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Severance pay calculator for dismissal in Mexico (2026)
Enter your salary, your years of service and your exit dates to see the indemnity, the optional 20 days a year, the capped seniority premium, your finiquito and the ISR withheld.
Reviewed by Radif Partners · Editorial policy
Estimated net severance
MX$105,071
Integrated daily wage: MX$526.71
| Three months’ pay (90 days) | MX$47,404 |
|---|---|
| 20 days per year (3.33 years) | MX$35,066 |
| Seniority premium (12 days a year, capped at 2× minimum wage) | MX$19,973 |
| Finiquito (aguinaldo, vacation, premium, salary) | MX$9,247 |
| Gross severance | MX$111,689 |
| Separation exemption (90 UMA × 3) | MX$31,674 |
| ISR | − MX$6,618 |
| Net severance | MX$105,071 |
- Back pay is not included (up to 12 months if the claim is won, art. 48 LFT). The 20 days per year apply when the employer refuses reinstatement or the worker terminates for the employer’s fault (arts. 49, 50 and 52).
In Mexico, severance after an unjustified dismissal is called the liquidación, and it is owed to foreign and Mexican employees alike under the Federal Labour Law. It adds an indemnity to the finiquito, the final settlement of accrued pay that every departing employee receives. The indemnity has three parts: 3 months of integrated salary (articles 48 and 50 section III), 20 days per year of service when the employer refuses reinstatement or you terminate for its fault (articles 49, 50 section II and 52), and a seniority premium of 12 days a year, calculated on a daily wage capped at 2 minimum wages (articles 162, 485 and 486). The integrated daily wage adds the aguinaldo and vacation premium to your base pay. On MX$60,000 a month with two years and 100 days of service, gross severance is MX$329,654 and net MX$271,827. Up to MX$10,557.90 per year of service is free of ISR (article 93 section XIII), the rest is taxed at your last salary’s rate.
Severance at expatriate salary levels
| Years of service | Monthly salary | Indemnity (3 months + 20 days) | Seniority premium | Tax-exempt part | ISR | Net severance |
|---|---|---|---|---|---|---|
| 1.5 | MX$45,000 | MX$188,907 | MX$11,290 | MX$10,558 | MX$36,336 | MX$191,601 |
| 2.3 | MX$60,000 | MX$285,064 | MX$17,193 | MX$21,116 | MX$57,828 | MX$271,827 |
| 4.1 | MX$90,000 | MX$543,147 | MX$30,865 | MX$42,232 | MX$124,142 | MX$470,829 |
| 6.5 | MX$150,000 | MX$1,166,845 | MX$49,509 | MX$73,905 | MX$336,657 | MX$1,016,682 |
| 3 | MX$250,000 | MX$1,316,781 | MX$22,683 | MX$31,674 | MX$389,848 | MX$980,438 |
The seniority premium barely moves with salary: it is calculated on MX$630.08 a day at most in 2026, so a MX$250,000 executive and a MX$60,000 manager with the same service receive about the same amount. The indemnity, by contrast, follows the full integrated salary with no ceiling, and the tax-exempt allowance is the same for everyone. That is why the effective tax on severance rises so steeply with pay.
Three questions that decide the amount
Was the dismissal without cause? If the employer can prove serious misconduct under the law, no indemnity is due, only the finiquito and the seniority premium. Do you want your job back? Article 48 lets you claim reinstatement instead of the money. Did the employer refuse to reinstate you, or did you resign because the employer cut your pay or stopped paying it? Then the 20 days per year apply. Without them, the same MX$60,000 profile drops to MX$233,961 gross. The toggle in the calculator shows both figures.
Practical points for foreign employees
Settlements are usually signed before the labour conciliation centre or a labour court to be final, and a signed agreement is hard to reopen. Ask for the calculation in writing and compare it line by line with this tool. If your residence card depends on your job, check with an immigration adviser how the end of the employment affects it before your last day. Severance paid by a Mexican employer is reported as income in Mexico, and it may also matter for your annual tax return and for tax at home if you move back.
Resigning is different: the employer then owes only the finiquito. To check the withholding rate on your last salary, use the ISR tax calculator, and for the current value of the UMA, the reference unit behind the tax exemption, see its page.
Frequently asked questions
I am a foreigner and was fired without cause in Mexico. Do I get the same severance as a Mexican employee?
Yes. The Federal Labour Law protects anyone working for an employer in Mexico, whatever their nationality or immigration status. An unjustified dismissal entitles you to 3 months of integrated pay (articles 48 and 50), a seniority premium of 12 days a year (article 162) and your finiquito. On MX$60,000 a month after about two years, that totals MX$233,961 gross before the extra 20 days a year.
My employment contract was signed abroad under foreign law. Does Mexican severance still apply?
If you worked in Mexico for an employer operating there, Mexican labour law generally governs the job, and the minimum rights it sets cannot be signed away in a contract. A foreign-law clause may add benefits but should not reduce the indemnity, the seniority premium or the finiquito below the legal floor. Cross-border situations vary, so have a Mexican labour lawyer review the contract before you accept a settlement.
How much tax comes off a severance package on MX$60,000 a month?
In this example, MX$57,828 of ISR on MX$329,654 gross. The law exempts MX$10,557.90 per year of service (article 93 section XIII of the ISR law), counting a fraction above six months as a full year, so 2 years are exempt here. The rest of the indemnity is taxed at the effective rate of your last monthly salary, 19.56 % (article 96).
Can I choose between getting my job back and taking the money?
Yes, the choice is yours under article 48 of the Federal Labour Law: you may claim reinstatement (reinstalación) or the 3-month indemnity. If you ask to be reinstated and the employer refuses in one of the cases article 49 allows, it must also pay 20 days per year of service (article 50). On MX$60,000 a month and about two years, that adds MX$95,694.
Is back pay for the months my claim takes included in the estimate?
No. Back pay (salarios caídos) runs from the dismissal until the ruling and is owed only if you win the case, capped by article 48 at 12 months of salary. On MX$60,000 a month that ceiling is MX$720,000. Because it depends on the outcome and length of the proceedings, the calculator leaves it out and shows only what is due from the dismissal itself.
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Written by Radif Partners
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Rates 2026, checked on