What Is Seniority Bonus (Prima de Antigüedad) in Mexico?
Learn what the Prima de Antigüedad is, who receives it, how to calculate it, and when employers must pay the seniority bonus under Mexican labor law
What Is the Seniority Bonus (Prima de Antigüedad)?
The Seniority Bonus (Prima de Antigüedad) is a mandatory benefit under Mexico’s Federal Labor Law. It compensates employees for their years of service and provides financial protection when employment ends. This bonus applies in specific situations and uses a special legal formula to keep the benefit fair for long-term employees.
Legal definition
Defined in the LFT as a guaranteed payment equal to 12 days of salary per completed year of service, and calculated using a capped daily salary of up to twice the general minimum wage.Purpose of the seniority bonus
Designed to reward loyalty, recognize long-term service, and protect employees who have spent many years with the same employer.Applies during certain employment events
Paid when an employee is terminated, resigns after 15+ years of service, or retires.Part of Mexico’s employee protection system
Helps employees transition financially after long service periods.
The seniority bonus exists to recognize commitment and to ensure employees receive fair compensation for their years of work. It is a key element of Mexico’s labor protections.
Who Is Entitled to Receive the Seniority Bonus?
The Seniority Bonus (Prima de Antigüedad) is a protected benefit in Mexico, and the Federal Labor Law sets clear rules for who must receive it. Eligibility depends on the type of employment separation and the employee’s total years of service.
The bonus mainly applies during termination, retirement, or long-term voluntary resignation. Employers must understand these rules to calculate the benefit correctly and avoid disputes.
Termination scenarios
Employees who are dismissed with or without cause are entitled to the seniority bonus regardless of their years of service. In cases of unjustified termination, the bonus is paid in addition to constitutional severance.Dismissal cases
Even when termination is legally justified, the seniority bonus still applies. No minimum years of service are required when the employment relationship ends by the employer's decision.Retirement and employee death
Retirement automatically triggers entitlement to the seniority bonus. If an employee dies, the bonus must be paid to their legal beneficiaries, regardless of length of service.Voluntary resignation rule
Employees who resign voluntarily are entitled to the seniority bonus only if they have completed at least 15 years of continuous serviceSpecial cases and exceptions
Some employees may qualify earlier depending on court decisions, protected categories, or specific contract conditions.
These rules ensure long-service employees always receive financial recognition for their years of dedication.
How to Calculate the Seniority Bonus (Step-by-Step)
Mexico uses a clear legal formula to calculate the Seniority Bonus (Prima de Antigüedad). The benefit equals 12 days of salary for each completed year of service, but the daily salary used in the formula is capped at twice the general minimum wage.
Employers must follow each step carefully to avoid errors, especially for long-service or high-salary employees.
Step 1: Calculate years of service
Count the completed years. Fractional years are paid proportionally.Step 2: Identify daily salary
Use the employee’s base daily wage only, not allowances or SDI.Step 3: Apply the salary cap
If the employee earns above MXN $630.08/day, replace their salary with the capped amount. If they earn below it, use the actual salary.Step 4: Apply the formula
12 days × years of service × salary (actual or capped)
Note: MXN $630.08/day reflects two times the General Minimum Wage. For employees working in the Northern Border Zone, the applicable cap is higher and is based on the Northern Border Minimum Wage.
Example Table (Using 2026 Minimum Wage)
Employee Type | Actual Daily Salary | Salary Cap Applied? | Years of Service | Formula Used | Final Bonus |
Lower-salary employee | MXN $300 | No | 10 years | 12 × 10 × 300 | MXN $36,000 |
Higher-salary employee | MXN $1,200 | Yes → use MXN $630.08 | 10 years | 12 × 10 × 630.08 | MXN $75,609.60 |
When Must Employers Pay the Seniority Bonus?
The Seniority Bonus (Prima de Antigüedad) must be paid in several employment-ending situations, and the Federal Labor Law clearly outlines each scenario. Employers must understand exactly when this payment is required, because missing it creates legal disputes, fines, and back-pay obligations.
