What Is a Vacation Bonus (Prima Vacacional) in Mexico?

A vacation bonus is an extra payment that employees receive when they take their legally required vacation days. Under Mexican Federal Labor Law, this bonus must be at least 25 percent of the employee’s regular daily pay. It is separate from normal vacation pay and must be provided once the employee completes one full year of service.

• Simple legal definition
  The vacation bonus is an additional payment of at least 25 percent added to the employee’s vacation pay, as stated in Article 80 of the Federal Labor Law. It applies only when employees take their earned vacation days.
  
  

• Purpose of the benefit
  The bonus helps employees cover extra personal or family costs during time off. Mexico’s labor system views paid rest as essential for health and productivity.
  
  

• Vacation pay vs. vacation bonus
  Vacation pay is the employee’s normal salary for time off. The bonus is the extra 25 percent paid on top. Both must be paid together when the employee takes a vacation.
  
  

• Who receives it
  All employees with at least one year of continuous service must receive vacation days plus the vacation bonus. It applies to all types of employees hired under an EOR in Mexico.
  
  

This structure ensures full compliance with Mexican labor law, something many global EOR platforms fail to manage correctly.

Legal Basis for Vacation Bonus (Articles 76, 78, and 80 of the Federal Labor Law)

Mexico’s Federal Labor Law clearly defines vacation rights and the vacation bonus, making it a mandatory benefit for every eligible employee.

Articles 76 and 78 establish how many vacation days an employee earns, while Article 80 requires employers to pay at least a 25 percent bonus when those days are taken.

This bonus cannot be negotiated down (but it can be negotiated up) or replaced by any other benefit, even if the employee agrees. It is a legal obligation that applies to all employment relationships in Mexico.

• Article 80: Minimum 25 percent bonus
  Article 80 states that employees must receive a vacation bonus of no less than 25 percent of their regular daily salary. Employers cannot offer less or skip the payment.
  
  

• Articles 76–78: Vacation entitlement rules
  These articles define how vacation days increase with seniority and confirm that vacations must be taken every year. The bonus applies every time employees use their days.
  
  

• Non-negotiable and mandatory benefit
  Employers cannot waive or modify the bonus. Any contract clause removing it is invalid under Mexican law.
  
  

• Applies to all employee types
  The requirement covers permanent, temporary, full-time, and part-time employees hired through any legal employer, including an EOR.
  
  

A real Mexico EOR ensures full compliance with these articles, unlike global platforms that often misinterpret Mexican labor rules.

Minimum Vacation Days in Mexico and How They Affect Vacation Bonus

Mexico’s 2023 labor reform increased minimum vacation days, giving employees stronger rights and a higher overall vacation bonus. Under the updated rule, employees now receive 12 days of paid vacation after one year of service.

This number grows with seniority, which means the total vacation bonus also increases as employees earn more days. Since the bonus is paid every time a vacation is taken, longer entitlements directly raise the amount an employer must pay.

• 12-day minimum after the 2023 reform
  Employees now earn 12 paid vacation days after their first year. This represents a significant increase from the previous six-day rule and has a substantial impact on total vacation bonus amounts.
  
  

• Seniority increases both days and the bonus
  Vacation days rise each year until year five, then every five years afterward. As days increase, the 25 percent bonus applies to more days, raising the total payout.
  
  

• Counted in working days
  Mexico counts vacation in working days, not calendar days. Rest days and holidays do not reduce the employee’s entitlement.
  
  

• Must be taken within 6 months
  The law encourages employees to take their vacation within six months after earning it. The bonus must be paid at the time the vacation is taken.
  
  

A compliant Mexico EOR accurately manages these calculations, which many global providers often mishandle.

How to Calculate Vacation Bonus in Mexico

Calculating vacation bonus in Mexico is straightforward once you understand the salary components and the legal formula. The Federal Labor Law requires employers to pay at least 25 percent of the employee’s regular daily salary for each vacation day taken.

This calculation applies when the employee takes a vacation or when a payout is required at termination.

• Formula for vacation bonus
  The legal formula is: (Daily salary × Vacation days × 25 percent)
  Daily salary means the employee’s regular fixed pay divided by 30 days. Variable pay may be included when it is a consistent part of the employee’s income.
  
