Annual Christmastime questions

I have overpaid and underpaid over the years but would really like to know the real formula for aguinaldo for part time employees. My house cleaner works about 3-3 1/2 hours a week and has worked here for more than a few years. The gardener who works an hour a week with his own equipment has worked just for a year. How much vacation should each get. Thanks for your input. I’d like to get it right this time.

I believe if the gardener has his own equipment and is self directed he would be considered "self employed" however I would give it to him anyways. I'm not sure of the exact formula but I give my helpers 4 weeks pay along with a raise every year.

This is still correct thanks to Rolly, may he rest in peace!

Don't forget the Vacation Pay....for my gardener it adds to more than the Aguinaldo.

Aguinaldo (Christmas Bonus)

The aguinaldo must be paid on or before the 20th of December.   The aguinaldo must be paid in cash; gifts, Christmas baskets, and other presents do not fulfill the requirement.

The aguinaldo must equal 15 days of salary.   To calculate the amount for a part-time employee, divide the number of days worked during the year past by 365. Multiply that figure by 15 x the daily salary to determine the amount of the aguinaldo.

Examples:

If you have an employee who works one day a week for $50 pesos:
52/365 x 15 x 50 = $106.85 pesos

If the worker is paid by the week and has worked a full year, use a multiplier of 2.14 to make the math easier.  If the worker is paid $500 pesos per week, then it is $500 x 2 .14 = $1070 pesos

If the weekly worker has not worked a full year, divide the number of weeks worked by 52.14 x 15 x the daily salary (weekly salary divided by 7) to determine the amount of the aguinaldo.

Vacación (Vacation)

The vacación must be paid in cash, either before the vacation or before the end of the year if no vacation has been taken.

The vacación pay must equal required number of vacation days of salary plus and additional 25% of the amount. To calculate the amount, divide the number of days worked during the year past by 365.  Multiply that figure by number of vacation days times 1.25 to determine the amount of the vacación pay due.

Examples:

If you have an employee for one year who works one day a week for $50 pesos:
52/365 x 6 x 1.25 x 50 = $53.42 pesos = vacación

If the worker is paid $500 pesos per week, convert the weekly rate to a daily rate by dividing by 7.

500/7 x 6 x 1.25  = $535 pesos = vacación

Note:  The 6-day minimum vacation is only for the first year worked.  The basis increases by 2 days each year through the 4th year.  The 5th year it increases 2 days to 14 days.  Thereafter, the time increases by 2 days each 5th year.

For example:  A maid has worked for 5 years, so she is due 14 days vacation.  She works 3 days per week for $760 per week. which is $253.33 per day.  3 x 52 = 156 days worked per year.

156/365 x 14 x 1.25 x 253.33 = $2642.71

If we ignore that she works only 3 days and consider her a weekly employee, then

760/7 x 14 x 1.25 = $1900

Year 1 -- 6 days
Year 2 -- 6 + 2 = 8 days
Year 3 -- 8 + 2 = 10 days
Year 4 -- 10 + 2 = 12 days
Year 5 -- 12 + 2 = 14 days
Year 10 -- 14 + 2 = 16 days
Year 15 -- 16 + 2 = 18 days
etc

I didn’t realize Rolly had died.

Sorry, but I’m having a math moment. Is this right for the aguinaldo for the cleaning lady. She worked 52 days last year for 350 pesos. I’m coming up with a rounded up figure of 748 pesos. That seems like not nearly enough.

I use the short-cut method of weekly pay multiplied by 2.14.

If 350 is her weekly pay, the formula I used is:

350 x 2.14 = 749

Oh, thank you so much, BisbeeGal. I’ll give her 1000 or more. Now do you have a shortcut for vacation assuming she qualifies for 14 days? I want to get this right.

I do the same as CanuckBob. My gardener has been with us for about 6 years. He comes twice a week for about 2 hours each time. We give him an extra months salary and a raise each year. This seems the easiest way to handle this and we are both happy. We have already paid him this year so he will have some early Christmas money to spend.