The bonus becomes part of the employee’s finiquito or liquidación, depending on the type of separation, and must always be calculated using the correct formula and salary cap.
Payment at termination (finiquito)
Whenever an employment relationship ends, the seniority bonus is evaluated and added to the employee’s final settlement if they qualify. It applies regardless of the contract type.Justified vs. unjustified dismissal
In an unjustified dismissal, the seniority bonus is paid in addition to severance. In a justified dismissal, the seniority bonus also applies, regardless of the employee’s years of service.Voluntary resignation with 15+ years
Employees who resign after 15 continuous years must receive the full seniority bonus as part of their final payment.Payment upon death
If the employee dies, the bonus must be paid to their legal beneficiaries, regardless of years completed.Payment in retirement cases
Retirement automatically triggers entitlement to the bonus, even if the employee leaves voluntarily.
These rules ensure long-service employees and their families always receive the financial recognition they are legally owed.
Seniority Bonus vs. Severance Pay (What’s the Difference?)
The Seniority Bonus (Prima de Antigüedad) and severance pay (Indemnización Constitucional) are two different legal payments in Mexico. Many employers confuse them because both can appear during termination, but each one serves a separate purpose and follows a different legal formula.
Understanding the difference is essential to avoid underpayment, disputes, or improper calculations in a final settlement.
Independent from severance
The seniority bonus is not part of severance. It is a separate mandatory benefit created to reward years of service and is calculated using 12 days of salary per year.Applies regardless of termination cause
The seniority bonus applies in both justified and unjustified dismissals, regardless of the employee’s years of service. Severance pay applies only in cases of unjustified termination.When both payments apply together
In an unjustified dismissal, the employee receives severance + seniority bonus + accrued benefits, each calculated independently.Common confusion for employers
Some employers mistakenly combine both amounts or believe the seniority bonus replaces severance. This is incorrect and leads to compliance issues.
Together, these rules ensure employees receive full and fair compensation according to their service length and termination type.
Special Rules for High-Earning Employees (Salary Cap Rules)
Mexico applies a salary cap when calculating the Seniority Bonus to keep the benefit fair and consistent for all employees. Even if an employee earns a high daily salary, the law requires employers to use a maximum value equal to twice the general minimum wage for the calculation.
This prevents extremely large payouts and ensures the bonus remains a standardized protection rather than a high-income benefit.
Employers must always check whether the employee’s daily salary exceeds the cap before applying the formula.
Why the law caps the salary basis
The cap ensures the bonus protects long-term employees fairly without creating disproportionate payments for high earners. It also keeps the benefit aligned with the national wage policy.How the capped salary affects the formula
If an employee’s daily wage is higher than 2 × the general minimum wage, the capped amount must replace their actual salary in the calculation.Example: capped vs. uncapped salary (2026)
Actual daily salary: MXN $1,200 → above cap
Legal cap for 2026: MXN $630.08
Seniority bonus for 10 years: 12 × 10 × 630.08 = MXN $75,609.60
Without the cap, it would be MXN $144,000
These rules ensure high earners receive fair compensation while keeping the bonus within legal limits.
Tax Treatment of the Seniority Bonus
The tax treatment of the Seniority Bonus (Prima de Antigüedad) depends on how much the employee receives and the legal limits set by tax regulations. In many cases, part or all of the bonus is exempt from ISR (income tax), but the exemption is not unlimited.
Employers must understand the correct tax rules to avoid errors in payroll reporting, especially during termination or retirement settlements.
