Mandatory Employee Benefits in Mexico
Mexico's Federal Labour Law (Ley Federal del Trabajo) sets a generous statutory floor that every employer must meet before adding discretionary perks. The core mandatory benefits are the aguinaldo (Christmas bonus), paid vacation with a vacation premium, profit sharing (PTU), and enrolment in the state social security, housing, and retirement funds—IMSS, INFONAVIT, and SAR. Together, these statutory costs typically add around 30%–40% on top of base salary.
Aguinaldo (Christmas bonus)
At least 15 days' wages, paid by 20 December
Paid vacation
12 days after year 1, rising to 20+ with tenure
Vacation premium
At least 25% of pay for vacation days
Profit sharing (PTU)
10% of taxable profit, shared by 30 May
Social security (IMSS)
Employer + employee contributions on the SBC
Housing fund (INFONAVIT)
Employer contributes 5% of the integrated wage
Retirement (SAR / Retiro)
Employer base contribution of 2% of the wage
Mandatory benefit
Statutory minimum
Aguinaldo (Christmas bonus)
At least 15 days' wages, paid by 20 December
Paid vacation
12 days after year 1, rising to 20+ with tenure
Vacation premium
At least 25% of pay for vacation days
Profit sharing (PTU)
10% of taxable profit, shared by 30 May
Social security (IMSS)
Employer + employee contributions on the SBC
Housing fund (INFONAVIT)
Employer contributes 5% of the integrated wage
Retirement (SAR / Retiro)
Employer base contribution of 2% of the wage
Social Security & Statutory Funds
Every formal employee must be registered with three federal institutions. The Mexican Social Security Institute (IMSS) funds healthcare, maternity, disability, work-risk, and old-age benefits; INFONAVIT funds subsidised home loans; and the SAR (Retirement Savings System) funds individual retirement accounts. Contributions are calculated on the employee's integrated daily wage (Salario Base de Cotización, or SBC), which bundles base pay with the aguinaldo, vacation premium, and other regular benefits.
IMSS (social security)
Mostly employer, with a smaller employee share
Medical care, maternity, sickness, disability, work-risk, and pension coverage
INFONAVIT (housing)
Employer only (5%)
Subsidised mortgages and a housing sub-account for the employee
SAR / Retiro (retirement)
Employer base 2% (rising under pension reform)
Individual retirement account managed by an AFORE
Fund
IMSS (social security)
Who pays
Mostly employer, with a smaller employee share
What it provides
Medical care, maternity, sickness, disability, work-risk, and pension coverage
Fund
INFONAVIT (housing)
Who pays
Employer only (5%)
What it provides
Subsidised mortgages and a housing sub-account for the employee
Fund
SAR / Retiro (retirement)
Who pays
Employer base 2% (rising under pension reform)
What it provides
Individual retirement account managed by an AFORE
State Payroll Tax (ISN)
Separately from the federal funds, each state levies a payroll tax (Impuesto Sobre Nóminas, ISN) paid entirely by the employer. Rates vary by state, typically in the range of about 1%–4% of payroll (commonly around 3% in Mexico City). This tax should be factored into the total cost of employment.
Aguinaldo & Bonuses
The aguinaldo is Mexico's statutory year-end bonus and is not discretionary. Employers must pay at least 15 days' wages by 20 December each year. Employees who have worked less than a full year are entitled to a proportional amount based on the days worked.
Enhanced & Performance Bonuses
Many employers—especially multinationals and technology firms—pay an aguinaldo above the 15-day minimum, commonly 20–30 days, as a competitive differentiator. Discretionary performance or year-end bonuses tied to individual KPIs or company results are also widely used to reward and retain high performers. Because anything above the statutory 15 days is contractual, the terms should be documented clearly in the employment contract or company policy.
Paid Vacation & Vacation Premium
Since the "Vacaciones Dignas" reform took effect on 1 January 2023, employees are entitled to 12 paid vacation days after their first year of service—double the previous minimum of six. Entitlement rises by two days each year until it reaches 20 days at year five, then by two days for every additional five years of service. On top of their normal pay for these days, employees must receive a vacation premium of at least 25% of the wages corresponding to the vacation period.
