Country Guides

Mexico

Quick Find

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Capital

Mexico City

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Language

Spanish

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Remote workers

8% in 2020

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Currency

mx$ Mexican peso (MXN)

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Working hours

40-48 hours per week

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Public holidays

8 days per year

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Minimum daily salary

MXN 315.04 - 440.87

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Tax year

Jan 1 - Dec 31

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Date format

DD/MM/YYYY

Misclassification penalties

MXN 192,440.00 - 4,811,000.00 (approx. EUR 9155.81 - 228 895)

Fun fact

69 different languages are spoken in Mexico

Employer contributions

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    Employer tax: 39.69%-46.72%
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    Social Security: 26.54%-33.58%
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    Retirement: 5.15%
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    National housing fund: 5%
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    Payroll: 3%

Employee contributions

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    Employee tax: 4.7%-37.7%
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    Social Security: 1.65%
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    Retirement: 1.1%
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    Income tax: 1.92% - 35%

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Employer of Record in Mexico

What is an EOR?

An Employer of Record is the legal employer of a worker in Mexico. As such, the Employer of Record takes care of all Mexico compliance aspects of employment, including payroll, taxes, statutory benefits, employment contracts and more.

EOR responsibilities

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    Ensuring their employment is compliant with local employment laws
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    Processing local payroll
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    Filing employment related taxes and returns
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    Issuing payslips to the employee
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    Distributing salary payments

How it works

  • Company

    Maintains a direct relationship with the employee, allocates them work tasks, and manages their performance.

  • Boundless

    Takes care of payroll, taxes, benefits, ensuring the employee and the company are compliant with all legal regulations.

  • Employee

    The third party to the agreement, the employee, fulfils all of their obligations as a worker for the company.

Statutory benefits in Mexico

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    Pension
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    Holiday entitlement
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    Vacation and Christmas bonus
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    Occupational accident and risks
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    Sickness and maternity
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    Old age insurance
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    Day care

Common non-mandatory benefits in Mexico

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    Option to WFH

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    Paid relocation
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    Life insurance
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    Major medical expense insurance
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    Private medical insurance
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Employment agreement

payments

Payslip

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Remote work

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Right to disconnect

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Protection from discrimination

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Personal data protection

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Profit sharing

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List of guarantees in case termination

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Intellectual property rights protections

Paid time off

12 days + 8 public holidays

Paid sick leave

52 weeks (+26 weeks)

Maternity leave

12 weeks

Paternity leave

5 days

Parental leave

unpaid upon request

Probation

The probationary period in Mexico is between 30 and 180 calendar days

Non-compete and exclusivity

It is not possible to include an exclusivity clause or a non-compete clause in the employment contract unless such provisions are included in the provision of services agreement.

Payment frequency

Weekly or biweekly

Payday

The deadlines for the payment of wages may never be longer than one week for employees performing material work and than 15 days for other employees.

Mexican law establishes several causes for termination including by mutual consent, by employer’s will for mercantile insolvency or bankruptcy, because of physical or mental incapacity or inability that makes it impossible for the employee to perform the work. If the work risk produces total permanent disability to the employee, the indemnity should be paid.

Employees can be dismissed during their probation period without liability for the employer. An employee can lodge a complaint concerning unlawful dismissal with courts.

FAQs

There are four hiring approaches in Mexico. You can run payroll from your HQ for short-term arrangements, engage contractors for project-based work, set up a local entity to hire directly, or partner with an Employer of Record. Each option involves different compliance and operational effort. An EOR allows compliant Mexican employment without setting up a local entity.

Contractors work well when the relationship is project-based and the person serves multiple clients. If an individual gives their full and undivided attention to your company in Mexico, employment is the right structure under Mexican law, covering entitlements like paid annual leave, sick leave, and social security contributions. For project-based contractor engagements, Boundless’s Agent of Record (AOR) service handles classification, contracts, and payments compliantly in Mexico.

HR compliance in Mexico means your policies and procedures respect all applicable Mexican employment laws and regulations. When you hire in Mexico, this matters both to safeguard employee rights and to reduce employer risk. Compliance covers labour law, sick leave, annual leave (12 days), minimum wage (MXN 315.04-440.87 daily), tax credits, and a 40-48-hour working week. Following these is fundamental for running the business well.

An Employer of Record is the legal employer of the individual in Mexico for government, tax, and employment purposes. It provides a locally compliant contract, runs payroll, files employment taxes, and manages statutory benefits such as 12 weeks of maternity leave and 12 days of annual leave. You remain responsible for sourcing workers, managing day-to-day work, and funding payroll each cycle.

Boundless partners with employment lawyers and advisers in each country we operate in, including Mexico. They ensure employment contracts and onboarding documents comply with the local jurisdiction. We hold detailed discussions on specific norms such as payroll, social protection, data protection, notice periods, and work-from-home regulations. When a sensitive issue arises, our internal team engages the relevant firm promptly.

Employees locally employed through an Employer of Record in Mexico receive full statutory rights under local law, including a compliant employment contract, paid maternity leave, annual leave, illness benefits, tax credits, and severance pay. The national healthcare system covers employees, though many employers also offer private insurance because of waiting times.

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