---
title: "Mexico Termination & Severance 2026"
description: "Mexico: full severance owed from day one, no notice required. Constitutional indemnity = 3 months salary + 0.667 months/year. Final pay due immediately."
canonical: https://www.teamed.global/country-hiring-guides/mexico/termination-and-severance
---

Mexico · Termination child

Served by Teamed vetted partner-entity network in Mexico

# How do you *terminate an employee in Mexico* in 2026?

Every employee in Mexico is protected from day one. Dismiss without just cause and you owe 3 months of salary plus 0.667 months per year worked, payable on the final day, regardless of tenure ([LFT Art. 47 / Const. Art. 123](https://cms.law/en/int/expert-guides/cms-expert-guide-to-dismissals/mexico)).

Last reviewed 12 June 2026 · Mexico guide

![A warm afternoon view of a Mexican city plaza with terracotta buildings and shade trees.](/images/country-guides/mexico-termination-severance.webp)

Illustration · Mexico City, Mexico

Answer.cite this

Mexico protects every employee from the first day of work. There is no qualifying period. Dismiss an employee without just cause and the full constitutional severance is owed: 3 months of integrated daily salary, plus 0.667 months per year of service.

A seniority premium (prima de antigüedad) adds 1.714 weeks per year. The daily rate for this component is capped at MX$MX$ 630.08. That cap applies regardless of what the employee actually earns.

Mexico has no statutory notice period. The employer must deliver written dismissal on the last day of employment. Final pay is due the same day. An employee has 8 weeks to file a claim ([LFT Art. 518](https://leyes-mx.com/ley_federal_del_trabajo/518.htm)).

![A signed document on a wooden desk with a pen beside it, sunlight from a window.](/images/country-guides/mexico-termination-polaroid-1.webp)

The liquidación

## What counts as just cause for dismissal in Mexico?

Mexico requires a specific legal reason to dismiss without paying severance. The law lists more than 20 grounds in [Article 47 of the Ley Federal del Trabajo](https://cms.law/en/int/expert-guides/cms-expert-guide-to-dismissals/mexico). If the reason does not fit one of them, the dismissal is treated as unjustified.

Unjustified dismissal triggers the full constitutional indemnity. That is 3 months of salary plus 0.667 months per year, due on the last day.

The most commonly used just-cause grounds under [LFT Art. 47](https://cms.law/en/int/expert-guides/cms-expert-guide-to-dismissals/mexico) include:

- **Dishonesty or deception** at the time of hiring (e.g., false credentials)
- **Violence, insults or harassment** against colleagues, managers or clients
- **Damage caused intentionally** to company property
- **Serious carelessness** that endangers safety
- **Three absences in a 30-day period** without justification
- **Disclosure of trade secrets**
- **Imprisonment** resulting in failure to attend work
- **Court-confirmed immoral acts** at the workplace

The employer must deliver written notice of dismissal stating the specific ground and the date of the conduct, and the conduct must have occurred within the prior 30 days. If personal delivery fails, the dismissal notice must be filed with the Labour Board within 5 working days. A failure to meet any of these procedural requirements does not automatically void the just-cause finding, but it weakens the employer's position significantly in conciliation or at tribunal.

Performance-related dismissal requires documented prior warnings, clear performance standards communicated to the employee, and a demonstrable failure to meet them. Poor performance alone is not a recognised just-cause ground; employers who dismiss for performance without adequate documentation almost always face an unjustified-dismissal finding.

### Protected categories

Certain dismissals are prohibited outright. Terminating an employee because of pregnancy, union membership, age, disability, sexual orientation, religion, or whistleblowing is not valid and can expose the employer to both reinstatement and additional compensation. Dismissal of a pregnant employee triggers an automatic presumption of wrongful termination under [LFT Article 164](https://leglobal.law/countries/mexico/employment-law/employment-law-overview-mexico/07-termination-of-employment-contracts/).

1. Identify the just-cause ground Anchor the dismissal to a specific Article 47 ground before taking any action. An imprecise or absent ground converts a for-cause dismissal into an unjustified one and triggers the full constitutional indemnity.
2. Gather and preserve evidence Document the specific conduct, date it, and retain the evidence. The conduct must have occurred within the prior 30 calendar days. Late-dated or missing evidence is the most common reason just-cause findings fail.
3. Draft the written dismissal notice Prepare the *aviso de rescisión* naming the specific legal ground and the date of the act. Hand it to the employee on the last day of employment.
4. File with the Labour Board if delivery fails If the employee refuses to accept the notice or cannot be located, file it with the Labour Board within 5 working days. Missing this deadline weakens the formal record significantly.
5. Calculate and pay the full amount on the final day Pay the *finiquito* (accruals) on the last day regardless of cause. For unjustified dismissal, pay the liquidación at the same time. Delays trigger back-wage liability from day one.

