Mexico Standard and Supplemental Benefits & Perks: A General Guide

A. - Mandatory minimum benefits offered to Mexico full time based employees (regulated by
Mexican Labor Law):
 INFONAVIT (Financial institution for government subsidized housing purchase for Mexican
employees). An amount is deducted from each paycheck and goes to an account administered
by a Bank of the employee’s choice as a form of savings to acquire a house through this
institution’s housing program.
 IMSS (Instituto Mexicano del Seguro Social, a social security government entity). An amount is
deducted from each paycheck and goes to an account administered by a Bank of the
employee’s choice as a form of saving for retirement, disability insurance and to receive minor
and major health care benefits subsidized by the Government.
 AGUINALDO (Christmas Bonus) is a lump sum that is equal to 15 days salary that every
employer must provide to the employee on a yearly basis and paid during the first 20 days of
the month of December.
 PAID VACATION DAYS. After the first year of employment, the employee receives a minimum
6 days paid vacation, the second year 8 days, third year 10 days, fourth year 12 days
 VACATION PREMIUM. In addition to the paid vacation days, the employer must pay a premium
of 25% on top of the paid vacation days.
 PAID HOLIDAYS, a total of 8 observed Mexican paid holidays.
 PROFIT SHARING. If the company or entity reports a profit during the fiscal year, the employer
must share a percentage of these profits with all employees, except Directors. This according to
a complex formula regulated by the Government.
 SENIORITY BONUS. A bonus must be paid to the employee after 15 years of seniority and for
every year employed. The employee has the right to receive 12 days of bonus.
 SEVERANCE PAYMENT. This is a lump sum that every employer must provide to the severed
employee “without cause.” Law mandates a 3 month’s salary and an additional 20 days per
every year employed (Pro-rated) to every employee that has been let go.
B. – Supplemental or Additional benefits (optional) offered in Mexico as a common practice for
Management and Professional level positions:
 MAJOR MEDICAL INSURANCE is paid for by the employer and provided to the employee
through a group policy. Sometimes the employee is asked for a small contribution. Many
companies offer this to insure their direct family members (spouse and children), as well. At
times, the family coverage has a partial cost to the employee.
 LIFE INSURANCE. This is a very common practice and only covers employee. Typically the
benefit is one year’s salary for management and professionals and up to three times salary for
senior management.
 EDUCATION REIMBURSEMENT. Employers increasingly provide support for postgraduate
studies that are directly related to current responsibilities and nature of company activities.
Common practice ranges from a capped fixed amount up to a 100% reimbursement with
above average school grades.
 SAVINGS FUND. This is an amount deducted from the employee’s paycheck that is matched by
the employer at 100% and returned to the employee at the end of the year (sometimes every 6
months) with additional annual interest which varies by company. This amount is capped by the
Federal Labor Law for tax exempt status and it can’t be above $2,400.00 pesos/month.
2531 Windward Way  Chula Vista, CA 91914 Tel: (619) 427-2310  Fax: (619) 427-2312  Email:

  BENEFIT GUIDE FOR MEXICO The Mexico benefit information provided is only a general guideline. For sales professionals. and even 60 days salary. This is a common benefit offered to Sales executives and increasingly to Senior Management and is considered as a basic working tool. 2531 Windward Way  Chula Vista.  GAS ALLOWANCE. For existing employees.  STOCKS can be provided by publicly traded companies (domestic and international) as grants. and license plates. up to two company cars (very seldom). registration fees. restricted stock or an employee stock discount purchase plan.00 pesos/month.  COMPANY CAR (Vehiculo Utilitario). If you require additional specific information or you wish to talk to a consultant. Typically reserved for senior  OFFICE LOCATIONS: SAN DIEGO  TIJUANA  MEXICO CITY . senior management may receive this benefit. In lieu of a cash gas allowance or gas expense reimbursement. salary ranges. 45. In addition. FOOD COUPONS. typically 1 to 3 months.000 pesos per month. most of the companies cover all car expenses that include car insurance. and travel expenses to and from country of origin on a monthly or quarterly basis. The employer makes the deposit when the monthly amount has been used. This is the most common practice when it is considered a basic working tool for Sales executives.  ADDITIONAL AGUINALDO (CHRISTMAS BONUS). This varies from company to company and level of employee’s position. maintenance. etc. For Executive Senior Management: Other supplemental benefits occasionally offered include Country Club membership including monthly quotas. and professionals. Most companies offer above the 15 mandatory days and can go up to 30. CA 91914 Tel: (619) 427-2310  Fax: (619) 427-2312  Email: barbachano@bipsearch.000 pesos depending on the mileage used to visit clients. This is a benefit that is typically provided as cash compensation (sometimes in food stamps) mainly used for groceries and department stores and it is also capped by the Mexican Labor Law for tax exempt status of up to $1. For non-sales employees. Children school tuition for private schools.800. The average is typically 25 to 30 days’ salary. this could be for longer periods. target workforce. stock options.500 to $4.500 pesos to $10. In lieu of car benefit. some companies provide a plastic credit card (type of a device) so the employee can use it exclusively in registered gas stations. it can range from $2. management.  HOUSING ALLOWANCE is provided on a monthly basis typically only to some employees that are moved from one city to another for employment reasons. location. preferred stock. please call Barbachano International at (619) Web site: http://www. Most of the companies cover the monthly cell phone expenses and increasingly wireless or DSL internet service for certain management positions. typically ranges between $2. Companies sometimes provide a leased car to employees with the benefit of purchasing this same auto at discounted blue book value after 3 or 4 years and receiving a newly leased car.bipsearch.  CELL AND LAPTOP. educational requirements. for new employees that are relocated this could be on a temporary basis. a car allowance is also customary. Determining competitive benefits for your company in Mexico is a task that requires benchmarking industry sector and may be affected by many factors including company size.