6–10 years
22 days (+2 every 5 years)
Years of service
Minimum vacation days
1 year
12 days
2 years
14 days
3 years
16 days
4 years
18 days
5 years
20 days
6–10 years
22 days (+2 every 5 years)
Profit Sharing (PTU)
Mexico requires employers to share 10% of their annual taxable profit with eligible employees through PTU (Participación de los Trabajadores en las Utilidades). Payment is due within 60 days of filing the annual tax return—by 30 May for most companies. Employees generally qualify after 60 days of service, and half of the pool is split by days worked while the other half is split by wages earned.

A 2021 outsourcing reform introduced a cap on each employee's PTU: the payout is limited to the higher of three months' salary or the average PTU received over the previous three years. Newly formed companies are generally exempt from PTU in their first year of operation.
Supplementary Benefits & Allowances
Beyond the statutory minimum, employers commonly enhance packages with the following non-mandatory benefits to stay competitive in the Mexican market, particularly for professional and bilingual talent.
Food Vouchers (Vales de Despensa)
Grocery or meal vouchers—vales de despensa—are one of the most popular perks in Mexico. Delivered on a prepaid card, they are tax-advantaged for both employer and employee up to a legal limit tied to the UMA (the official unit of measure), making them an efficient way to boost take-home value.
Private Major-Medical Insurance (SGMM)
Because IMSS care is delivered through the public system, most mid-sized and larger employers add private major-medical insurance (Seguro de Gastos Médicos Mayores) so staff can access private hospitals and specialists. Group life insurance and, for senior roles, dependent cover are frequently bundled in.
Savings Fund (Fondo de Ahorro)
A fondo de ahorro is a highly valued matched-savings scheme in which the employer matches the employee's contribution (commonly up to a percentage of salary) within a tax-favoured legal limit. Balances are typically paid out annually, adding a meaningful boost to total reward.
Meal, Transport & Other Allowances
Cash and in-kind allowances round out many Mexican packages: meal and transport (or fuel) allowances, a mobile or connectivity stipend, and—particularly since remote work grew—home-office and wellness allowances. Additional paid leave above the statutory minimum, learning budgets, and flexible or hybrid working are increasingly used as low-cost, high-value retention tools.
Minimum Wage & Paid Leave Context
The federally set minimum wage and statutory paid time off form the baseline that every compensation package must sit above. Mexico applies two minimum-wage zones—a general national rate and a higher rate for the Northern Border Free Zone—and revises both each year (usually effective 1 January). The key statutory reference points are summarised below (see the Employment Law page for full detail).
Minimum wage – general zone
MXN 315.04 per day (2025: MXN 278.80)
Minimum wage – Northern Border Free Zone
MXN 440.87 per day (2025: MXN 419.88)
Annual (vacation) leave
12 paid days after 1 year, rising with tenure
Maternity leave
12 weeks paid (6 before, 6 after the birth)
Paternity leave
5 paid working days
Public holidays
Statutory obligatory rest days (días de descanso obligatorio)
Item
Statutory minimum (2026)
Minimum wage – general zone
MXN 315.04 per day (2025: MXN 278.80)
Minimum wage – Northern Border Free Zone
MXN 440.87 per day (2025: MXN 419.88)
Annual (vacation) leave
12 paid days after 1 year, rising with tenure
Maternity leave
12 weeks paid (6 before, 6 after the birth)
Paternity leave
5 paid working days
Public holidays
Statutory obligatory rest days (días de descanso obligatorio)
Conclusion
Ensure your compensation and benefits packages in Mexico are competitive, compliant, and aligned with local expectations. With Glints as your partner, you gain regional expertise that keeps your offerings attractive to top talent while adhering to Mexico's social security, aguinaldo, vacation, and profit-sharing rules.
Book a call with our team to explore how we can support your compensation and benefits strategy for a stronger, more compliant workforce in Mexico.
Social Security & Statutory Funds