When the bonus is exempt from ISR
The Seniority Bonus is exempt from income tax up to the equivalent of 90 times the General Minimum Wage per year of service, as established under Mexican tax law. This exemption applies whether the bonus is paid due to termination, voluntary resignation after 15 years of service, or retirement.When part becomes taxable
If the seniority bonus amount exceeds the exempt limit, the extra portion becomes subject to ISR. Only the amount above the legal exemption is taxed.How employers report it
Payroll teams must separate the exempt and taxable amounts at the XML level of the payroll CFDI and apply withholding only to the taxable portion.Tax impact for employees
Employees benefit because much of the bonus is tax-free, reducing their overall tax burden during termination or retirement.
Correct tax handling ensures accurate payroll reporting and avoids compliance issues with the SAT.
Documentation and Record-Keeping Required for Compliance
To calculate and pay the Seniority Bonus correctly, employers must maintain complete and accurate employment records. Mexico’s labor authorities often request documentation during audits or disputes, and missing information can place the employer at a disadvantage.
Proper record-keeping protects both the company and the employee, ensuring the bonus is calculated fairly and according to Article 162 of the Federal Labor Law.
Key dates required
Employers must document the employee’s start date, termination date, and total years of continuous service. Fractional years must also be recorded for proportional payment.Payroll data needed
Accurate records of the employee’s daily base salary, salary adjustments, and applicable minimum wage rates are required. These numbers determine whether the salary cap applies.Why accurate records matter
If a dispute arises, the employer must prove the calculation was correct. Missing records usually result in decisions favoring the employee.Common employer mistakes
Not updating salary records, losing start-date documentation, using SDI instead of the employee’s daily base salary or the capped amount equal to two times the applicable General Minimum Wage (2× SMG), and failing to keep proof of payments are frequent errors that lead to compliance problems.
Reliable documentation ensures smooth calculations and protects the employer during inspections or legal reviews.
Legal Risks for Not Paying the Seniority Bonus
Failing to pay the Seniority Bonus (Prima de Antigüedad) is a serious violation of Mexico’s Federal Labor Law. Because this benefit is mandatory under Article 162, employers that skip it or calculate it incorrectly face financial, legal, and reputational consequences.
Disputes over seniority bonus payments are common, especially when records are incomplete or when employers misunderstand the 15-year rule. Proper compliance is essential to avoid long-term liability.
Employer penalties under the LFT
Labor authorities may impose fines for failing to pay a required benefit. Penalties increase when the omission affects multiple employees or is considered intentional.Labor court claims
Employees can file lawsuits demanding payment of the seniority bonus, plus interest and legal costs. Courts usually side with the employee when evidence is missing or unclear.Retroactive claims
If an employer failed to pay the bonus when it became due, employees may claim the unpaid seniority bonus retroactively within the applicable statutory limitation period, potentially creating significant and unexpected liabilities for the employer.Common disputes and causes
Errors often come from using SDI instead of daily salary, ignoring the salary cap, miscounting years of service, or assuming the bonus only applies in an unjustified termination.
Paying the seniority bonus correctly helps employers avoid costly litigation and ensures full compliance with Mexican labor law.
Proposed Reforms to the Seniority Bonus (If Applicable)
Mexico has held ongoing discussions about updating the Seniority Bonus, including a proposal to increase the benefit from 12 days to 15 days of salary per year of service. The goal is to strengthen long-term employee protections and align the bonus with modern labor standards.
Although the proposal has been mentioned in legislative debates, it has not been formally approved as of 2025. Still, employers should stay alert, because any change would directly affect termination costs and long-term financial planning.
Reform proposal
Increase the seniority bonus from 12 days to 15 days per completed year of service.Legislative status
Currently under discussion but not yet enacted.What employers should prepare for
Companies should monitor updates and review budgeting models, as any reform would raise final-payment obligations.
These potential reforms highlight Mexico’s trend toward stronger employee protections.
How an EOR Helps Manage Seniority Bonus Compliance in Mexico
Managing the Seniority Bonus (Prima de Antigüedad) requires precise calculations, correct documentation, and deep knowledge of Article 162 of the Federal Labor Law.
Foreign companies often make mistakes because they are unfamiliar with Mexico’s salary cap, termination rules, and service-year requirements.