  

• Numeric example
  If an employee earns 900 MXN per day and has 12 vacation days:
  900 × 12 × 0.25 = 2,700 MXN vacation bonus.
  
  

• Salary components explained
  Fixed salary is always included. Variable payments such as commissions or bonuses may be added if they form part of the employee’s average salary. SBC (base contribution salary) is used for social security but not for calculating vacation bonus.
  
  

• Prorated vacation bonus at termination
  If an employee resigns or is terminated, unused vacation days must be paid in cash. The bonus is calculated using the same formula, based on the proportional vacation days earned up to the last working day.
  
  

A compliant Mexico EOR ensures all these calculations are accurate, preventing payroll errors or legal exposure.

When Is Vacation Bonus Paid?

Mexican labor law does not specify an exact date for paying vacation bonus, but it does require that employees receive the bonus at the time they take their vacation.

Because of this, most compliant employers follow common payroll practices to ensure the payment is timely and correctly documented.

The key principle is that the employee must receive both vacation pay and the 25 percent bonus before or during the period they are away from work.

• Paid when the vacation is taken
  The most common and legally safe approach is to pay the bonus at the moment the employee starts their vacation period. This ensures full compliance with Article 80.
  
  

• Paid in the payroll period when vacation occurs
  Some employers include the bonus in the regular payroll cycle. This is acceptable as long as the payment aligns with the vacation dates and is not delayed.
  
  

• Payment during resignation or termination
  If an employee resigns or is terminated, any unused vacation days must be paid. The vacation bonus is calculated on the remaining proportional days and included in the final paycheck.
  
  

• Employees who delay or skip vacation
  Even if an employee does not take a vacation within the legally required six-month period, the vacation bonus still applies once the vacation is actually taken. If the employment relationship ends, any accrued but unused vacation must be paid out together with the corresponding vacation bonus.
  
  

Clear processes and accurate payroll handling prevent disputes. A Mexico-based EOR manages these details carefully so employers stay fully compliant.

Taxation and Payroll Treatment of Vacation Bonus

Vacation bonus is considered part of the employee’s taxable income in Mexico, but it has specific limits and rules that affect how it is handled in payroll. Employers must calculate the bonus correctly, determine how much is taxable, and apply the proper Mexican Social Security Institute (IMSS) and withholding rules.

Understanding these details is essential because incorrect reporting can create issues with the tax authority (SAT) or IMSS.

• Taxable treatment under Mexican law
  Vacation bonus is taxable, but only the portion above a legal exempt limit is subject to income tax. The exempt amount equals 15 days of UMA per year, and anything above this is taxed normally.
  
  

• Impact on IMSS Contribution Base Salary (SBC)
  The vacation bonus (prima vacacional) is integrated into the SBC on an accrual basis from the first day of employment. Although it is paid when vacation is taken or upon termination, it is earned over time and gradually included in the IMSS contribution base salary.
  
  

• Effect on SBC and payroll components
  Since it is not part of SBC, it does not increase IMSS contributions, INFONAVIT payments, or other social security-related calculations. It is only included in the employee’s taxable income when applicable.
  
  

• Legal limits and exemptions
  The UMA-based exemption prevents excessive taxation. Employers must track this exemption annually to avoid under- or over-withholding.
  
  

A clear understanding of these tax rules helps ensure accurate payroll reporting and prevents compliance issues with Mexican authorities.

What Happens If an Employer Fails to Pay Vacation Bonus?

Failing to pay vacation bonus is a direct violation of the Federal Labor Law and can create serious compliance problems for employers in Mexico. Labor authorities view this benefit as mandatory, and missing or incorrect payments can trigger inspections, fines, and claims.

For employees, the law provides clear protections and the right to recover any unpaid amounts.

• Fines and sanctions during inspections
  Labor inspectors may impose financial penalties when employers fail to grant vacations or pay the vacation bonus correctly. Under Article 994, section I of the Federal Labor Law, fines may range from 50 to 250 times the Unit of Measure and Update (UMA).
  
  

• Escalation risks for repeated violations
  Repeated non-compliance or violations affecting multiple employees may lead to increased enforcement actions, labor disputes, and reputational damage for the employer.
  
