Mexico
Available
hours/week
See how hiring works in Mexico
Learn about local payroll, taxes, and employment laws in Netherlands
Minimum Wage Standards
The minimum wage in Mexico is MXN 278.80 per day for the general zone. For the northern border free zone, the minimum wage is MXN 419.88 per day.
Mexico's minimum wage is reviewed and adjusted annually by the National Minimum Wage Commission (CONASAMI). The northern border zone receives a higher minimum wage to remain competitive with wages across the US border.
Income Tax Structure
The individual income tax is progressive, ranging from 1.92% to 35% across 11 brackets. Income tax is calculated on annual taxable income after applicable deductions.
| Annual Taxable Income (MXN) | Tax Rate |
|---|---|
| Up to 8,952.49 | 1.92% |
| 8,952.50 - 75,984.55 | 6.40% |
| 75,984.56 - 133,536.07 | 10.88% |
| 133,536.08 - 155,229.80 | 16.00% |
| 155,229.81 - 185,852.57 | 17.92% |
| 185,852.58 - 374,837.88 | 21.36% |
| 374,837.89 - 590,795.99 | 23.52% |
| 590,796.00 - 1,127,926.84 | 30.00% |
| 1,127,926.85 - 1,503,902.46 | 32.00% |
| 1,503,902.47 - 4,511,707.37 | 34.00% |
| Over 4,511,707.37 | 35.00% |
Employer Contributions
Total employer contributions amount to approximately 36-45% on top of the base salary, depending on the state and risk classification of the business.
Mandatory Contributions:
- IMSS (Social Security): Includes sickness and maternity, disability and life, retirement, daycare, and work risk insurance
- INFONAVIT (Housing Fund): 5% of base salary
- State Payroll Tax: 1-4% depending on the state
- Aguinaldo (Christmas Bonus): Minimum 15 days of salary, paid by December 20
- Vacation Premium: 25% of wages earned during vacation days
- Profit Sharing (PTU): 10% of the company's taxable income distributed to employees
Important Note: These figures are estimates for informational purposes. Actual costs vary based on employment terms, state of operation, and risk classification. Contact our team for accurate calculations tailored to your situation.
Overtime & Working Hours
The standard work schedule is 8 hours per day, 48 hours per week. Employees may work a maximum of 9 hours of overtime per week, compensated at 200% of the regular hourly rate.
Any overtime beyond the 9-hour weekly limit must be compensated at 300% of the regular hourly rate. Employers are required to keep accurate records of all overtime worked.
Maternity Leave
Female employees are entitled to 12 weeks of maternity leave in total: 6 weeks before the expected date of delivery and 6 weeks after. At the employee's request and with medical authorization, up to 4 weeks of the prenatal leave may be transferred to the postnatal period (resulting in a 4+8 split).
Maternity leave is paid at 100% of the employee's salary by IMSS (Social Security). In cases where the employee is unable to work following maternity leave, an extension of up to 60 days may be granted at 50% pay.
Paternity Leave
Fathers are entitled to 5 working days of paid paternity leave at 100% of their salary. This leave is taken following the birth of their child.
Sick Leave
When an employee is unable to work due to illness, IMSS provides coverage starting from the 4th day of incapacity. IMSS pays 60% of the employee's registered salary for up to 52 weeks.
In cases of prolonged illness, the coverage period may be extended up to 78 weeks. The first 3 days of sick leave are not covered by IMSS, though some employers choose to cover this gap voluntarily.
Bereavement Leave
Bereavement leave is not mandated by Mexican federal labor law. However, many employers provide bereavement leave as part of their internal policies or collective bargaining agreements.
Termination Framework
There is no at-will termination in Mexico. Employers must have just cause to terminate an employee. The burden of proof lies with the employer in any labor dispute.
Valid grounds for termination with just cause include:
- Dishonesty or acts of fraud by the employee
- Violence, threats, or insults against the employer, coworkers, or their families
- Intentional damage to company property or equipment
- Negligence causing serious harm to the workplace
- Intoxication or drug use at work (unless due to a medical condition)
- Immoral acts committed in the workplace
- Revealing trade secrets or confidential information
- More than 3 unexcused absences within a 30-day period
Legal Requirement: Termination for just cause must be documented in writing and delivered to the employee directly or through the labor court. If the employer fails to prove just cause, the termination is considered unjustified and full severance must be paid.
Notice Period Requirements
Mexican federal labor law does not mandate a specific notice period for termination by the employer. However, employees who resign typically provide 15 days of notice as a professional courtesy.
