Hire employees and contractors in Mexico

Remote’s guide to employing in Mexico.

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  • Capital city

    Mexico City

  • Currency

    Mexican peso
    ($, MXN)

  • Population size

    128,649,565
    (2020 est.)

  • Languages spoken

    Spanish

  • Availability

    Remote-Owned Local Entity

    We own our own entity in the countries where we operate to shield your company from risk and provide you and your employees with the signature Remote experience.

Facts & Stats

Mexico (Spanish: México), officially the United Mexican States (Spanish: Estados Unidos Mexicanos), is a country in the southern portion of North America. It has the world's 15th-largest economy by nominal GDP and the 11th-largest by PPP, with the United States being its largest economic partner. The large economy, area, population and politics make Mexico a regional power and a middle power, and is often identified as an emerging power.

  • Capital city

    Mexico City

  • Currency

    Mexican peso
    ($, MXN)

  • Languages spoken

    Spanish

  • Population size

    128,649,565 (2020 est.)

  • Ease of doing business

    Easy

  • Cost of living index

    $$ (100 of 139 nations)

  • Payroll frequency

    Semi-monthly

  • VAT - standard rate

    16%

  • GDP - real growth rate

    1.994% (2018 est.)

Grow your team in Mexico with Remote

Employing in Mexico requires employers to own a legal entity in the country and manage payroll, tax, benefits and compliance through their own in-country resources. The complexity and intricacies of employment regulations in Mexico makes full compliance with employment laws a burdensome process.

Through Remote’s Global Employer of Record solution, your team is employed by our local legal entities in each country, and we take care of payroll, tax, benefits and compliance so you can focus on what matters most -- your people.

Risks
of misclassification

Mexico, like many other countries, treats self-employed individuals or contractors and full-time workers differently and there are risks associated with misclassification.

Employing in Mexico

Mexican employment law and employment rights are contained under the Constitution of the United Mexican States (Constitución Política de los Estados Unidos Mexicanos) as well as Federal Labour Law. The employment rights provided in these can apply to anyone providing subordinated services. Employment rights in Mexico are also inalienable, meaning that they apply to everyone deemed to carry out suborindated work in Mexico, regardless of the jurisdiction chosen in employment agreements.

Federal Labour Law and Mexican labour courts are very employee-protective and favours the employee. As such, Mexican employment law provides strong labor conditions and protections for employees, so employing people will generally be an important investment and commitment.

Temporary agencies are popular options for more flexible workforce arrangements. For these and many other reasons, the following are only guidelines in the broadest sense, and professional legal services are recommended when employing in Mexico.

Public holidays

Below are national public holidays applicable for all regions in this country. Remote customers have access to a detailed list of regional public holidays within the Remote platform. Sign up now to access all public holiday information.

Minimum Wage

There are two types of minimum wages: a general minimum wage that applies to everyone regardless of age, industry and experience and a "professional" minimum wage that apply to certain employees depending on their profession, craft or activity.

For the general minimum wage, there are two categories

  • MXN 185.56 for the 432 municipalities that integrate the "Free zone of the Northern Frontier"; and
  • MXN 123.22 for the rest of the country.

Payroll Cycle

For customers of Remote, all employee payments will be made in semi-monthly installments by the 15th and 30th of each month.

Onboarding Time

We can help you get a new employee started in Mexico fast. The minimum onboarding time we need is only 3 working days.

Our team ensures your employees are onboarded and paid as quickly as possible while keeping your business compliant with all local employment legislation. The minimum onboarding time begins after the employee submits all required information onto the Remote platform. The onboarding timeline is also dependent upon registration with local authorities.

For all non-nationals of the country of employment, the Right to Work assessment (if applicable) will add three extra days to the total time to onboard. There may be extra time required if we need to follow-up on the right to work assessment.

Please note, payroll cut-off dates can impact the actual first day of employment. Remote has a payroll cut-off date of the 10th of the month unless otherwise specified.

Competitive benefits package in Mexico

At Remote, we’re obsessed with helping you craft the best possible employee experience for your team. We are leading the way in practicing “fair equity,” which means making sure employees everywhere have access to both the required and supplemental benefits they need to thrive (and that will allow you to attract the best local talent).

