Mexico vacation days after the vacaciones dignas reform: the 12-day minimum and the 25% prima vacacional

Since 1 January 2023, a worker in Mexico earns at least 12 paid vacation days after the first year of service, double the 6 days the law required before. The vacaciones dignas ("decent vacations") reform rewrote Article 76 of the Federal Labor Law (LFT). Each of those Mexico vacation days also earns a prima vacacional, a vacation premium of at least 25% of the salary paid for the days off. In the first years of service, each work anniversary changes four numbers at once: the days owed, the premium, the integrated salary reported to the social security institute (IMSS), and the final settlement if the worker leaves.

How many vacation days Mexican law has required since 2023 (LFT artículo 76)

A decree published in the Diario Oficial de la Federación (DOF, the federal official gazette) on 27 December 2022 amended Mexico's paid time off law from 1 January 2023. Under the new Article 76, a worker with more than one year of service gets at least 12 working days of paid vacation. The entitlement increases by 2 days for each further year until it reaches 20 days in year 5. From the sixth year, it increases by 2 days for every five years of service.

The reform applied to people already employed on 1 January 2023: the labor ministry (STPS) confirmed that a worker completing five years in 2023 was owed 20 days. The days are working days, so weekly rest days do not count. The STPS also states that a public holiday inside a vacation period cannot be counted as a vacation day. The entitlement is per year, not cumulative: a worker completing year 5 is owed 20 days, not the sum of every earlier year.

Taking the days: 12 continuous days, the six-month window and no cash in lieu

Three rules govern when and how the days are taken:

• 12 continuous days. Article 78 gives the worker at least 12 continuous days of the annual period and lets the worker decide how to distribute that period.
• Six-month window. Article 81 requires the employer to grant the vacation within six months after each anniversary, and to give the worker an annual statement of seniority, the days owed and when they will be taken.
• No cash in lieu. Article 79 bans paying out vacation instead of granting it while employment continues.

Days the employer fails to grant within the window are still owed, subject to the one-year limitation period for labor claims in Article 516, counted from the day after the obligation became enforceable. Unused days from earlier years are usually paid in the finiquito (the final settlement when employment ends), so payroll tracks the vacation balance per worker and per anniversary, not once a year in December.

Prima vacacional: the 25% vacation premium and its 15 UMA tax exemption

Article 80 entitles the worker to a premium of no less than 25% of the salary for the vacation period, paid in addition to the vacation pay itself. At MXN$500 a day, 12 days of vacation pay is MXN$6,000, plus a prima vacacional of MXN$1,500. Employers may pay more than 25%, and many collective agreements set a higher rate.

For income tax (ISR), Article 93, section XIV of the Income Tax Law (LISR) exempts vacation premiums granted to workers on a general basis, up to the equivalent of 15 days of minimum wage per calendar year. The 2016 constitutional reform created the UMA (Unidad de Medida y Actualización, a reference unit the national statistics institute INEGI publishes each year), and since then this minimum-wage reference is read as the UMA. The daily UMA has been MXN$117.31 since 1 February 2026, so the 2026 exemption is 15 × MXN$117.31 = MXN$1,759.65. Any premium above that amount is taxable salary income.

The limit applies per calendar year, not per payment: two premium payments in 2026 share one MXN$1,759.65 exemption, so a finiquito paid after an earlier vacation in the same year may have no exemption left.

How vacation days change the SBC integration factor at each anniversary

IMSS contributions are calculated on the salario base de cotización (SBC), the integrated daily salary, which includes premiums and bonuses under Article 27 of the Social Security Law (LSS). For a fixed-salary worker, payroll multiplies the daily wage by an integration factor that adds the annual aguinaldo (the year-end bonus, at least 15 days' salary under LFT Article 87) and the annual prima vacacional, divided over 365 days:

Integration factor = 1 + (15 + vacation days × 25%) ÷ 365

With the statutory minimums, the factor is 1.0493 in the first year of service, which integrates the 12 days earned at the first anniversary. Neither the LSS nor the LFT says which service year's vacation days go into the factor; the common practice, followed in this article, is to use the days of the service year in progress. On that convention the factor rises at each of the first five anniversaries and then at every fifth one (the 10th, the 15th and so on). Each rise changes the SBC, and the employer must file a salary modification notice with IMSS within five business days (LSS Article 34, section I). An employer that grants more than the minimum days, aguinaldo or premium uses its actual benefits in the factor.

Unused and proportional vacation in the finiquito

Whatever the reason employment ends, the finiquito must include:

1. Every vacation day earned at past anniversaries and not yet taken, with its prima vacacional.
2. Proportional vacation and prima for the service year in progress, based on that year's entitlement rather than the year just completed. Article 79 grants payment proportional to the time worked when employment ends before the year is completed.

Worked example: three years of service at MXN$500 a day

Ana was hired on 1 March 2023 at MXN$500 a day, with statutory minimum benefits, and has received no other vacation premium in 2026.

Third anniversary, 1 March 2026. Ana has completed three years and earns 16 vacation days. She takes them in April 2026:

• Vacation pay: 16 × MXN$500 = MXN$8,000
• Prima vacacional: MXN$8,000 × 25% = MXN$2,000
• Exempt from ISR: 15 × MXN$117.31 = MXN$1,759.65
• Taxable prima: MXN$2,000 − MXN$1,759.65 = MXN$240.35

SBC change on the same anniversary. Using the days of the service year in progress, the factor during her third year used 16 days: 1 + (15 + 4) ÷ 365 = 1.05205, so her SBC was MXN$500 × 1.05205 = MXN$526.03. From 1 March 2026 she is in her fourth year, with an entitlement of 18 days: 1 + (15 + 4.5) ÷ 365 = 1.05342, so her SBC becomes MXN$526.71. The 68-centavo daily increase must be reported to IMSS within five business days.

Resignation, effective 1 September 2026. Ana's last day of work is 31 August 2026, exactly six months into her fourth year. The entitlement for that year is 18 days:

• Proportional vacation: 18 × 6 ÷ 12 = 9 days
• Vacation pay: 9 × MXN$500 = MXN$4,500
• Prima vacacional: MXN$4,500 × 25% = MXN$1,125
• Vacation total in the finiquito: MXN$5,625

The whole MXN$1,125 premium is taxable, because the April payment already used Ana's MXN$1,759.65 exemption for 2026. Had she never taken the April vacation, the finiquito would include 16 + 9 = 25 days: MXN$12,500 of vacation pay and MXN$3,125 of premium, with MXN$1,759.65 exempt and MXN$1,365.35 taxable.

Summary

Since 1 January 2023, LFT Article 76 sets 12 vacation days after the first year, increasing by 2 a year to 20 in year 5 and then by 2 every five years. At least 12 days are taken continuously, within six months of each anniversary, and never paid out in cash while employment continues. The prima vacacional is at least 25% of the vacation pay; up to 15 UMA a calendar year (MXN$1,759.65 in 2026) is exempt from ISR. In common practice, the SBC integration factor rises at each anniversary that adds vacation days. At termination, unused days and proportional days for the current year are paid with their premium.

On a spreadsheet, each of those changes depends on someone noticing every worker's anniversary across every client. A payroll system such as Flux that tracks those anniversaries lets the payroll team review the resulting figures instead of recalculating them by hand.