Settlement Payment Calculation Mexico (Finiquito)

A Settlement Payment Calculation Mexico (Finiquito) is the mandatory accounting document used by Mexican employers to calculate and pay all accrued but unpaid statutory benefits owed to a departing worker at the end of any employment relationship, regardless of the reason for termination — voluntary resignation (renuncia voluntaria), dismissal with cause (rescisión con causa justificada under Article 47 LFT), unjustified dismissal (despido injustificado), mutual agreement termination, retirement (jubilación), or death. The Finiquito is governed primarily by Articles 76 through 80 and Article 87 of the Ley Federal del Trabajo (LFT), published in the Diario Oficial de la Federación on 1 April 1970, which establish the vacation, vacation premium, and Christmas bonus (aguinaldo) entitlements that accrue proportionally throughout the year.

The distinction between the Finiquito and the Liquidación is fundamental in Mexican labour law: the Finiquito covers only accrued benefits already earned but not yet paid — it is owed to every departing worker and does not depend on whether the termination was justified or unjustified. The Liquidación, by contrast, adds the constitutional indemnity (indemnización constitucional) of three months' salary plus 20 days per year of service under Article 50 LFT, payable only when termination is unjustified or by mutual agreement. In practice, the Finiquito is always the foundation of a Liquidación, and both calculations must be presented to the CFCRL (Centro Federal de Conciliación y Registro Laboral) when the parties seek ratification of a termination agreement under the reformed Article 33 LFT.

The main components of the Finiquito under the Ley Federal del Trabajo include: (1) vacation days accrued but not taken (días de vacaciones no disfrutadas) — calculated under the reformed Article 76 LFT effective 1 January 2023, which provides a minimum of 12 working days of paid vacation after the first year, increasing by two days per year of service; (2) vacation premium (prima vacacional) under Article 80 LFT — at least 25% of the vacation day pay for each accrued vacation day; (3) proportional Christmas bonus (aguinaldo proporcional) under Article 87 LFT — at least 15 days' salary per year, prorated for the fraction of the year worked; and (4) proportional profit-sharing (PTU proporcional) under Articles 117 through 131 LFT — the worker's share of 10% of the employer's annual taxable profits for the days worked in the fiscal year, estimated if the final annual result is not yet available.

The 2022 vacation reform (Decreto de reforma a los artículos 76 y 78 LFT, published in the DOF on 27 December 2022, effective 1 January 2023) significantly increased Finiquito amounts for workers with accrued vacation entitlements: the pre-reform minimum of 6 vacation days after year one was doubled to 12 days, with each subsequent year adding two additional days. Workers who separated before the reform accrued under the old scale; workers separating on or after 1 January 2023 are entitled to the new, higher vacation table. Courts and the CFCRL apply the reformed Article 76 LFT to all separations occurring from the reform's effective date regardless of when the employment relationship began.

The Finiquito calculation must use the worker's ordinary daily salary as the base for vacation and vacation premium calculations, while the proportional aguinaldo under Article 87 LFT uses the daily salary proportionally. The Salario Diario Integrado (SDI) under Article 84 LFT is not typically used for Finiquito purposes — it is the basis for IMSS quota calculations and the Liquidación indemnities, but the LFT text for vacation (Article 76) and aguinaldo (Article 87) refers to the worker's salary (salario) rather than the SDI, though more generous employment contracts may use the SDI as the Finiquito base.

A Settlement Payment Calculation Mexico is required whenever any employment relationship under the Ley Federal del Trabajo comes to an end, regardless of the reason — the Finiquito is an unconditional obligation owed by every employer to every departing worker under Articles 76 through 80 and Article 87 LFT.

The Finiquito is required when a worker voluntarily resigns (carta de renuncia). Many employers incorrectly believe that a voluntary resignation extinguishes all obligations — in fact, the resigning worker retains full entitlement to proportional aguinaldo (Article 87 LFT), accrued but untaken vacation days at daily salary rate (Article 76 LFT), proportional vacation premium (Article 80 LFT), and proportional PTU for the fiscal year (Articles 117–131 LFT). Employers who pay a token Finiquito below the LFT entitlements risk the worker challenging the settlement before the CFCRL within two years of the separation date under Article 516 LFT.

The calculation is required when a worker is dismissed for just cause (rescisión con causa justificada) under Article 47 LFT — the employer owes the Finiquito even when the dismissal is fully justified. Workers dismissed for repeated unjustified absences under Article 47, Fraction X LFT, for property theft, or for serious insubordination are not entitled to the constitutional indemnity (three months' salary and 20 days per year of service) — but they are still entitled to the proportional aguinaldo, accrued vacation, prima vacacional, and PTU for the year.

The Finiquito calculation is needed when an employment relationship is terminated by mutual agreement (convenio de terminación por mutuo consentimiento) to be ratified before the CFCRL under reformed Article 33 LFT. The CFCRL conciliator reviews the Finiquito amounts to verify that the agreed total meets the statutory minimums — agreements that purport to settle the relationship for less than the LFT minimum Finiquito are not ratified.

