Updated for FY 2026
Mexico Severance Pay Calculator 2026
Estimate severance pay (liquidación) and settlement pay (finiquito) for employees in Mexico with the official Human Resources Mexico (HRM) calculator.
What Is Severance Pay?
Understanding the difference between liquidación and finiquito under Mexican labor law.
In Mexico, when an employment relationship ends, the employer is legally required to pay the departing employee a settlement. The amount and components depend on whether the employee resigned voluntarily or was terminated
There are two distinct concepts every employer must understand:
Finiquito (Settlement Pay): Applies to all separations, including voluntary resignations. It includes accrued but unpaid salary, prorated Christmas bonus (aguinaldo), unused vacation days, and the corresponding vacation bonus (prima vacacional).
Liquidación (Severance Pay): Applies only when the employer terminates the employee without justified cause (despido injustificado). It includes everything in the finiquito, plus three months’ salary (indemnización constitucional) and the seniority bonus (prima de antigüedad). Additionally, if a labor court orders reinstatement and the employer refuses, 20 days of salary per year worked may also apply.
Getting this calculation wrong can lead to labor claims, costly lawsuits before the CFCRL (Centro Federal de Conciliación y Registro Laboral), and penalties. Using the correct formula based on the type of separation is critical for compliance.
Cuando una relación laboral termina en México, el patrón está obligado por ley a pagar al trabajador una liquidación o finiquito, según el tipo de separación. El finiquito aplica en todos loscasos, incluyendo la renuncia voluntaria, y cubre salarios devengados, aguinaldo proporcional, vacaciones no disfrutadas y prima vacacional. La liquidación aplica cuando el despido es injustificado e incluye, además del finiquito, tres meses de salario como indemnización constitucional y la prima de antigüedad. Adicionalmente, si un tribunal laboral ordena la reinstalación y el patrón se niega, pueden aplicar 20 días de salario por año trabajado. Calcular correctamente estos montos es esencial para evitar demandas laborales ante el CFCRL.
How it works
Four simple steps to estimate severance or settlement pay.
Select Separation Type
Choose whether the employee resigned voluntarily (finiquito) or was terminated without cause (liquidación).
1
Enter Salary
& Dates
Input the employee’s daily or monthly salary, start date, and separation date.
2
Add Compensation Details
Include any additional benefits such as vacation days owed, Christmas bonus days, or other
taxable compensation.
3
View Result
Instantly see the full breakdown: settlement components, severance components (if applicable),
and total estimated payout.
4
Disclaimer: Illustrative purposes only. Actual amounts may vary based on salary structure, accrued days, and specific employment conditions.
Settlement Pay Breakdown (Finiquito)
FY 2026
Concept
Amount
Monthly Salary
$25,000.00 MXN
Daily Salary (SD)
$833.33 MXN
Years of Service
2.5014
Days Worked This Year
74
Fixed Fee
$1,856.84
Prorated Benefits
Pending Wages
$12,500.00 MXN
Pro-rated Christmas Bonus
$2,500.00 MXN
Pro-rated Vacation Pay (16 days × $833.33)
$13,333.33 MXN
Vacation Bonus (25%)
$3,333.33 MXN
TOTAL GROSS AMOUNT TO PAY
$31,666.67 MXN
Disclaimer: Illustrative purposes only. Actual amounts may vary based on salary structure, accrued days, and specific employment conditions.
Severance Pay Breakdown (Liquidación)
FY 2026
Concept
Amount
Monthly Salary
$25,000.00 MXN
Daily Salary (SD)
$833.33 MXN
Integrated Daily Salary (SDI)
$876.58 MXN
Integration Factor
1.0519
Years of Service
2.5014
Days Worked This Year
74
Severance Indemnification
90-Day Severance (90 × SDI $876.58)
$78,892.20 MXN
Seniority Bonus (12 days/yr × 2.50 × 2MGS)
$26,469.83 MXN
Pro-rated Vacation Pay (16 days × $833.33)
$13,333.33 MXN
Vacation Bonus (25%)
$3,333.33 MXN
Prorated Benefits
Pending Wages
$12,500.00 MXN
Pro-rated Christmas Bonus
$2,500.00 MXN
Pro-rated Vacation Pay (16 days × $833.33)
$13,333.33 MXN
Vacation Bonus (25%)
$3,333.33 MXN
TOTAL GROSS AMOUNT TO PAY
$137,028.69 MXN
Important: The 90-day constitutional severance is calculated using the Integrated Daily Salary (SDI), not the ordinary daily salary. Under Article 84 of the Federal Labor Law, the SDI includes all payments made to the employee for their work, such as food vouchers, recurring commissions, bonuses, and the proportional value of vacation and Christmas bonus.
Try Severance & Final Settlement Calculator
Key Facts
Essential information every employer should know about severance pay in Mexico.
