Aguinaldo and IMSS Explained for US Employers
Aguinaldo is a mandatory year-end bonus of at least 15 days of salary, payable by 20 December. IMSS is Mexico's social security institute, and employer contributions to it fund healthcare, disability, and related coverage. Together with INFONAVIT housing contributions, retirement savings, vacation premium, and state payroll tax, these obligations add roughly 25 to 35 percent on top of base salary.
The obligations at a glance
| Obligation | What it is | Who pays |
|---|---|---|
| IMSS | Social security covering healthcare, disability, and work risk | Employer and employee, employer share is larger |
| INFONAVIT | National housing fund contributions | Employer |
| SAR retirement | Retirement savings contributions | Employer |
| Aguinaldo | Year-end bonus, legal minimum 15 days of salary | Employer |
| Vacation premium | A premium of at least 25 percent on vacation pay | Employer |
| State payroll tax | Levied at state level, rate varies by state | Employer |
Aguinaldo in practice
Aguinaldo is not a discretionary bonus. It is a statutory entitlement of at least 15 days of salary, payable by 20 December each year, prorated for employees who joined partway through the year. Many employers pay above the minimum as a retention measure, but the minimum is a legal floor rather than a negotiating position.
IMSS in practice
IMSS registration is required from the first day of employment. It gives the employee access to public healthcare and disability coverage, and it is the clearest external evidence that an employment relationship is being handled properly. An arrangement where nobody is registered with IMSS is a signal worth investigating.
Vacation entitlement
Mexico increased statutory vacation entitlement in 2023. Employees are entitled to 12 days of paid vacation after their first year, rising with tenure, plus a vacation premium of at least 25 percent of the salary due for those days. US buyers who budget on the older, lower entitlement will understate the cost of the seat.
Profit sharing
Mexican law includes a statutory profit sharing obligation known as PTU, which applies to employers that generate taxable profit. Whether and how it applies depends on the employing entity, so it is a question to raise directly with any provider quoting you a rate.
What to ask a provider
- Is the quoted monthly figure inclusive of every statutory contribution and benefit?
- Is the employee registered with IMSS from day one, and can that be evidenced?
- How is aguinaldo funded, monthly accrual or a December charge?
- How is vacation and vacation premium accounted for in the rate?
- Who carries the liability if a labor authority challenges the arrangement?
This is general information about how Mexican employment obligations work, not legal or tax advice. Specific arrangements should be reviewed with a qualified adviser.
Frequently asked questions
When is aguinaldo due?
By 20 December each year, at a legal minimum of 15 days of salary, prorated for partial years of service.
Does IMSS replace private health insurance?
IMSS provides public healthcare coverage. Some employers add private cover as a retention benefit, but it is optional rather than statutory.
Are these costs included in a Cruithunt quote?
Yes. Cruithunt quotes a single all-inclusive monthly figure per seat that covers salary, statutory employer cost, and management.
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