An Employer of Record (EOR) becomes the legal employer in Mexico and ensures the bonus is paid correctly in every qualifying scenario. This prevents costly disputes and protects employers from long-term liability.
Accurate years-of-service calculation
The EOR tracks start dates, end dates, and fractional years to ensure the exact service period is used.Correct salary cap application
The EOR applies the legal cap of 2 × the general minimum wage, preventing overpayment or underpayment.Precise formula during termination
The EOR calculates 12 days × years of service × capped or actual daily salary, following Article 162.Included properly in finiquito or severance
The seniority bonus is guaranteed to appear in the employee’s final settlement when legally required.Prevents lawsuits and disputes
Proper calculations eliminate common errors that lead to labor claims or retroactive payments.Full management of records and payroll
The EOR maintains employment files, payroll data, and legally compliant documentation.
With an EOR, companies avoid legal exposure and ensure full, accurate compliance with Mexico’s seniority bonus rules.
Why Foreign Companies Choose HRM for Mexico Compliance
Handling seniority bonus rules, wage caps, termination laws, and record-keeping requirements can be challenging for foreign companies. Mexico’s labor framework is detailed and unforgiving, and even small mistakes lead to disputes, fines, or retroactive payments.
At Human Resources Mexico (HRM), we eliminate this risk by operating as a true, local Employer of Record with more than 16 years of physical operations in Mexico. At HRM, we manage every legal calculation directly and ensure full compliance with the Federal Labor Law.
REPSE-registered, real EOR
HRM is legally authorized to employ workers in Mexico, unlike platform-based services or shell entities that outsource operations.Accurate LFT-based calculations
HRM applies correct formulas for seniority bonus, salary caps, years of service, and SDI-related elements during termination.No outsourcing or intermediaries
All services are handled by HRM’s own team, not hidden partners or contractor networks.Transparent pricing and bilingual HR support
HRM offers clear pricing and a real HR team that supports employees and employers in English and Spanish.Protection from legal exposure
HRM prevents underpayment errors, disputes, and violations related to seniority bonus calculations or final settlements.
HRM offers comprehensive expertise focused solely on Mexico for safe and compliant hiring. Contact us today to receive a custom hiring proposal tailored to your needs.
FAQs About the Seniority Bonus (Prima de Antigüedad)
How many days are paid in the seniority bonus?
The seniority bonus is calculated using 12 days of salary for each completed year of service. Fractional years are paid proportionally. The salary used in the calculation must follow the legal cap of 2 × the general minimum wage, even when the employee earns a higher daily amount.
Does the seniority bonus apply if an employee resigns?
Yes, but only when the employee resigns after 15 or more years of continuous service. In this case, the seniority bonus must be included in the final settlement. Resignations with fewer than 15 years do not trigger payment unless special circumstances apply or a legal decision requires it.
Who receives the bonus if an employee dies?
If an employee dies, the seniority bonus must be paid to their legal beneficiaries, regardless of how many years of service they completed. Beneficiaries are typically determined through legal documents or family rights recognized under Mexican law, and the employer must include the bonus in the final settlement.
How is the seniority bonus calculated for high-earning employees?
For high earners, the law applies a salary cap equal to 2 × the general minimum wage. If the employee’s daily salary exceeds this cap, the calculation must use the capped value. The formula remains 12 days × years of service × capped salary.
Is the seniority bonus taxed in Mexico?
The seniority bonus is partially tax-exempt. Up to the equivalent of 90 times the General Minimum Wage per year of service is exempt from ISR. Any amount above that limit becomes taxable. Employers must report the exempt and taxable portions separately in the CFDI payroll receipt during final settlement.
Is the seniority bonus included in severance?
The seniority bonus is a separate legal benefit, not part of severance. However, both payments may appear together during an unjustified termination. Severance compensates for unlawful dismissal, while the seniority bonus compensates for years of service. Each amount must be calculated and paid independently.