When terminating for just cause, the employer must provide written notice specifying the conduct or grounds for dismissal at the time of termination.
Severance Compensation
When an employee is terminated without just cause, they are entitled to the following severance package:
- Constitutional indemnity: 3 months of integrated salary
- Seniority premium: 20 days of salary per year of service
- Seniority bonus: 12 days of salary per year of service, capped at twice the minimum wage
Additionally, employees are entitled to any accrued but unpaid benefits including proportional Aguinaldo, proportional vacation days, vacation premium, and any other outstanding compensation.
Probation Period: Mexico allows probation periods of up to 30 days for general positions and up to 180 days for management or specialized technical roles. During probation, either party may terminate the relationship if the employee is found unsuitable, subject to payment of accrued benefits.
Paid Annual Leave
Employees are entitled to a minimum of 12 working days of paid annual leave after completing their first year of service. This entitlement increases by 2 days for each subsequent year of service up to the 6th year.
After the 6th year, annual leave increases by 2 additional days for every 5 years of service. Employees also receive a vacation premium of 25% on top of their wages earned during vacation days.
Public Holidays
Mexico observes 7 mandatory statutory public holidays annually. Employees who are required to work on these days must be paid triple their regular daily wage.
Mandatory public holidays include:
- New Year's Day (January 1)
- Constitution Day (First Monday of February)
- Benito Juarez's Birthday (Third Monday of March)
- Labor Day (May 1)
- Independence Day (September 16)
- Revolution Day (Third Monday of November)
- Christmas Day (December 25)
Onboarding Timeline
The onboarding process is typically completed within 2-5 business days following client execution of the Statement of Work.
Compensation Structure
Salaries in Mexico are typically paid on a biweekly basis. Employers are required to provide an Aguinaldo (Christmas bonus) equivalent to a minimum of 15 days' salary, which must be paid by December 20 of each year.
Employees are also entitled to a vacation premium of 25% of their wages earned during their annual vacation period. This premium must be paid before the employee begins their vacation leave.
Employment Contract Specifications
Written employment contracts are mandatory in Mexico and must be drafted in Spanish. Both parties must retain a copy of the signed agreement. Failure to provide a written contract does not invalidate the employment relationship; the employer bears the burden of proof for all agreed terms.
Essential contract elements include:
- Full name, nationality, and address of employee and employer
- Job description and duties
- Workplace location
- Compensation and payment terms
- Work schedule and hours
- Vacation days and entitlements
- Start date of the employment relationship
Fixed-term contracts are only permitted for specific temporary needs such as seasonal work or replacing an absent employee. Indefinite-term contracts are the standard form of employment.
Probationary Period
Probation periods are permitted for up to 30 days for general positions. For management, executive, or specialized technical roles, the probation period may extend up to 180 days.
During the probation period, if the employee is deemed unsuitable for the role, the employer may terminate the relationship without incurring severance obligations, provided all accrued benefits (proportional Aguinaldo, vacation, vacation premium) are paid in full.
How it works
Your Global Hiring Process
We take care of employing your team, so you can focus on growing
You choose the talent
You select the candidate you want to hire, anywhere in the world.
We employ them for you
MB Remote becomes the legal employer and handles contracts, payroll, and local labor laws.
Your team starts working
Your employee works directly with you, just like an in-house team member.
We manage compliance
We ensure ongoing payroll, taxes, and legal compliance in the employee’s country.
Frequently Asked Questions
These are the most commonly asked questions about the Employer of Record
Can’t find what you’re looking for? Get in touch with an expert
Is it free to contact MB Remote?
Yes. Contacting us is completely free and without obligation. We’ll discuss your needs and explain how our EOR solution works before anything else.
How long does it take to hire an employee?
Hiring can usually be completed within a few days, depending on the country and local requirements.
What is an Employer of Record (EOR)?
An Employer of Record is a legal entity that employs workers on your behalf. MB Remote handles contracts, payroll, taxes, and local labor law compliance, while you manage the day-to-day work.
Who is the legal employer of the employee?
MB Remote is the legal employer, but the employee works exclusively for you as part of your team.
In which countries can you hire employees?
We support hiring in multiple countries. Contact us to check availability for a specific location.
How does payroll work?
We manage payroll, taxes, and social contributions in compliance with local regulations. You receive one simple monthly invoice.
Is my company still in control of the employee?
Yes. You manage tasks, schedules, and performance. We handle the legal and administrative side.