Our benefits packages in Mexico are tailored to fulfill the local needs of your employees. Typically, our packages contain some or all of the following benefits:

  • Health Insurance
  • Dental Insurance
  • Vision Insurance
  • Mental Health Support
  • Pension or 401(K)
  • Life and Disability Insurance

Calculate the cost to hire an employee
in Mexico

Taxes in Mexico

Learn how employment taxes and statutory fees affect your payroll and your employees’ paychecks in Mexico.

  • Employer

    • 20.40% - Maternity & Illness (fixed quota)

    • 5% - Housing Fund

    • 3.15% - Seniority Insurance

    • 3% - State Payroll Tax maximum (depends on employee state and gross salary)

    • 2% - Retirement

    • 1.75% - Disability & Life Insurance

    • 1.10% - Maternity & Illness (extra quota)

    • 1.05% - Maternity & Illness - retired medical expenses quota

    • 1% - Daycare Insurance

    • 0.7% - Maternity & Illness - cash benefits quota

    • 0.54355% - Labor risk insurance

  • Employee

    • 1.13% - Seniority Insurance

    • 0.63% - Disability & Life Insurance

    • 0.40% - Maternity & Illness (extra quota)

    • 0.38% - Maternity & Illness - retired medical expenses quota

    • 0.25% - Maternity & Illness - Cash benefits quota

    • 1.92% - up to 6,942.35

    • 6.40% - 6,942.36 - 58,922.27

    • 10.88% - 58,922.28 - 103,550.51

    • 16.00% - 103,550.51 - 120,372.95

    • 17.92% - 120,372.96 - 144,119.39

    • 21.36% - 144,119,40 - 290,667.83

    • 23.52% - 290,667.84 - 458,132.39

    • 30.00% - 458,132.40 - 874,650.11

    • 32.00% - 874,650.12 - 1,166,200.07

    • 34.00% - 1,166,200.08 - 3,498,600.11

    • 35.00% - 3,498,600.12 and above

Types of leave

Statutory leave

Federal Labor Law in Mexico provides for a minimum vacation period that all employers must grant to their employees. The amount of minimum vacation days are dependent on the employee's lenght of service, as described below:

  • One year of service: 6 days
  • Two years of service: 8 days
  • Three years of service: 10 days
  • Four years of service: 12 days
  • After four years of service, each four years of further service result in holiday entitlement increasing by 2 days.

Pregnancy and maternity leave

Under the Federal Labor Law and the Social Security Law, pregnant employees can take up to 12 weeks of paid maternity leave of absence. 6 weeks can be taken before the birth and 6 weeks after, but on the request of the mother and authorisation by the Mexican Social Security Institute (IMSS) up to 4 weeks of the 6 weeks can be moved to after the birth. Mothers are also entitled to additional rest breaks in the six months after the birth (the nursing period).

Paternal leave

Employees have an entitlement to five working days of paid paternity leave of absence in the case of birth or adoption of a child.

Other leave

  • Adoption: women are entitled to six weeks of paid maternity leave of absence after the date of adoption. Father are entitled to five days following the adoption of the child.

Employment termination

Termination process

Federal Labor Law provides a distinction between dismissal (Spanish: despido) and termination (Spanish: terminación). Dismissal can be justified by reasons related to the employee's conduct, while termination can be for economic reasons, employee's incapacity, force majeur, death of the employee or termination of the work. The two articles of Federal Labor Law of relevance are art. 47 on dismissal and art. 52 on termination.

Notice period

Employers and employees have no obligation to notify the other party in advance of a dismissal or resignation and notice obligations for employees are not recognized or enforceable under Mexican law. Notice obligations for employers can be enforced if they have been agreed to, but it is uncommon for Mexican employers to do so.

Probation periods

If the employment contract is for more than 180 days or for an indefinite period of time, the employer may put in place a probationary period of up to 30 days. It is possible to extend the probationary period by up to 180 days for managerial, technical or professional positions

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