Glossary · 2 min read
What is a labor severance payment (liquidación)
Short answer
Severance pay (liquidación) is what is paid when the company ends the employment relationship without just cause. It includes the final settlement plus the compensation.
What it usually includes
- Three months of integrated salary.
- Seniority premium of 12 days per year, with a cap.
- In certain cases, 20 days per year.
- Everything in the final settlement.
Where working hours come in
If overtime is also claimed, the company must prove the workday.
Why everything starts with the working-time record
Almost every labor calculation starts from the same data point: how many hours and which days each person worked. If that data is uncertain, so is everything else.
- Overtime: it is paid according to the hours of each week.
- Sunday premium and rest days worked: they depend on which days were worked.
- Aguinaldo and profit sharing: they use the days worked in the year.
- Labor lawsuits: the company must prove the working time.
Since 2026, the Federal Labor Law requires that record to be electronic, per person, with start and end time.
Common mistakes
- Using the UMA or minimum wage value from a previous year.
- Confusing daily salary, integrated salary and contribution base salary.
- Calculating benefits without knowing the days actually worked.
- Taking the legal minimums as if they were the maximum.
- Not keeping the backup of the calculation.
What to do now
- Confirm the current value for the year.
- Have each person's daily salary at hand.
- Check the days and hours worked in your record.
- Do the math and keep it.
- Validate it with your accountant.
Related terms
What is PROFEDET. PROFEDET is the Federal Labor Defense Attorney's Office (Procuraduría Federal de la Defensa del Trabajo).
What are the internal work regulations. The internal work regulations are the document with the mandatory rules inside the company: schedules, breaks, pay days and disciplinary measures.
What is the seventh day (séptimo día). The seventh day is the paid rest day, at full salary, that every person is entitled to for every six days worked.
Frequently asked questions
Who calculates the amount?
Your labor lawyer, based on the integrated salary and seniority.
Where does the data come from?
From the Federal Labor Law and from the official values published by INEGI and the National Minimum Wage Commission.
Do these values change every year?
Yes. The UMA is updated every February 1 and the minimum wage every January 1. Always confirm the current value.
Are the amounts gross or net?
Gross. They do not account for taxes or social security contributions.
Can I use this for my payroll?
It works as a reference. Your accountant should do or validate the payroll calculation.
Legal basis and sources
- Benefits: articles 76 to 80, 87 and 117 to 131 of the LFT.
- Decree amending the Federal Labor Law on the reduction of the working week. Official Gazette of the Federation, May 1, 2026.
- Federal Labor Law, current text. Chamber of Deputies.
How we write this content. The Sicheca team writes it from the official text of the law. When something is not yet defined by the authority, we say so. It is general information and does not replace the advice of a lawyer or an accountant.