Key legal factors that determine your final settlement amount
Learn the legal foundations that directly affect the calculation.
Read more →Severance Pay Calculator
Calculate your final settlement according to Mexico’s Federal Labor Law.
Complete Guide to Final Settlement in Mexico
Everything you need to understand and correctly estimate your employment final settlement.
Difference Between Final Settlement and Severance Compensation
In Mexico, it is important to distinguish between these two concepts:
Final Settlement
This payment covers pending amounts at the end of the employment relationship, such as unpaid wages, unused vacation days, and proportional Christmas bonus.
Severance Compensation
This includes the final settlement plus additional payments for unjustified dismissal, such as constitutional compensation and seniority premium.
Key concepts for the calculation
To correctly estimate your final settlement, consider these elements:
Daily salary
If you receive a monthly salary, divide it by 30 to get your daily salary.
Unpaid worked days
Days worked from your last payment date until the employment termination date.
Pending vacation pay
Vacation days you are entitled to but have not used.
Proportional Christmas bonus
The proportional part of the annual Christmas bonus based on days worked.
Vacation premium
An additional percentage paid on unused vacation days.
Other benefits
Bonuses, commissions, or other pending benefits according to the employment contract.
Final settlement calculation example
- Monthly salary$15,000.00
- Unpaid worked days12 days
- Pending vacation pay8 days
- Proportional Christmas bonus$8,750.00
Total final settlement
$19,750.00
Final settlement + severance compensation example
- Basic final settlement$12,000.00
- Seniority premium$4,800.00
- 3-month compensation$54,000.00
- 20 days per year$48,000.00
Total final settlement + severance compensation
$118,800.00
Important considerations
- The final settlement may be subject to income tax withholding according to current tax regulations.
- Employee debts to the company, such as loans or advances, may be deducted.
- The seniority premium may apply depending on the reason for termination and length of service.
- It is recommended to review the employment contract, internal policies, and collective agreement.
Labor Finance Blog
Articles and resources to better understand your labor rights.
Differences between final settlement and severance compensation
Both concepts have different legal and financial implications.
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