Paid Time Off

Mexico PTO Compliance: A Guide for Employers

Paid Time Off (PTO) in Mexico is regulated by the Federal Labor Law (Ley Federal del Trabajo). The law sets clear minimums for vacation days, paid holidays, and other leave entitlements. Understanding these requirements is essential to remain compliant and support employee well-being.

Mexico pto compliance

Understanding PTO Requirements in Mexico

Get a quick overview of key vacation and leave regulations.

Statutory Vacation Days

As of 2023, Mexican employees are entitled to a minimum of 12 paid vacation days after one year of service. This increases by 2 days for every additional year of service, up to 20 days, and then by 2 days every 5 years. Employees are also entitled to a vacation bonus of at least 25% of their salary during time off.

Sick Leave Regulations

Sick leave in Mexico is covered by the Mexican Social Security Institute (IMSS). Employees must present a valid medical certificate to qualify. Starting on day 4 of illness, IMSS provides 60% of the employee’s salary for up to 52 weeks, depending on the condition.

Public Holidays

Mexico recognizes official federal public holidays, such as New Year’s Day, Independence Day, and Constitution Day. These are paid non-working days. If employees work on a holiday, they must be paid triple their daily wage for that day.

PTO Carryover Rules

There is no legal obligation to allow vacation days to roll over, but most employers offer some carryover flexibility by agreement. Best practice is to ensure employees use their days within 6 months after the anniversary of their entitlement.

Mexican Paid Time Off Overview

Key Considerations For Employees And Employers

Mexico’s labor law protects workers’ right to time off while requiring companies to manage it responsibly.

Employers

Grant at least 12 paid vacation days after 1 year of service
Apply the vacation bonus of 25% or more
Observe all mandatory public holidays
Use proper tracking for vacation and sick days
Pro-rate leave for part-time staff

Employees

Earn 12 vacation days after your first year
Receive a vacation premium during paid leave
Present a doctor’s note for paid sick leave through IMSS
Get triple pay if working on a public holiday
Use your vacation time within 6 months of eligibility

Mexican PTO policies are governed by the Federal Labor Law. This guide is for general information only. For legal guidance, consult a qualified professional.

pto management

Best Practices for Managing PTO in Mexico

Here’s how to streamline leave management and stay compliant.

Leave Management System
A digital attendance or PTO tracking system can help ensure compliance with vacation accrual, sick leave policies, and bonus calculations. It also minimizes admin work and ensures consistent enforcement of internal policies.
Clear PTO Policies
Define PTO rules clearly for employees—how vacation is accrued, how to request time off, how holiday pay works, and what happens with unused days. This helps prevent misunderstandings and legal issues.
Part-Time Considerations
Part-time and temporary workers are also entitled to pro-rated vacation time. Ensuring accurate calculations for these employees is essential for legal compliance and fairness.

attendance tracking

Why Compliance Matters

Complying with Mexican PTO laws ensures you're meeting legal obligations—while also supporting a healthy, motivated workforce.

Keep a Clean Record

Failing to follow Mexico’s Federal Labor Law can lead to government inspections, penalties, or legal disputes that harm your company’s reputation. By accurately managing paid vacation, holidays, and bonuses, you reduce risk and maintain clear records for audits or internal reviews.

Employee Satisfaction

Providing clear and fair PTO policies—like honoring the vacation bonus or observing public holidays—helps employees feel valued. This leads to greater satisfaction, reduced absenteeism, and better performance across your team.

Positive Workspace

Transparent PTO practices build trust. When employees know they can take the time off they’ve earned—without fear or confusion—it creates a culture of respect, openness, and well-being. This is especially important in high-demand work environments.

employee attendance

How TrackingTime Can Help

Learn more about how we can help you optimize your PTO policies and ensure compliance with Mexican labor laws.

Effortless Organization

Say goodbye to messy email chains and manual tracking. With a streamlined PTO management system, you can keep all requests and records in one place, making it easy to approve time off and manage employee schedules efficiently.

Quick Approvals – Manage PTO requests fast.
Clear Records – Access all time-off data easily.
Team Sync – Keep schedules aligned effortlessly.

Custom Time-Off Policies

Every company has unique needs, and your PTO policies should reflect that. Customize your time-off rules to match your team’s structure, ensuring fairness and clarity while maintaining flexibility.

Flexible Rules – Tailor policies to your team’s needs.
Clear Guidelines – Keep everyone informed.
Smooth Management – Set rules that work for all.

Real-Time Transparency

Give your employees the confidence to plan their time off without uncertainty. By providing real-time access to balances and request statuses, you create a more transparent and trusting workplace.

Instant Access – Check balances anytime.
Live Updates – Track requests in real time.
Boost Trust – Keep everyone informed.

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FAQ

Frequently Asked Questions

Get answers to all your questions about our service and plans.

How many vacation days are workers entitled to in Mexico?

As of the 2023 reform, employees in Mexico are entitled to a minimum of 12 paid vacation days after one year of service. This increases by two days per year until the sixth year, then every five years.

Is paid vacation mandatory in Mexico?

Yes. Paid vacation is a mandatory benefit under Mexico’s Federal Labor Law (Ley Federal del Trabajo). Employers must grant and compensate vacation as per legal timelines.

What law governs vacation leave in Mexico?

Vacation entitlements are defined in the Federal Labor Law (LFT), which regulates working hours, rest periods, and mandatory benefits including paid time off and bonuses.

Does vacation in Mexico include national holidays?

No. National holidays are separate from vacation days. If a public holiday falls during a vacation, it does not reduce the employee’s vacation day count.

Do vacation days expire in Mexico?

Yes. Vacation days expire one year after the date they are granted if not used, though many employers provide grace periods or allow carryover by internal policy.

What is the vacation premium in Mexico?

The law requires a minimum 25% vacation premium, meaning workers receive their regular salary plus an extra 25% during vacation. Some companies offer even higher rates.

Can vacation days be paid out in Mexico?

Vacation days can only be paid in cash when the employee is terminated or resigns. Otherwise, paid time off must be taken as rest time, not as a cash payout.

Do part-time employees get vacation in Mexico?

Yes. All employees under an employment contract—regardless of hours worked—are entitled to paid vacation days proportionate to their time and service.

Are employees entitled to vacation from the first year?

Yes. After completing one full year of continuous work, employees receive their first set of 12 paid vacation days and the corresponding vacation premium.

Do vacation rights apply during maternity or sick leave in Mexico?

Yes. Vacation entitlements continue to accrue during legally protected absences like maternity or illness, and employees retain the right to use them afterward.

Can Mexican employers decide when employees take vacation?

Yes, but employers must allow employees to take their leave within six months of earning it. Scheduling should consider both operational needs and employee preferences.

Are companies in Mexico required to track vacation usage?

Yes. Employers must document accrued, taken, and remaining vacation days to comply with labor inspections and ensure correct payment of benefits like the vacation premium.

Can companies offer more vacation than the law requires in Mexico?

Yes. Many employers offer additional vacation days as part of competitive benefits packages. These extra days should be clearly documented in contracts or internal policies.

Should paid leave policies be included in employment contracts in Mexico?

Yes. It is strongly recommended that vacation entitlements, scheduling procedures, and premium rates be outlined in writing to protect both employer and employee rights.

Is vacation tracked on a calendar year in Mexico?

No. Vacation in Mexico is calculated based on the employee’s work anniversary date, not the calendar year. The accrual and usage periods are tied to the employment start date.