  

• Employee rights to claim unpaid bonus
  Employees can legally demand an unpaid vacation bonus at any time during the valid claim period. If the employer denies payment, the claim may escalate to the labor authorities or the courts.
  
  

• Statute of limitations for claims
  Employees generally have one year to claim the unpaid vacation bonus. This period begins when the benefit should have been paid, or at the moment of termination.
  
  

• Risks for global companies with poor payroll compliance
  Global platforms that lack real Mexican payroll operations often miscalculate or skip mandatory benefits. This creates exposure to fines, back payments, and legal disputes.
  
  

Ensuring timely and accurate payment protects the employer and maintains full compliance with Mexican labor regulations.

Common Employer Mistakes and Compliance Risks

Many employers unintentionally create legal and payroll problems by mishandling the vacation bonus. Because the benefit is mandatory and tied to multiple payroll components, even small errors can lead to fines or employee claims.

Understanding the most frequent mistakes helps companies avoid exposure and stay aligned with Mexican labor law.

• Paying vacation without the 25 percent bonus
  One of the most common errors is paying only vacation days and forgetting the bonus. This is a direct violation of Article 80 and can trigger penalties during audits.
  
  

• Miscalculating the daily salary
  Incorrectly defining the daily salary (quotidian salary) leads to underpayments. Errors often occur when employers exclude regular variable income or use an incorrect divisor.
  
  

• Not accruing vacation liability
  Companies must recognize vacation and vacation bonus as accounting liabilities. Failure to do so can create financial inconsistencies and audit risks.
  
  

• Not paying the bonus at termination
  Any unused vacation days must be paid out with the bonus when employment ends. Skipping this is a frequent compliance issue.
  
  

• Incorrect payroll processing
  Wrong tax treatment, poor documentation, or misapplied exemptions can cause SAT or IMSS inconsistencies.
  
  

• Using non-compliant platforms or partners
  Global tools that lack real Mexican expertise often miscalculate benefits, exposing companies to back payments and legal claims.
  
  

Avoiding these mistakes strengthens compliance and protects both the employer and the employee relationship in Mexico.

Vacation Bonus on Termination or Resignation

When an employee resigns or is terminated, the vacation bonus becomes part of the final settlement, known in Mexico as the finiquito. Employers must calculate and pay any unused vacation days plus the corresponding 25 percent bonus.

This applies regardless of the type of termination, and failure to include it correctly can lead to legal claims or fines.

• Vacation bonus in the finiquito
  The finiquito must include all accrued but unused vacation days and the 25 percent vacation bonus. This payment is mandatory even if the employee never took a vacation during the year.
  
  

• Proportional bonus for unused days
  Employees earn vacation time gradually throughout the year. If employment ends mid-year, the employer must pay the proportional vacation days earned up to the last working day, plus the bonus.
  
  

• Calculation across termination types
  In resignations, terminations with cause, or terminations without cause, the method remains the same:
  
  Daily salary × accrued vacation days × 25 percent.
  Only severance components change based on the termination type, not the vacation bonus rule.
  
  

Understanding these requirements ensures a correct and fair final settlement, reducing the risk of disputes and keeping the employer fully aligned with Mexican labor regulations.

Vacation Bonus for Remote Employees and Global Teams in Mexico

Vacation bonus applies to every employee in Mexico, regardless of where they work or where their employer is based. Remote, hybrid, and onsite workers all receive the same legal protections under the Federal Labor Law.

Foreign companies hiring talent in Mexico must follow these rules even if they have no physical presence in the country, and correct handling of vacation bonus is one of the most common compliance gaps for global teams.

• Applies to all work arrangements
  Remote and hybrid employees have the same vacation rights as on-site staff. Location does not change the obligation to pay the 25 percent bonus.
  
  

• Foreign employers must comply
  Any company employing staff in Mexico must follow local labor law, including Articles 76, 78, and 80 on vacation and bonus requirements. This rule applies whether the employer is in the United States, Europe, Asia, or elsewhere.
  
