30 x 15(184/365) = MXN 7561.65
Before reading about the Vacation Premium, it helps to understand the difference between two related but separate concepts:
Vacation Pay: The employee's regular salary, paid as normal for each statutory vacation day taken. This is not an extra payment — it is simply the employee's regular pay continuing while they are on authorised leave.
Vacation Premium (Prima Vacacional): A separate, additional mandatory benefit under Mexican labor law. It is calculated as a percentage of the employee's salary for their statutory vacation days and is paid at the work anniversary — not when vacation is taken.
2. Vacation Premium
What is the Vacation Premium?
The Vacation Premium is an additional payment made to employees when they reach their work anniversary, in accordance with the applicable policy. It is calculated as a percentage of the employee's salary for their entitled vacation days.
How Much is the Vacation Premium?
The Vacation Premium must be at least 25% of the employee's daily salary for each vacation day in their statutory entitlement. This is calculated based on the employee’s salary at the time of their work anniversary.
When is the Vacation Premium Paid?
The Vacation Premium is paid when the employee reaches their work anniversary — not when the employee takes their vacation days.
Example Calculation:
If an employee earns $500 per day and takes 10 vacation days, the Vacation Premium would be:
$500/day x 25% = $125/day (Vacation Premium)
$125/day x 10 days = $1,250 Vacation Premium, paid at the employee’s work anniversary.
Eligibility:
Aguinaldo: Applicable to all employees in Mexico regardless of position or length of service. Employees who have not completed a full year of service receive a proportional amount based on the time worked. Vacation Premium: Applies to all employees in Mexico regardless of position, once they complete their first full year of continuous service. Employees who have not completed a full year do not accrue Vacation Premium during that period, except for a proportional amount owed at termination.