## How much notice must you give in Mexico?

Mexico requires no advance notice from the employer. Termination takes effect immediately when written notice is given.

The employee also has no statutory obligation to give notice when resigning. The employer must pay all amounts owed on the final day.

Mexico does not have a statutory notice period for employers or employees. This is distinct from the UK model, where notice scales with tenure. In Mexico, termination is effective immediately. The requirement is not advance notice but a written dismissal letter (*aviso de rescisión*) delivered on the day, stating the specific legal ground and the date of the conduct that triggered it.

| Tenure | Employer notice required | Employee notice required |
| --- | --- | --- |
| Probation (standard positions) | None | None |
| Probation (managers / specialists) | None | None |
| Any service length | 0 weeks advance notice | 0 days advance notice |

Market practice is for employees to give 15 to 30 days when resigning, but this is a contractual expectation, not a legal one. Many employment contracts set a 30-day resignation notice clause. Employers who want contractual notice should include it explicitly; they cannot assume a statutory equivalent exists.

### Probation periods

Standard roles carry a maximum probation of 1 month. Directors, managers and specialist professionals can serve up to 6 months. The probation clause must be written into the employment contract; without it, the employee gains full indefinite status from day one. Probation is non-extendable. If the employer does not act before the probation period ends, the employee converts automatically to an indefinite-term contract ([LFT Art. 39-A](https://www.payrollmexico.com/insights/probation-trial-period-mexico)).

## How is severance calculated when dismissal is unjustified?

Unjustified dismissal triggers three payments. First: 3 months of integrated daily salary (the constitutional indemnity). Second: 0.667 months per year of service. Third: a seniority premium of 1.714 weeks per year, with the daily rate capped at MX$ 630.08 per day.

All three payments are owed from the first day of employment. There is no qualifying period.

L&E Global · Mexico termination overview

Unjustified termination in Mexico requires three components: a fixed 3 months constitutional indemnity, 0.667 months per year of service (the *veinte días* component), and a seniority premium of 1.714 weeks per year capped at MX$ 630.08 per day. All are calculated on the Integrated Daily Salary (SDI), which includes base pay plus proportional recurring benefits.

Source: [L&E Global, Termination of employment contracts in Mexico](https://leglobal.law/countries/mexico/employment-law/employment-law-overview-mexico/07-termination-of-employment-contracts/)

### The three components in detail

| Component | Amount | Basis | Cap |
| --- | --- | --- | --- |
| Constitutional indemnity (fixed) | 3 months | Integrated daily salary (SDI) | None |
| Service-linked component (20 days/year) | 0.667 months per year | Integrated daily salary (SDI) | None on years or total |
| Seniority premium (prima de antigüedad) | 1.714 weeks per year | Daily rate, capped at MX$ 630.08/day | MX$ 630.08/day regardless of actual salary |

### What is the Integrated Daily Salary (SDI)?

Mexico calculates severance on the *Salario Diario Integrado* (SDI), not on base salary alone. The SDI includes base pay plus the proportional daily value of recurring benefits: the *aguinaldo* (Christmas bonus, minimum 15 days), vacation premium, and any other regular benefit with a salary character. For most employees the SDI is meaningfully higher than base pay. Get this calculation wrong and the severance figure is understated, creating a liability gap if the employee disputes it.

### Final pay: what else is owed on the last day?

Beyond the severance components, the employer owes *finiquito* items on the last working day: accrued but unpaid salary, proportional *aguinaldo* for the year to date, accrued vacation days not taken (plus the 25% vacation premium), and any outstanding expense claims. The *liquidación* (if applicable) is the severance package; the *finiquito* is the accruals settlement. Both are due on the day of dismissal under the constitutional principle that wages cannot be withheld ([LFT Art. 47 / 89](https://leglobal.law/countries/mexico/employment-law/employment-law-overview-mexico/07-termination-of-employment-contracts/)). Delay triggers back-wage liability from the date of dismissal.

## What rules apply to collective workforce reductions?

Mexico has no fixed headcount threshold that triggers formal collective rules. Any permanent workforce reduction on economic, structural or force-majeure grounds requires authorisation from the Labour Court (Junta de Conciliación y Arbitraje).

The employer must file a petition, notify affected employees and their union (if any), and receive a court ruling before implementing the redundancies.

Unlike the UK or French models, Mexican law does not set a headcount number at which collective rules kick in. The requirement for Labour Court authorisation applies to all reductions driven by economic necessity, technological change, or force majeure, regardless of whether one employee or one hundred are affected ([LFT Arts. 427-434](https://leglobal.law/countries/mexico/employment-law/employment-law-overview-mexico/07-termination-of-employment-contracts/)).

