A final settlement is not one percentage. Start by identifying the legal termination route and seniority, then use the MTESS calculator. The calculator is useful because it separates unpaid salary, vacation, aguinaldo, notice, IPS and indemnity. It does not decide by itself whether the worker resigned, was dismissed with cause, was dismissed without cause, or left for a legally justified reason.
This guide addresses ordinary private employment under the Labor Code. Public employment, special regimes, fixed-term contracts and workers with special stability can require additional rules.
Classify the termination first
| Situation | Typical review | What does not follow automatically |
|---|---|---|
| Worker resigns voluntarily | Unpaid salary, accrued vacation, proportional aguinaldo; also check whether the worker gave the required notice | Ordinary unjustified-dismissal indemnity |
| Employer dismisses without just cause | Unpaid salary, vacation and aguinaldo, plus indemnity and notice pay where notice was omitted | The calculator output does not prove the legal ground |
| Employer dismisses for just cause | Unpaid salary, accrued vacation and proportional aguinaldo still need separate review | Indemnity and notice are not due merely because employment ended |
| Worker terminates for a statutory just cause | Article 85 points to indemnities equivalent to unjustified dismissal and lack of notice | The alleged just cause must actually satisfy the statutory test |
The file should therefore show who ended the relationship, when, and on what stated ground. A dismissal letter, resignation, email or documented incident can matter more than the first total shown by a calculator.
Notice periods for an indefinite contract
Labor Code Article 87 uses the following seniority bands:
| Continuous service | Notice period |
|---|---|
| After probation through 1 year | 30 days |
| More than 1 through 5 years | 45 days |
| More than 5 through 10 years | 60 days |
| More than 10 years | 90 days |
If the employer omits required notice, Article 90 generally requires payment equivalent to salary for the notice period. If the worker omits required notice, the same article generally provides for payment to the employer equal to one half of the salary corresponding to the omitted notice. Whether this rule applies to the particular case still depends on contract type and termination ground.
Indemnity for unjustified dismissal
For an ordinary unjustified dismissal, Article 91 sets indemnity at 15 daily wages for each service year, applying the statutory six-month-fraction rule. Article 92 uses the average wages earned during the final six months as the indemnity base, or the shorter period actually worked if the contract lasted less than six months.
A useful structure is:
Indemnity days = 15 × service years counted under the statutory fraction rule.
Use the MTESS calculator to apply daily value and seniority to the actual file, especially where pay varies.
At ten years, stop using the ordinary shortcut
A worker who completes ten continuous years with the same employer acquires special stability under Article 94. Dismissal is then not simply an ordinary “15 days per year” case. The Code creates a special route for dismissal based on alleged just cause, and where that cause is not proved, reinstatement and other consequences can arise; in defined situations the law provides for double indemnity.
Practical rule: at ten continuous years or more, do not rely only on the standard calculator output. The stability regime deserves a separate legal review.
Check the settlement components separately
- Unpaid salary. Determine unpaid days or pay periods from payroll and attendance records.
- Aguinaldo. If employment ends before year-end, Labor Code Article 243 requires review of the proportional aguinaldo accrued to that date.
- Accrued unused vacation. If the contract ends before accrued vacation has been used, Article 221 requires cash compensation and contains a special consequence when dismissal occurs after the statutory vacation-use period.
- Proportional vacation before a completed service year. Article 221 expressly provides this where the contract ends before the year for a cause attributable to the employer. Do not automatically add it to every voluntary resignation.
- Notice. Apply it only where contract type, termination ground and actual notice facts trigger it.
- Indemnity. Apply only the indemnity supported by the actual ground and stability regime.
- IPS. Reconcile any IPS field shown by the calculator with payroll and contribution records.
Worked example: three years, unjustified dismissal, no notice
Suppose an ordinary indefinite-contract employee with exactly three continuous years is dismissed immediately without just cause. In addition to unpaid salary, aguinaldo and vacation, two components require attention:
- Notice: more than one through five years carries a 45-day notice period; if omitted completely, the corresponding payment must be reviewed.
- Indemnity: three counted service years produce 45 daily wages of indemnity under the basic formula, using the statutory wage base.
The example is intentionally simple. Variable pay, disputed cause, a six-month fraction, a special contract or ten years of service changes the analysis.
The MTESS calculator is a checking tool, not a judgment
Have these records ready:
- entry and exit dates;
- the termination ground and written notice supporting it;
- payroll records, especially the final six months;
- unpaid days;
- vacation history;
- notice actually given or omitted;
- aguinaldo already paid;
- IPS records.
Article 93 also requires the employer to provide a free employment certificate at termination stating at least the start and end dates, type of work and wages in the last pay period. At the worker's request it also states performance and the reason for termination.
The reliable order is therefore: termination ground → seniority → unpaid payroll items → notice → indemnity → special regimes. Only then does the total become meaningful.