Two different payments
In Mexico there are two terms that are often confused:
- Finiquito: what you already earned. It is paid when you resign or your contract ends.
- Liquidación: the finiquito plus an indemnity, paid when you are dismissed without just cause.
What the finiquito includes
- Unpaid salary.
- Proportional aguinaldo (year-end bonus, at least 15 days per year).
- Proportional vacation days.
- Vacation premium (at least 25% of vacation pay).
What the liquidación adds
- 3 months (90 days) of integrated salary.
- 20 days of salary per year of service.
- Seniority premium: 12 days per year, capped at two minimum wages.
Worked example
Salary MXN 15,000 per month, started March 15, 2023, ends November 4, 2026. The finiquito is about MXN 13,571.92. If it is a wrongful dismissal, the total liquidación is about MXN 121,269.40.
Deadlines
A wrongful dismissal claim must be filed within 2 months. Other benefits expire after 1 year. In most cases you must first go through the Labor Conciliation Center. PROFEDET gives free legal advice to workers.
Calculate your case
Use the calculator Severance pay calculator
Frequently asked questions
Is severance pay mandatory in Mexico?
The finiquito is always owed. The extra indemnity applies to dismissal without just cause.
Is severance taxed?
Parts are exempt and parts taxable. Ask an accountant.
Do I get severance if I resign?
You get the finiquito, not the indemnity.