An aguinaldo is a law mandated Christmas bonus provided to all employees in Mexico by their employers that is meant to cover the extra holiday expenses. Mexico’s Federal Labor Law states that all employees from domestic workers to higher-ups are entitled to the aguinaldo Christmas bonus.
Calculating Mexico’s Aguinaldo Christmas Bonus
The aguinaldo is paid based on 15 days worth of wages if the employee has been with the company for a year. If the employee has worked less than a year, the amount is prorated. The aguinaldo for employees who have worked over a year is calculated by dividing the monthly gross wages by 30 days to get the daily rate. That daily rate is then multiplied by 15 to total the 15 day aguinaldo.
The aguinaldo is subject to income tax if it surpasses a certain amount, in this case, the employer is expected to withhold and submit the tax as a usual wage.
When deciding to manufacture in Mexico, understanding every detail of your costs is important for sustaining a successful operation. Understanding how benefits work is the first step to becoming an employer of choice.