Important Details
All employees are entitled to a finiquito (settlement) when the employment relationshipends, regardless of the reason.
Severance pay (liquidación) is only required when the employer terminates the employee without justified cause.
The constitutional severance is 3 months of salary, and is mandatory in unjustified dismissals.
The seniority indemnity (20 days of salary per year of service) applies by law only when a labor court orders reinstatement and the employer refuses to reinstate the employee. However, some employers may include it as part of the negotiation in complex or sensitive termination cases.
The seniority bonus (prima de antigüedad) is calculated at 12 days of salary per year of service, capped at twice the current minimum wage. It applies to employees with 15+ years of service in voluntary resignations, and to all employees in terminations.
Datos Clave
Español
Todo trabajador tiene derecho a un finiquito al terminar la relación laboral, sin importar la causa.
La liquidación solo aplica cuando el patrón despide al trabajador sin causa justificada.
La indemnización constitucional equivale a 3 meses de salario y es obligatoria en despidos injustificados.
La indemnización de 20 días de salario por año trabajado aplica por ley únicamente cuando un tribunal laboral ordena la reinstalación y el patrón se niega a reinstalar al trabajador. Sin embargo, algunos empleadores pueden incluirla como parte de la negociación en casos de terminación complejos o delicados.
La prima de antigüedad se calcula a 12 días de salario por año de servicio, con un tope equivalente al doble del salario mínimo vigente. Aplica a trabajadores con más de 15 años de servicio en renuncias voluntarias, y a todos los trabajadores en caso de terminación.
FAQs
How accurate is the Severance Pay Calculator?
Our Severance Pay Calculator uses the formulas established by Mexico’s Federal Labor Law (Ley Federal del Trabajo), including the rules for constitutional severance, seniority indemnity, seniority bonus, and prorated benefits. It provides a reliable estimate based on the information you enter. However, actual severance amounts may vary depending on the specific conditions agreed in each employment contract, superior contractual benefits, or the particular circumstances of the termination. This tool is intended for planning, budgeting, and informational purposes.
What is the difference between finiquito and liquidación?
A finiquito (settlement) is the minimum payment owed to every departing employee, regardless of whether they resigned or were terminated. It includes prorated salary, unused vacation days plus vacation bonus, and prorated Christmas bonus. A liquidación (severance) applies only when the employer terminates the employee without justified cause. It includes everything in the finiquito, plus 3 months’ salary as constitutional severance and the seniority bonus. Additionally, if a labor court orders reinstatement and the employer refuses, 20 days of salary per year of service may also apply. Some employers may include this component as part of a negotiated settlement in complex termination cases.
What information do I need to calculate severance correctly?
To get an accurate estimate, enter: the type of separation (resignation or unjustified termination), daily or monthly salary, employment start date and separation date, vacation days owed or available, and Christmas bonus days per year. For a more precise result, you can optionally include any outstanding salary from the last pay period or pending compensation owed before the separation date.
Does the calculator include taxes or payroll withholdings?
No. This calculator estimates gross severance or settlement pay before taxes. It does not include ISR withholding on the severance payment, IMSS or INFONAVIT adjustments, or employer-side payroll taxes. The tax treatment of severance pay in Mexico follows specific rules (some components are partially or fully exempt from ISR). For exact net amounts, payroll processing must apply the corresponding tax tables.
What is the Integrated Daily Salary (SDI) and why does it matter for severance?
The Integrated Daily Salary (Salario Diario Integrado, or SDI) is the salary figure used to calculate the 90-day constitutional severance and the seniority bonus. Under Article 84 of the Federal Labor Law, the SDI integrates all payments made to the employee for their work, including the base salary plus the proportional value of Christmas bonus, vacation days, and vacation bonus. It may also include food vouchers, recurring commissions, regular bonuses, and any other habitual compensation. The calculator automatically computes the SDI by applying an integration factor to the daily salary. For example, an employee earning $833.33 MXN daily with 15 days of Christmas bonus and 25% vacation bonus will have an integration factor of approximately 1.0493, resulting in an SDI of $874.43 MXN. This is the rate used for the 90-day severance calculation, not the ordinary daily salary.
Can I use this calculator for budgeting and compliance planning?
Yes. The calculator is designed to help companies estimate termination costs, plan labor budgets, and assess financial exposure when considering employee separations. It is especially useful for foreign companies hiring through an EOR in Mexico who need to understand potential liabilities before making employment decisions.
Why might my payroll provider show a different severance amount?
Differences typically occur due to: superior contractual conditions beyond the legal minimum (e.g., more Christmas bonus days or higher vacation bonus percentage), specific terms agreed in individual employment contracts, differences in how prorated days are calculated (calendar year vs. anniversary year), inclusion of variable pay components like commissions or bonuses in the integrated salary, or ISR exemptions applied to certain severance components.