For vacation for 14 days worker (5 years)

350/7 = 50 x 14 x 1.25 = 875 pesos

Carry Bean wrote:Oh, thank you so much, BisbeeGal. I’ll give her 1000 or more.  Now do you have a shortcut for vacation assuming she qualifies for 14 days?  I want to get this right.

Yes, your aguinaldo calculation is correct. I'm not sure what "it doesn't seem like nearly enough" means, if you say you never knew the formula and just paid whatever before. The aguinaldo works out to approximately 2 weeks pay. She works for you twice in two weeks, so gets paid 700 pesos for 2 weeks. I also don't know why you feel you need to give her 1000 pesos. I understand being generous, but when employers pay more than required for mandated payments, it can give employees the idea that they should get more from everyone. I assume she has other clients if she only works for you one day a week. If you want to give more, I would not give it as part of the aguinaldo, but as a little extra bonus. For instance, if the total of aguinaldo plus vacation pay comes to 1150 pesos, you might want to just give her 1200, but make sure she is aware of the actual mandated payment amount.

For the vacation pay, just follow the formula. There isn't any "shortcut", as far as I'm aware.

You should also write up a receipt for your workers to sign to confirm they received these payments, showing the calculation. You may totally trust your employees, but when it comes to business, it's best to keep written records.

rafterbr wrote:  He comes twice a week for about 2 hours each time.  We give him an extra months salary and a raise each year.  This seems the easiest way to handle this and we are both happy.  

Easiest and best is not the same thing, no matter whether an employee "seems happy". You really should pay what is required according to the formula and have a receipt signed by the worker. I know a few people who got burnt by not doing this.

rafterbr wrote:I do the same as CanuckBob.  My gardener has been with us for about 6 years.  He comes twice a week for about 2 hours each time.  We give him an extra months salary and a raise each year.  This seems the easiest way to handle this and we are both happy.  We have already paid him this year so he will have some early Christmas money to spend.  

Fyi, the "years worked" factor for the vacaciones is DOUBLING next year.  

So for a 6 year employee, his vacation days will be 22 next year.  Add to that the 15 days of aguinaldo and it's more than a month's pay.  

Better to follow the law; the jardineros here have a strong guild in Chapala and do sue if someone underpays.  You've been overpaying, so to your jardinero, no harm no foul.  But next year---he will be looking for the correct amount.

These start Jan. 1, 2023, per Sonia Diaz's site.

Year 1 = 12 days  
Year 2 = 14 days    
Year 3 = 16 days    
Year 4 = 18 days    
Year 5 = 20 days    
Year 6 to 10 = 22 days
Year 11 to 15 = 24 days  
Year 16 to 20 = 26 days

mudgirl wrote:

rafterbr wrote:  He comes twice a week for about 2 hours each time.  We give him an extra months salary and a raise each year.  This seems the easiest way to handle this and we are both happy.   

Easiest and best is not the same thing, no matter whether an employee "seems happy". You really should pay what is required according to the formula and have a receipt signed by the worker. I know a few people who got burnt by not doing this.

Correct!!

We have him sign for both payments.

We also give his family a large Christmas decorated cake (he has young kid). And we give him a separate personal card of thanks with pesos that represents another 2+ weeks pay.

@carry bean, in case you missed my edited post.

For vacation for 14 days threshold worker

350/7 = 50 x 14 x 1.25 = 875 pesos

Thank you all so much.

BisbeeGal wrote:

We have him sign for both payments.  

We also give his family a large Christmas decorated cake (he has young kid).  And we give him a separate personal card of thanks with pesos that represents another 2+ weeks pay.  

That's a perfect way to do it. The worker has confirmed that they were paid what is mandated by law if there is ever any contention, and anything extra you want to give is obviously you being generous and appreciative. The two things should be kept separate.

I stand corrected. We give 5 weeks pay, not 4, as I stated above.

Easiest calculation for aguinaldo is pay per week time 2.14. EZPZ