Mexico Severance and Finiquito Calculator
Plants moving production to Mexico need to understand the cost of ending employment as well as the cost of hiring. This calculator separates the finiquito, owed on any separation, from the extra items that apply when a dismissal is unjustified.
Your numbers
Use the daily integrated salary (salario diario integrado) if your counsel says so; this tool applies one figure to all items.
Current general minimum wage; verify the figure for the year and zone. Used to cap the seniority premium.
Statutory minimum is 15 days; contracts often give more.
Statutory minimum is 25 percent of vacation pay.
Your results
This is a simplified estimate, not legal advice. Accrued wages, the base salary definition, unpaid bonuses, profit sharing (PTU), payroll taxes, collective agreements and court-awarded back pay can change the result. Confirm with Mexican employment counsel before any separation.
Dismissal total vs years of service
Sweeps Years of service from 1 to 30, holding your other inputs fixed.
Price a plant transition from your own data
We can discuss a read-only report that pulls headcount, tenure and wage bands from your systems for scenario work.
Optional. The tool and every export work without this. No spam.
How the calculation works
The finiquito covers proportional aguinaldo (at least 15 days per year, pro rated by days worked in the year) and unused vacation plus the vacation premium of at least 25 percent. On an unjustified dismissal the employer also owes the constitutional indemnity of three months of wages, 20 days of wages for each year of service in many cases, and the seniority premium of 12 days per year of service, where the daily wage used for the premium is capped at twice the minimum wage. The tool applies those rules with one wage figure.
Reading the result
Compare the dismissal total to the resignation total. With five to six years of service the difference is usually several multiples of the finiquito, which is why exit costs belong in any nearshoring business case. The chart shows how both lines grow with tenure. Resignation includes the seniority premium only from 15 years, which creates the visible step in that line.
- Use the integrated daily salary when counsel confirms it applies
- Add accrued wages and any unpaid bonus separately
- Add PTU and payroll tax effects in your own model
- Run the case at the actual wage and at a higher scenario
Common mistakes
Planners often forget that a settlement signed before a labor authority or notary has different evidentiary value than a signed receipt alone. They also forget the seniority wage cap or apply it to the indemnity, where it does not apply. Another mistake is treating all separations as one scenario: reduction of staff, mutual agreement, resignation and justified termination follow different rules. Use this tool for budgeting a range, and let counsel set the actual figures.
Frequently Asked Questions
What is the difference between finiquito and liquidacion?
A finiquito is the settlement of amounts already earned, such as proportional aguinaldo, vacation and its premium, and unpaid wages. A liquidacion in the dismissal sense adds the indemnity items, such as three months and 20 days per year. Many people use the words loosely, so define terms in writing.
Why is the seniority premium capped?
The Federal Labor Law limits the daily wage used to compute the seniority premium to twice the general minimum wage. The indemnity itself is not subject to that cap. Check the current minimum wage for the year before relying on the number.
Does this include PTU or payroll taxes?
No. Profit sharing, social security contributions, INFONAVIT and state payroll taxes are outside this simplified estimate, as are accrued wages and bonuses. Add them from your payroll system when building a full cost model.
Can I rely on this for a real termination?
No. Use it for budgeting and scenario comparison only. Employment outcomes depend on the facts, the contract, collective agreements and local labor authority practice, so a Mexican employment lawyer should confirm the actual amounts.
If you want headcount, tenure and salary bands pulled from your ERP or HR system to price a plant transition scenario, we can discuss a read-only report for it.
Related Tools
Mexico CFDI 4.0 Invoice XML Skeleton Generator
Fill in a few fields and get a CFDI 4.0 ingreso XML skeleton to test your ERP mapping or a PAC sandbox request.
ERP Migration & SelectionNearshoring ERP and Trade Compliance Readiness Assessment
Score how ready your ERP, master data and compliance processes are for running a plant or supplier base in Mexico or Latin America.
Country & TaxLatin America E-Invoicing and Tax ID Reference
One table of tax ID names, formats, e-invoice document names, authorities and VAT names for the main Latin American manufacturing markets.
Developer ToolsIMMEX Temporary Import Balance Aging SQL Generator
Build a SQL query that shows open temporary-import quantities by pedimento line, days to deadline and overdue status, from your own staging tables.
More Safety & Workforce tools
See all- Overall Labor Effectiveness (OLE) Calculator
- Hazard Identification and Risk Ranking Worksheet
- Forklift Pre-Shift Inspection Checklist Template
- Forklift Pre-Shift Inspection Checklist
- LOTO Lockout Tagout Periodic Inspection Checklist
- Welder Qualification Record Worksheet (WPQ Tracker)
- Welder Continuity Log Worksheet
- Welding Hot Work Safety Checklist
- Shift Schedule Template (2-2-3 and 4 On 4 Off)