Navigating employee benefits in Mexico is essential for any company operating in the country—whether you're a local business, a multinational expanding into Latin America, or using an Employer of Record (EOR) to hire talent. Mexican labor law, governed primarily by the Federal Labor Law (Ley Federal del Trabajo - LFT), establishes a robust framework of mandatory benefits that all employers must provide. Beyond these legal requirements, many companies offer non-mandatory (voluntary) benefits to attract and retain top talent.

This guide breaks down both categories with updated information for 2025, including recent reforms and practical insights.

Mandatory Benefits in Mexico (Required by Law)

These benefits are non-negotiable and must be provided to all formal employees under Mexican labor law. Failure to comply can result in fines, lawsuits, or intervention by the Secretaría del Trabajo y Previsión Social (STPS).

Benefit Legal Requirement Details (2025)

Christmas Bonus (Aguinaldo) Art. 87 LFTMinimum 15 days of salary, paid before December 20. Proportional for employees with less than a year.

Profit Sharing (PTU) Art. 117–122 LFT 10% of company’s annual taxable profit distributed among eligible employees (excludes directors and general managers). Paid by May 30 (corporations) or April 30 (individuals).

Vacation & Vacation Premium Art. 76 & 80 LFT 12 days minimum after 1 year (increases with seniority). 25% premium on vacation pay. 6+ years: +2 days per year.

Social Security (IMSS) Ley del Seguro Social Employer contribution: ~30–40% of salary (varies by risk level and benefits). Covers healthcare, disability, retirement, childcare, and occupational risk insurance.

INFONAVIT Housing Fund Ley del INFONAVIT 5% of integrated salary contributed by employer to employee’s housing fund (used for mortgage or returned at retirement).

Severance Pay Art. 48, 50 LFT Upon unjustified dismissal: 3 months’ salary + 20 days per year worked + prorated benefits. Seniority premium after 15+ years.

Maternity & Paternity Leave Art. 170 LFT 12 weeks paid maternity leave (6 pre, 6 post-birth). 5 days paid paternity leave. Adoption: same benefits.

Sick Leave IMSS Paid by IMSS after 3rd day (employer covers first 3 days for non-occupational illness).

National Holidays Art. 74 LFT 9 paid holidays (e.g., Jan 1, May 1, Sep 16, Dec 25). Work on holidays = triple pay.

Sunday Premium Art. 71 LFT 25% extra pay for work on Sundays (or compensatory rest day).

Seniority Premium Art. 162 LFT After 15 years: 12 days’ salary per year worked upon termination (capped at twice the minimum wage).

" Note: The minimum wage in Mexico for 2025 is $278.80 MXN/day (general zone) and $418.20 MXN/day in the Free Zone of the Northern Border (ZLFN). All benefits are calculated based on the integrated daily salary (SDI), which includes base salary + taxable benefits. "

Non-Mandatory (Voluntary) Benefits in Mexico

While not required by law, these benefits are common in competitive industries (tech, finance, manufacturing, BPOs) and significantly boost employee satisfaction and retention.

Benefit Why Offer It? Common Practice

Private Health Insurance (Gastos Médicos Mayores) Complements IMSS 70% of large companies offer it. Covers employee + (faster service, private hospitals) dependents.

Food Vouchers (Vales de Despensa) Tax-exempt up to ~$500–$1,000 MXN/month Widely used. Accepted at supermarkets.

Savings Fund (Fondo de Ahorro) Employee + employer contributions Paid annually or upon termination. (e.g., 10% each) Encourages savings.

Life Insurance Financial security for families Often 12–24 months of salary.

Transportation Support Covers commuting costs Common in urban areas (CDMX, Monterrey).

Home Office Allowance Internet, electricity, equipment Increasing post-pandemic (~$1,000–$2,000 MXN/month).

Gym Membership / Wellness Programs Health and productivity Popular in tech and corporate environments.

Additional Vacation Days Retention tool Many companies offer 15–20 days from year 1.

Performance Bonuses Motivation and alignment Quarterly or annual, based on KPIs.

Childcare Vouchers Support for working parents Especially for single mothers.

Pro Tip: Non-mandatory benefits can be tax-deductible if structured correctly (e.g., food vouchers, savings funds). Consult a local payroll expert.

Key Differences: Mandatory vs. Non-Mandatory

Aspect Mandatory Non-Mandatory

Legal Obligation Yes (LFT, IMSS, INFONAVIT) No

Non-Compliance Risk Fines, lawsuits, audits None

Tax Treatment Mostly taxable (except exemptions) Often tax-exempt (if compliant)

Employee Expectation Baseline Competitive advantage

Special Considerations for 2025

1. Telework Law (2021, still in force): Employers must provide proportional tools/internet if home office is agreed.

2. Dignified Pension Reform: Employees can now choose AFORE with better returns. Employers must inform.

3. Increased STPS Inspections: Focus on PTU, vacations, and IMSS contributions.

4. Northern Border Zone: Higher minimum wage and tax incentives (ISR, IVA).

How to Stay Compliant

• Use payroll software compliant with SAT and IMSS (e.g., NominaPlus, Contpaqi).

• Partner with an Employer of Record (EOR) if hiring remotely or internationally.

• Conduct annual labor audits.

• Train HR on LFT updates (published in DOF).

Conclusion

Providing mandatory benefits is not optional—it’s the foundation of legal compliance in Mexico. But in a competitive talent market, non-mandatory benefits are what set your company apart.

Whether you're a startup in Guadalajara or a multinational in Mexico City, balancing legal obligations with attractive perks is key to building a loyal, productive workforce.

Need help managing benefits in Mexico? Consider partnering with an EOR provider to handle payroll, IMSS, INFONAVIT, and compliance—without setting up a local entity.