  

• Risk of contractor misclassification
  Global companies sometimes treat Mexican employees as “contractors” to avoid benefits. This is illegal when the worker is subordinate, and the company may owe retroactive vacation bonus, benefits, and severance.
  
  

• Why global platforms miscalculate
  Many global payroll tools lack real Mexican expertise, leading to wrong salary bases, skipped bonus payments, or delayed calculations for remote teams.
  
  

Following the correct rules ensures remote employees receive their legal benefits and keeps foreign companies compliant in Mexico.

How HRM Ensures Accurate Vacation Bonus Compliance

Human Resources Mexico (HRM) ensures full compliance with vacation bonus laws by operating as a true, REPSE-registered Employer of Record with more than 16 years of physical presence in Mexico.

Our local HR, payroll, and legal teams manage every part of the process, from calculating vacation entitlement to applying Article 80’s 25 percent bonus.

Because we operate only in Mexico, our systems and procedures follow the country’s labor rules precisely.

• REPSE-registered with 16+ years in Mexico
  HRM is a real Mexican employer, not a shell entity or outsourced partner. Our long-term presence ensures the correct interpretation and application of local labor obligations.
  
  

• Local HR team manages Article 80 compliance
  Our in-house Mexican specialists calculate daily salary, apply the 25 percent bonus, and ensure payment is made at the correct time.
  
  

• Accurate SBC calculations and IMSS registration
  HRM manages the proper salary base for contributions, social security registration, and vacation tracking to prevent payroll inconsistencies.
  
  

• Prevents misclassification and global EOR payroll errors
  We avoid the common mistakes foreign platforms make, such as misusing contractor models or miscalculating vacation pay.
  
  

• Correct payouts in onboarding, termination, and annual liabilities
  HRM handles bonus calculations during hiring, yearly accruals, resignation, and termination to ensure every settlement is legally correct.
  
  

To hire confidently and stay compliant in Mexico, contact HRM today and get a custom proposal tailored to your needs.

FAQs About Vacation Bonus in Mexico

Is vacation bonus mandatory in Mexico?

Yes. Vacation bonus is a mandatory legal benefit under Article 80 of the Federal Labor Law. Every employee who completes at least one year of service must receive it when they take a vacation or when unused days are paid at termination. Employers cannot waive, reduce, or replace this benefit.

What is the minimum percentage?

The law requires a minimum vacation bonus of 25 percent of the employee’s regular daily salary for each vacation day taken. Employers may offer more than 25 percent, but they cannot offer less. The 25 percent minimum applies across all industries, job roles, and contract types in Mexico.

Do remote workers in Mexico get a vacation bonus?

Yes. Remote workers must receive the same vacation rights as on-site employees. Mexican labor law applies based on where the employee performs the work, not where the employer is located. This means remote, hybrid, and home-office employees in Mexico all receive vacation days plus the 25 percent bonus.

How do you calculate vacation bonus?

You calculate vacation bonus using the formula: Daily salary × vacation days × 25 percent. Daily salary is the employee’s regular pay divided by 30 days. Variable income may be included when consistent. The bonus is paid when the employee takes a vacation or is included in the final settlement when required.

Is vacation bonus taxable?

Vacation bonus is taxable, but there is an annual exemption equal to 15 UMA. Any amount above that exemption is subject to income tax. Most vacation bonus payments are partially taxable. It does not normally integrate into the IMSS contribution base unless paid regularly or beyond allowable limits.

Do contractors receive a vacation bonus?

No. Independent contractors do not receive a vacation bonus because they are not legally classified as employees. Only employees under an employment relationship receive statutory benefits. If a contractor is misclassified and treated like an employee, the company may owe retroactive vacation days, vacation bonus, and other labor benefits.

How is the vacation bonus paid during termination?

At termination or resignation, any unused vacation days must be paid in the employee’s final settlement (finiquito) along with the 25 percent bonus. The employer must calculate the proportional vacation days earned up to the last working day and pay both the vacation amount and the bonus in cash.

Can employers offer more than 25 percent?

Yes. Employers may voluntarily offer a higher vacation bonus as part of their compensation strategy. Some companies choose 30 percent or higher to stay competitive. However, they can never offer less than the legal minimum of 25 percent. Any internal policy must still comply with Mexican labor law requirements.