### What the court process requires

- **Written petition** to the Labour Court documenting the economic or structural grounds
- **Evidence of necessity**: financial records, restructuring plan, evidence of force majeure if claimed
- **Union negotiation** where the workforce is unionised: the employer must demonstrate it sought agreement first
- **Court decision**: the law does not specify a fixed decision timeline; in practice proceedings take weeks to months
- **Payment on authorisation**: if the court approves, the employer owes the same severance formula that applies to unjustified dismissal, plus any union-negotiated enhancements

An employer who proceeds with collective redundancies without court authorisation faces individual claims from each affected employee and potentially criminal liability for the officers responsible. Skipping the process is not a shortcut; it is the highest-risk path.

Where employees are covered by a collective bargaining agreement (*Contrato Colectivo de Trabajo*), the agreement may specify higher severance multiples or additional consultation requirements above the LFT floor. Always check the applicable agreement before modelling redundancy costs.

## Can you end employment by mutual agreement in Mexico?

Yes. An employee can resign or both parties can agree to end the relationship. The employer must still settle all accrued items (finiquito) immediately.

Mutual separation does not automatically waive the employee's right to the seniority premium. After 6 months of continuous service, the employee keeps that right even on voluntary resignation.

The standard voluntary resignation involves the employee giving notice (contractual or as agreed) and the employer paying the *finiquito*: accrued salary, proportional *aguinaldo*, accrued vacation plus premium. No constitutional indemnity or 20-days-per-year component is owed when the employee resigns without employer fault.

However, the seniority premium (prima de antigüedad) does apply to voluntary resignations once the employee has at least 15 years of continuous service. Below that threshold, the premium is only owed on unjustified dismissal or on justified dismissal initiated by the employer ([LFT Art. 162](https://www.payrollmexico.com/insights/what-is-seniority-bonus-mexico)).

### Constructive dismissal (rescisión por causa justificada del trabajador)

Under [LFT Article 51](https://leglobal.law/countries/mexico/employment-law/employment-law-overview-mexico/07-termination-of-employment-contracts/), an employee may treat themselves as constructively dismissed when the employer materially breaches fundamental obligations: unpaid wages, dangerous working conditions, deception at hiring, or employer violence. In this scenario the employee is owed the full constitutional indemnity as though unjustifiably dismissed. The employer faces the same three-component severance exposure as on a unilateral unjustified dismissal.

### Mutual separation agreements

Employers and employees can negotiate a mutual separation, typically framed as a *convenio de terminación de la relación laboral*. The agreement must be signed before the Centro Federal de Conciliación y Registro Laboral or the relevant Labour Board to be enforceable as a waiver of future claims. A private agreement without institutional ratification cannot bar the employee from filing a claim later. The process provides the employer with a clean record of voluntary, informed consent and is the preferred exit route when negotiating an enhanced package above the statutory floor.

## How Teamed runs Mexico terminations

Teamed is your legal [employer of record](/lp/employer-of-record) in Mexico. The cost is [**from $599 per employee per month**](/pricing), with **zero FX mark-up** in any currency. All termination procedures run through Teamed's Mexico team.

We handle the just-cause assessment, the dismissal letter, the SDI calculation, the full severance package, and the same-day payment. All of it runs on **one platform**. The decision on who to dismiss, why, and on what terms is always yours.

**Real HR and legal experts** handle your Mexico hires, from the first offer letter through every IMSS registration and payroll run. **An actual person**, not a ticket queue. There is **no setup fee** and **no exit fee**, and employer cost **passes through at cost, itemised** on every invoice.

The split of responsibilities under EOR for Mexico terminations:

| What Teamed handles | What the client decides |
| --- | --- |
| Just-cause assessment against LFT Art. 47 grounds | Whether to dismiss and the business reason |
| Drafting and delivery of the written dismissal notice | Communication strategy with the wider team |
| SDI calculation including proportional benefits | Whether to pay above the statutory floor |
| Constitutional indemnity: 3 months + 0.667 months/year + prima de antigüedad calculation | Decision to negotiate a mutual-agreement settlement |
| Same-day finiquito and liquidación payment | Enhanced severance terms beyond the legal minimum |
| IMSS and INFONAVIT de-registration, final payroll, tax withholding | Reference wording for future employers |
| Conciliation filing at the Centro Federal de Conciliación y Registro Laboral if a claim is raised | Settlement vs contest strategy on any claim |

Mexico's severance model punishes procedure failures immediately. The SDI calculation, the dismissal letter content, the timing of payment: get any one of them wrong and a clean exit becomes a contested claim. Teamed's team runs this every week across multiple Mexico clients, so the institutional memory is there when you need it on a single termination.

