Tuesday, March 5, 2024

Everything you need to know about the ‘aguinaldo’ yearly bonus

The Christmas season has arrived, and with it comes the aguinaldo, a yearly bonus that employers in Mexico are legally required to give to their employees. Here is everything you need to know, as an employer or employee.

Who is entitled to the bonus?

All employees, including domestic workers, are entitled to the bonus under the terms of the Federal Labor Law.  

Seasonal or part-time employees are also entitled to a bonus, proportionate to the number of hours they’ve worked.  

People hired as independent contractors are not entitled to the bonus unless there is an employment agreement between the two parties. 

Employees who have quit or been laid off are also entitled to a bonus, proportionate to their employment period.

The aguinaldo is an important bonus at Christmastime, which many Mexicans use to pay for the extra expense of the holiday season. (Roger CE/Unsplash)

How do you calculate the bonus owed?

It must be equivalent to a minimum of 15 days of salary for all employees who have completed a full year of service. 

Those who have not completed a full year of service are entitled to receive a proportionate share of the bonus depending on the number of weeks or months the employee has worked. 

For example, to calculate the bonus of an employee who has worked for six months, these are the steps to follow: 

  1. Divide the net monthly salary by 30 to get your daily pay rate.
  2. Multiply the daily pay rate by the minimum 15 days of salary to get the standard bonus amount.
  3. Divide the standard bonus amount by the total number of days in a year.
  4. Calculate the number of days the employee worked (which in this example is 180 days for six months – (calendar days).
  5. Multiply the number of days the employee worked by the proportional bonus quota to get the final bonus amount.

If the worker’s salary is variable, their income must be based on the daily average obtained over the last 30 calendar days of effective work.

Amounts greater than 30 days of the minimum wage are taxable. (Crisanta Espinosa Aguilar/Cuartoscuro)

When is it due?

The bonus must be distributed by Dec. 20.

Is the bonus taxable as income? 

Yes, if the amount exceeds 30 days of minimum wage. 

Mexico News Daily

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