Mexico Severance Pay for Unjust Dismissal: 3 Months + 20 Days per Year
This calculator estimates the constitutional indemnity for unjust dismissal in an indefinite employment relationship: three months of wages (article 48 LFT) plus 20 days per year of service (article 50, fractions II and III).
Default example: monthly salary MXN 15,000 and 2 completed years → daily wage MXN 500 (monthly ÷ 30, article 89) → three months = MXN 45,000 → 20 days × 2 years = MXN 20,000 → total MXN 65,000.
What is the constitutional indemnity?
When an employer dismisses a worker without just cause and the relationship is indefinite, the Mexican Federal Labor Law (LFT) gives the worker the right to demand reinstatement or a three-month wage indemnity (article 48). If the relationship exceeds the first year, 20 days of wages per year of service are added (article 50, fractions II and III). Together these make up what is commonly called the constitutional severance (liquidación).
Severance (liquidación) vs finiquito: not the same
The finiquito covers already-earned benefits: proportional Christmas bonus, unused vacation days, vacation premium and other accrued items up to the separation date. The liquidación (constitutional indemnity) compensates the unjust dismissal. This calculator only estimates the liquidación; the finiquito is computed separately benefit by benefit.
How it is calculated (articles 48, 50 and 89)
dailyWage = monthlySalary ÷ 30 (art. 89) threeMonths = 3 × monthlySalary (art. 48) twentyDays = dailyWage × 20 × completedYears (art. 50-II) total = threeMonths + twentyDays (art. 50-III)
Quick scenario table
| Monthly salary | Completed years | Daily wage | 3 months | 20 days per year | Total severance |
|---|---|---|---|---|---|
| MXN 10,000 | 1 | MXN 333.33 | MXN 30,000 | MXN 6,666.67 | MXN 36,666.67 |
| MXN 15,000 | 2 | MXN 500.00 | MXN 45,000 | MXN 20,000 | MXN 65,000.00 |
| MXN 20,000 | 5 | MXN 666.67 | MXN 60,000 | MXN 66,666.67 | MXN 126,666.67 |
| MXN 30,000 | 10 | MXN 1,000.00 | MXN 90,000 | MXN 200,000 | MXN 290,000.00 |
| MXN 25,000 | 3 | MXN 833.33 | MXN 75,000 | MXN 50,000 | MXN 125,000.00 |
Worked example step by step
With a monthly salary of MXN 25,000 and 3 years of service:
- Daily wage: MXN 25,000 ÷ 30 = MXN 833.33
- Constitutional indemnity: 3 × MXN 25,000 = MXN 75,000
- Twenty days per year: 833.33 × 20 × 3 = MXN 50,000
- Total: MXN 125,000.00
What this estimate includes and excludes
- Includes the 3-month constitutional indemnity plus the 20 days per year for indefinite contracts.
- Back wages: article 48 lets unjustly dismissed workers claim back wages for up to 12 months, with 2% monthly interest; this calculator does not estimate them.
- Seniority premium: 12 days per year (article 162 LFT) up to a legal cap of two minimum wages; it is paid on top of the indemnity and is not included here.
- Fixed-term contracts: different rules apply (article 50, fraction I); this tool covers indefinite employment only.
- Income tax: severance payments have special treatment under the Mexican Income Tax Law; this page does not calculate taxes. Confirm with an accountant.
- Finiquito (Christmas bonus, vacation, vacation premium): computed separately.
Official sources
- Federal Labor Law (articles 48, 50 and 89) — Cámara de Diputados
- Secretaría del Trabajo y Previsión Social (STPS)
Related Mexico labor tools:
- Mexico vacation pay calculator
- Mexico Christmas bonus calculator
- Mexico overtime calculator
- Mexico Sunday premium calculator
- Mexico holiday pay calculator
It is the constitutional indemnity granted by the LFT to workers dismissed without just cause in an indefinite relationship: three months of wages (article 48) plus 20 days per year of service (article 50, fractions II and III).
No. The finiquito covers already-earned benefits (proportional Christmas bonus, unused vacation, vacation premium). Severance is the indemnity for unjust dismissal. This calculator only estimates severance.
Take three months of wages and add 20 days of wages per completed year: total = 3 × monthly salary + (monthly salary ÷ 30) × 20 × years (articles 48, 50 and 89 LFT).
Yes. If the dismissal is unjustified, the worker can claim back wages for up to 12 months with 2% monthly interest (article 48). This calculator does not include them.
No. The seniority premium — 12 days of wages per year (article 162 LFT) up to a legal cap — is paid on top of the indemnity and must be calculated separately.
Different rules apply (article 50, fraction I), proportional to the length of the relationship. This calculator covers only indefinite employment.