The document is required at the time of IMSS worker de-registration (Baja del Trabajador) through the SUA (Sistema Único de Autodeterminación). The employer must file the Baja within five working days of the employment separation, specify the separation cause and date, and issue a final CFDI de nómina reflecting all Finiquito amounts paid. Discrepancies between the final CFDI de nómina amounts and the Finiquito calculation create IMSS audit exposure for SDC underreporting.

The settlement calculation is also required when a worker's employment is suspended under Article 42 LFT — for example, during military service or IMSS incapacity — and the suspension is ultimately converted into a termination. The accrual period for the Finiquito components runs continuously from the employment start date through the effective termination date, regardless of any suspension periods unless the suspension contract or the LFT expressly excludes specific periods from accrual.

A valid Settlement Payment Calculation Mexico under Ley Federal del Trabajo arts. 76–80 and 87 must contain the following essential elements to comply with CFCRL requirements, satisfy Article 804 LFT record retention obligations, and be enforceable as a settlement document before the Tribunales Laborales.

Worker and Employer Identification: The full legal names, RFCs, NSS (Número de Seguridad Social for IMSS), and CURP of the worker; the employer's razón social, RFC, and Registro Patronal. The separation date (fecha de baja) must match the IMSS Baja del Trabajador filing date — discrepancies create IMSS audit exposure and may affect the worker's accumulated contribution weeks (semanas cotizadas).

Seniority Period and Calculation Basis: Precise start date (fecha de ingreso) and termination date (fecha de baja) in DD/MM/YYYY format; complete years of service and additional months for the current incomplete year. The reformed Article 76 LFT vacation table (effective 1 January 2023) must be applied to determine the applicable annual vacation entitlement — the table specifies 12 days in year 1, 14 days in year 2, 16 days in year 3, 18 days in year 4, and 20 days in years 5 through 9, with subsequent increases per the statutory progression.

Accrued Vacation Days Calculation: The number of annual vacation days to which the worker is entitled under the reformed Article 76 LFT based on their completed years of service; multiplied by the fraction of the current year worked (days worked in current year ÷ 365) to arrive at the proportional vacation days; multiplied by the worker's daily salary. Additionally, any unused vacation days from prior years to which the worker was entitled (días de vacaciones vencidas pendientes de disfrute) must be included — Article 516 LFT provides a two-year prescription period for vacation claims.

Vacation Premium Calculation: 25% of the proportional vacation pay calculated above, per Article 80 LFT. The vacation premium is payable whenever vacation is taken or at termination for accrued but untaken days — it is not deferred to an annual payment date. The ISR exemption for vacation premium under Article 93, Fraction XIV of the Ley del Impuesto sobre la Renta covers amounts up to 15 times the general minimum daily wage per year — approximately $4,182 MXN for 2025.

Proportional Aguinaldo: Calculated as: (months or fraction of year worked ÷ 12) × aguinaldo days agreed (minimum 15 under Article 87 LFT) × daily salary. Article 87 LFT requires that the proportional aguinaldo be paid within the Finiquito — the portion corresponding to the fraction of the year worked before the separation date is owed even if the worker separates in January after receiving the prior December's aguinaldo. The ISR exemption for aguinaldo under Article 93, Fraction XIV LISR covers up to 30 times the general daily minimum wage — approximately $8,364 MXN for 2025.

Proportional PTU: The worker's estimated share of PTU (Participación de los Trabajadores en las Utilidades) for the current fiscal year, based on the days worked before separation. The actual PTU amount cannot be calculated until the employer files its annual ISR return for the fiscal year — for calendar-year taxpayers, this is by 31 March of the following year for individuals (personas físicas) or 31 May for legal entities (personas morales). The Finiquito may either pay an estimated PTU amount or establish a deferred payment obligation specifying when the actual PTU will be settled once the annual result is confirmed. Workers who separate during the year and have not yet received PTU for the preceding year are entitled to both the prior-year PTU amount and the estimated current-year PTU in their Finiquito.

Outstanding Salary and Benefits: Any ordinary salary, overtime pay, or other benefits accrued through the separation date but not yet paid in the most recent payroll period. This reconciliation ensures that the Finiquito covers all monetary obligations — its payment by the employer and acknowledgment by the worker extinguishes the cited obligations, though the CFCRL conciliator must ratify the document under Article 33 LFT to make the release binding.

Total Net Finiquito Amount and ISR Treatment: A clearly itemized total of all Finiquito components; the ISR-exempt and taxable portions of each component under Articles 93 and 94 LISR; and the net amount payable after any applicable ISR withholding. The final CFDI de nómina must separately code each Finiquito component using the SAT's CFDI Nómina complemento perception catalog codes.

Worker Acknowledgment and CFCRL Reference: The worker's signature acknowledging receipt of the total Finiquito amount; and where applicable, the CFCRL ratification reference (constancia de ratificación) confirming that the CFCRL conciliator verified compliance with the LFT minimum entitlements under reformed Article 33 LFT. Forms-legal.com provides this Settlement Payment Calculation Mexico template as a practical tool for HR compliance and CFCRL preparation. Every Finiquito should be reviewed by a licensed Licenciado en Derecho to confirm that vacation table, PTU, and ISR calculations are current with the latest LFT reform and SAT criteria.