MXN
Currency
Mexico City
Capital
127 million
Population
Spanish
Official language
What is an employer of record ?
As an Employer of Record (EOR) in Mexico, we act as the legal employer for your employees living in the country, handling all employment responsibilities and liabilities on your behalf. We manage everything end-to-end, including payroll, benefits, taxes, and compliance. By partnering with Workmate, you can hire employees in Mexico without the complexities of setting up a local entity or navigating intricate labor regulations.
Guide to hiring in Mexico
Explore the topics below to discover everything you need to know about hiring employees in Mexico
Payroll & Wage
Minimum wage
In 2024, the general minimum wage in Mexico is MXN 248.93 per day ($17 CAD), while in the Northern Border Free Zone it is MXN 374.89 per day ($26 CAD).
Overtime
In Mexico, employees working more than 48 hours per week receive 100% additional pay for overtime, with no set limit. Sunday work earns a 25% premium on regular wages. If Sunday hours push the total workweek beyond 48 hours, those Sunday hours are paid at 200% of the Sunday wage.
Social security
Monthly contributions:
Social security IMSS - MXN 643.71
Local tax - 3%
Surplus fee - 1.10%
Occupational risk - 0.50%
Retirement - 6.24%
Benefits for disabilities - 0.7%
Life insurance - 1.75%
Nursery and social benerits - 1%
Medical expenses - 1.05%
Infonavit - 5%
Other contributions:
Christmas bonus - 15 working days of wages for employees with one year of service, pro-rated for employees with less than 1 year of service
Vacation bonus: the employee should receive a vacation bonus equivalent to 25% of their base salary.
Profit sharing: 10% of the company's profit in the fiscal year distributed among eligible employees
Taxes
The individual income tax rate ranges from 1% to 35% and is calculated using a progressive system. Various factors can influence the final rate.
Leave entitlements
Vacation
In Mexico, employees receive 12 days of paid vacation after one year of service. Vacation days increase by 2 days each year, reaching 20 days by the fifth year.
Parental leaves
Maternity leave:
Pregnant employees in Mexico are entitled to 84 days of paid leave, starting 40 days before childbirth and continuing without breaks. They receive 100% of their average salary, paid by IMSS. After birth, employees can request nursing breaks for six months and may extend the leave unpaid if needed.
Paternatiy leave:
Employers in Mexico should grant working fathers 5 working days of paternity leave with pay for the birth of their children.
Sick leave
In Mexico, employees receive 12 days of paid vacation after one year of service. Vacation days increase by 2 days each year, reaching 20 days by the fifth year.
Holidays
In Mexico, employees receive 12 days of paid vacation after one year of service. Vacation days increase by 2 days each year, reaching 20 days by the fifth year.
Terminations
Notice period
In Mexico, there is no statutory notice period for dismissal. However, employers must provide written notice within 30 days of becoming aware of misconduct, clearly stating the reasons for the dismissal in certain cases.
Severance pay
Employees in Mexico terminated without cause are entitled to severance, which includes 90 days’ salary with benefits, 20 days’ salary per year of service, and a seniority premium of 12 days’ salary per year. This includes vacation pay, a Christmas bonus, and other accrued benefits. Employees may choose reinstatement instead of severance.
Other details
Employment agreements
Agreements or contracts must be in Spanish or bilingual. The following terms are required:
Probation period
Termination conditions
Ordinary or integral salary
Christmas bonus
Beneficiaries, according to article 25 of the Federal Labor Law.
Probation pediod
It is not mandatory to include a probation period in the employment contract. However, an employer can opt for a trial period of up to 180 days.