Understand Your Severance Rights in Mexico
Mexican federal labor law (Ley Federal del Trabajo) guarantees substantial severance protections. Learn what you are owed and how to negotiate fairly.
Finiquito vs Liquidación: What You Receive
Finiquito (Settlement) — Owed in ALL Separations
Accrued Salary
Wages earned for days actually worked in the current pay period, up to the separation date. Calculated pro-rata if separation occurs mid-period.
Proportional Aguinaldo (Christmas Bonus)
Minimum 15 days of salary per year of service, typically paid at year-end but owed proportionally upon separation. Must be calculated based on 365 days worked.
Proportional Vacation Days
Year 1: 12 days. Year 2: 14 days. Year 3: 16 days. Year 4: 18 days. Year 5: 20 days. Years 6-10: 22 days. Years 11-15: 24 days. Years 16-20: 26 days. Increases by 2 days every 5 years after year 5.
Vacation Premium (Prima Vacacional)
25% bonus on the value of accrued vacation days. Calculated on the total vacation pay owed, not prorated separately for each day.
Seniority Premium (Prima de Antigüedad) — Voluntary Resignation
12 days of salary per year of service, capped at 2× the daily UMA (minimum wage equivalent). Only owed if employee voluntarily resigns after 15+ years of service.
Liquidación (Additional Severance) — Unjustified Dismissal ONLY
Constitutional Indemnification (3 Months Salary)
Article 123 of the Mexican Constitution mandates 3 months of integrated daily salary for unjustified dismissal. This is non-waivable and constitutes the floor for any dismissal settlement.
Seniority Indemnification (20 Days per Year)
20 days of integrated salary for each year of service (Article 50 of LFT). Applies to unjustified dismissal without the 15-year minimum required in voluntary resignation cases.
Seniority Premium (Prima de Antigüedad) — Dismissal
12 days of salary per year of service, with no 15-year minimum. Always owed in dismissal cases (unlike voluntary resignation). No cap applies in dismissal context.
Plus All Finiquito Components
In addition to the liquidación components above, all finiquito items must also be paid: accrued salary, proportional aguinaldo, proportional vacation, vacation premium, and seniority premium (where applicable).
If you are dismissed without just cause (unjustified dismissal), you receive BOTH finiquito AND liquidación.
Vacation Days by Year of Service
These are the minimum vacation days you are entitled to based on your tenure:
| Year of Service | Vacation Days |
|---|---|
| Year 1 | 12 |
| Year 2 | 14 |
| Year 3 | 16 |
| Year 4 | 18 |
| Year 5 | 20 |
| Years 6-10 | 22 |
| Years 11-15 | 24 |
| Years 16-20 | 26 |
| Years 21-25 | 28 |
| Years 26+ | 30 |
Interactive Severance Estimator
Enter your information to estimate your finiquito and/or liquidación:
Your Key Rights in Mexico
Here are your most important severance and labor protections:
3 Months Severance is Mandatory
The Constitutional indemnification of 3 months salary cannot be waived, reduced, or negotiated away. This is your legal floor regardless of circumstances. Accepting less is accepting a rights violation.
Gig & Platform Workers Now Have Full Labor Rights
As of December 2024, Uber, Rappi, DiDi, and other platform workers have full federal labor rights including severance, vacation, bonuses, and social security (IMSS). This applies retroactively to workers already employed.
Written Notice of Dismissal is Legally Required
Employers must provide written notice of dismissal and the grounds (just cause). Without written notice, the dismissal is automatically considered unjustified, triggering full liquidación. Verbal termination is insufficient.
Profit Sharing (PTU) is a Guaranteed Right
Workers are entitled to 10% of company profits, distributed in May each year. If dismissed before May, you are still owed your proportional share of profits earned while employed. This cannot be waived.
Statute of Limitations: 1 Year to File a Claim
You have 1 year from the date of dismissal to file a claim at the Conciliation & Arbitration Board (Junta de Conciliación y Arbitraje). After 1 year, your claim is barred. Act quickly if you believe your rights were violated.
Social Security (IMSS) Registration is Your Right
Your employer must register you with IMSS from day one of employment. If not registered, you are still entitled to all severance and labor protections. Being paid "sin contrato" (under the table) does not strip your rights.
Red Flags in Your Separation Agreement
Watch out for these tricks that employers use to reduce your severance:
Employer asks you to sign a resignation letter (renuncia) to avoid paying full liquidación.
A "finiquito" document that includes language waiving your right to future claims or accepting an unjustified dismissal.
Employer claims dismissal was justified for "just cause" but never provided written notice or grounds in writing.
Being paid entirely "sin contrato" (under the table) — your rights are NOT diminished, and you can still claim severance.
Employer refuses to confirm IMSS registration or claims you were never officially employed — you still have legal protections.
Being asked to return equipment, uniforms, or tools before receiving your severance payment — demand payment first.
Frequently Asked Questions
What is the difference between finiquito and liquidación?▼
Finiquito is the settlement owed in ANY separation (resignation, retirement, dismissal). It includes accrued salary, proportional bonuses, vacation pay, and related components. Liquidación is ADDITIONAL money owed only in cases of unjustified dismissal, including 3 months of salary plus 20 days per year of service. If you are dismissed without just cause, you receive both finiquito AND liquidación.
Can my employer make me sign a waiver of my severance rights?▼
No. The Constitutional indemnification of 3 months salary is non-waivable (inrenunciable). Any document asking you to waive this right is void. However, employers often pressure workers to accept less through threats, false information, or by delaying payment. If you are offered less than 3 months, request it in writing and consult an attorney. You cannot legally waive minimum labor rights.
I was paid "sin contrato" (under the table). Do I still have severance rights?▼
Yes. Being paid under the table does NOT strip you of labor rights. You can still file a claim at the Conciliation & Arbitration Board (Junta de Conciliación y Arbitraje) and prove employment through other evidence: witness testimony, bank statements showing consistent payments, WhatsApp messages with your boss, photographs of your workspace, or pay stubs. The burden shifts to your employer to prove they did not employ you.
How long do I have to file a severance claim after dismissal?▼
You have 1 year from the date of dismissal to file a claim at the Conciliation & Arbitration Board (Junta de Conciliación y Arbitraje). After 1 year, your claim is barred by statute of limitations (prescripción). Act quickly. Many boards offer free or low-cost filing. You do not need an attorney, though one is helpful.
What does "integrated daily salary" (salario integrado) mean for calculation purposes?▼
Integrated daily salary includes your base wage plus all regular supplements and benefits that are paid consistently (bonuses, commissions, housing allowance, transportation allowance, etc.). It does NOT include one-time bonuses, extraordinary payments, or reimbursements. Courts use integrated salary to calculate indemnization because it reflects your true economic earning. Always ask your employer or the labor board to confirm your integrated salary figure.
What should I do if my employer refuses to pay severance or pressure me to settle for less?▼
First, request the severance in writing (email or formal letter). Keep copies of all communications. If your employer does not pay within 5 days, file a claim at the Conciliation & Arbitration Board (Junta de Conciliación y Arbitraje) in your state. The filing is usually free or very low cost. The board will attempt to mediate; if mediation fails, you go to arbitration. Many workers win their cases. Do not accept less than the legal minimum, and do not sign anything without understanding it fully.
Analyze Your Mexico Severance
Get a free, confidential review of your separation agreement to ensure you receive everything you are owed.
Disclaimer: SeveranceIQ is an educational tool only and not a law firm. The information provided is general in nature and does not constitute legal advice. For matters specific to your situation, consult a qualified Mexican labor attorney (abogado laboralista). Laws change; this content reflects information as of 2026.