If you’re planning to work in Mexico, it’s essential to understand the country’s labor laws and regulations. One important aspect that employees should be aware of is the vacation bonus, commonly known as ‘Aguinaldo.’ In this article, we’ll discuss what vacation bonus is and how it works in Mexico.
What Is Vacation Bonus?
Vacation bonus or Aguinaldo is a mandatory payment from employers to their employees in Mexico. It’s an annual bonus that employers are required to pay before December 20th of each year. The amount of the bonus is calculated based on the employee’s salary and the number of days they’ve worked during the year.
Who Is Eligible for Vacation Bonus?
All employees who work for a Mexican employer are eligible for vacation bonus regardless of their position, job type, or contract agreement. Even if you work part-time or have a temporary contract, you’re still entitled to receive your annual vacation bonus.
How Is Vacation Bonus Calculated?
The calculation of vacation bonus depends on your daily salary and number of days you’ve worked during the year. The law mandates that companies pay at least 15 days’ worth of salary as a vacation bonus.
Here’s an example: If your daily salary is $50, and you’ve worked for 200 days during the year, your vacation bonus would be calculated as follows:
$50 x 200 days = $10,000
$10,000 ÷ 365 = $27.39 per day
$27.39 x 15 days = $410.85 total vacation bonus
When Is Vacation Bonus Paid?
Employers are required to pay their employees’ vacation bonuses before December 20th each year. However, some companies may choose to split the payment into two installments instead of paying it all at once. In this case, the first installment must be paid before June 30th, and the second installment before December 20th.
Is Vacation Bonus Taxable?
Yes, vacation bonus is considered taxable income in Mexico. However, it’s subject to a lower tax rate than regular income. The amount of tax you’ll pay on your vacation bonus depends on your total annual income.
Conclusion
In summary, vacation bonus is an annual payment that employers must make to their employees in Mexico. It’s calculated based on the employee’s daily salary and number of days worked during the year.
All employees are eligible for vacation bonus regardless of their job type or contract agreement. Employers are required to pay the bonus before December 20th each year, and it’s subject to a lower tax rate than regular income.