EOR payroll, contractor onboarding, and entity setup all live on **one platform**. A Mexico contractor who converts to PAYE keeps their record, and that same employee can **graduate** to your own Mexico entity without switching systems. Run the [Crossover Calculator](https://www.teamed.global/tools/crossover-calculator) to see the month the model flips. EOR is the right model for a first Mexico hire, **until it isn't**. Start from the Mexico hiring overview; each guide here covers one layer of Mexico employment law.

Key sources: [CMS Law, Mexico termination overview](https://cms.law/en/int/expert-guides/cms-expert-guide-to-dismissals/mexico), [L&E Global, Mexico employment law](https://leglobal.law/countries/mexico/employment-law/employment-law-overview-mexico/07-termination-of-employment-contracts/), and [Payroll Mexico, mandatory severance guide](https://www.payrollmexico.com/insights/mandatory-severance-mexico).

## Frequently asked questions

Does Mexico require an employer to give advance notice before terminating an employee?

No. Mexico has no statutory advance notice requirement for employers. Dismissal takes effect immediately. The employer must deliver a written notice on the last day stating the specific legal ground under LFT Art. 47. If personal delivery is not possible, the notice must be filed with the Labour Board within 5 working days.

How is severance calculated for unjustified dismissal in Mexico?

Three payments apply: a fixed constitutional indemnity of 3 months of integrated daily salary, a service-linked component of 0.667 months per year of service, and a seniority premium of 1.714 weeks per year. The seniority premium daily rate is capped at MX$ 630.08 per day regardless of the employee's actual salary. All three are calculated on the Integrated Daily Salary (SDI), which includes base pay plus proportional recurring benefits.

Is there a qualifying period before an employee can claim unjustified dismissal in Mexico?

No. Protection against unjustified dismissal applies from the first day of employment. There is no minimum qualifying period. However, the employee must file any claim within 8 weeks of separation under LFT Art. 518, or the right to claim prescribes.

How long can a probation period last in Mexico?

Standard roles carry a maximum probation period of 1 month. Directors, managers, technical specialists and highly specialised professionals can serve up to 6 months. The clause must be written into the employment contract before the employee starts. If the employer fails to act before the probation period ends, the employee converts automatically to indefinite-term status.

When must the final pay be made after termination in Mexico?

Final pay is due immediately, on the last working day. Both the finiquito (accrued salary, proportional aguinaldo, vacation and premium) and the liquidación (severance, where unjustified dismissal applies) must be settled the same day. Delays trigger back-wage liability that runs from the date of dismissal.

Does Mexico have a collective redundancy process with a headcount trigger?

Mexico has no fixed headcount threshold equivalent to the UK or French model. Any permanent workforce reduction on economic or structural grounds requires Labour Court authorisation, regardless of numbers. The employer must file a petition, present evidence of necessity, negotiate with the union if applicable, and receive a ruling before implementing the reductions.

Teamed Legal Operations

The SDI calculation is where Mexico terminations go wrong. Employers calculate on base salary and forget the proportional aguinaldo and vacation premium. The employee's lawyer calculates on the full integrated daily salary. That gap is the dispute.

A note from Tom Price-Daniel

In Mexico every employee is protected from day one. Dismiss without cause and you owe 3 months salary plus 0.667 months per year, on the final day.  
Most disputes come from the SDI calculation, not the multiples.  
Get the process right and a Mexico exit is clean.

Tom Price-Daniel · Co-founder, Teamed

## Related Mexico guides

- Hiring in Mexico, overviewparent
- [UK termination and severance (for contrast)](/country-hiring-guides/united-kingdom/termination-and-severance)neighbour
- [Employer of Record overview](/lp/employer-of-record)core
- [Pricing, Zero FX Fixed](/pricing)core
- [EOR vs Entity Crossover Calculator](https://www.teamed.global/tools/crossover-calculator)tool
- [Employer Cost Calculator](https://www.teamed.global/tools/employer-cost)tool
- [Talk to an expert](https://www.teamed.global/contact)CTA

A note on this page.

This is a guide, not legal, tax or accounting advice. Rules change and vary by jurisdiction, so verify current requirements with the relevant authorities, the Secretaría del Trabajo y Previsión Social (STPS) and the Centro Federal de Conciliación y Registro Laboral for Mexico, or speak to a qualified professional, before relying on any specific framework. The Ley Federal del Trabajo continues to evolve: the working-hours reform published in May 2026 begins a phased reduction from 2027, and IMSS contribution rates for Cesantía y Vejez continue their annual upward phase-in through 2030.