Hire in Mexico

EOR in Mexico

If a lack of speed or local expertise are among your top concerns when expanding to or employing workers in Mexico, an employer of record may be the best option for achieving your global growth objectives.

An employer of record, sometimes known as an international PEO, enables you to quickly hire and onboard workers in Mexico―often in as little as two weeks―without having to take on the cost and risk of establishing a local entity.

Learn about the hiring, employment, payroll and benefits requirements for workers in Mexico and how our employer of record service, EOR, and local HR experts can help you manage your international employment needs.

Hiring in Mexico

​Top companies from around the world have seen the benefits of hiring in Mexico, but Mexico's labor laws can be complex. Employment relationships in Mexico are governed by the Federal Labor Law (Ley Federal del Trabajo), which sets standards on contracts, wages, working hours, social security, and employee protections. In addition to federal regulations, individual contracts and collective bargaining agreements may also apply.

Additionally, Mexican law prohibits the use of subcontracting for core business activities, following the 2021 labor reform (Reforma en Materia de Subcontratación). Employers must directly hire employees who perform essential functions. Companies engaging subcontractors must ensure these are registered with the Ministry of Labor (STPS).

Because of the complexity of employment laws in Mexico, compliant employment contracts are an essential business need. With Safeguard Global as your partner, you can employ workers in Mexico with confidence, knowing that every contract for every worker meets all requirements. We can also provide you with guidance about cultural norms and hiring best practices and keep you up to date with employment regulations as they change.

Employment contracts in Mexico

In Mexico, employment contracts can be indefinite, fixed-term, or based on specific projects. Indefinite contracts are the default and must be used unless a fixed-term or project-based contract is justified by the nature of the job. All contracts must be in writing and include the employee’s role, salary, working schedule, and benefits. Employees are entitled to profit sharing, vacation pay, and statutory bonuses regardless of contract type.

Apprenticeship or training contracts may also be used for newly hired workers. These must:

• Provide structured onboarding or training aligned with job requirements
• Include agreed training periods and expectations
• Pay wages according to federal minimum standards
• Be limited in duration (usually not more than three months)

Probationary period

In Mexico, probation periods are allowed under specific conditions. For indefinite or fixed-term contracts longer than 180 days, employers may establish a trial period of up to 30 days. This can be extended to 180 days for executive, managerial, or technical positions. During this time, employees are evaluated for performance and fit.

Termination and notice periods

Mexican labor law sets strict rules on termination. Termination without justified cause requires severance pay, while dismissal with cause must follow due process. Common just causes for termination include:

• Dishonesty or theft
• Violence or threats
• Serious breaches of trust
• Unjustified absences
• Insubordination

For termination without cause, employees are entitled to:

• Three months’ integrated salary
• 20 days’ salary for each year of service
• Seniority premium (12 days’ salary per year, capped at twice the minimum wage).

As your Employer of Record (EOR) in Mexico, we can assist you in managing employee terminations compliantly, providing legal guidance and a personalized process to ensure adherence to Mexican labor laws.

Working hours and overtime

The standard workweek in Mexico is 48 hours, divided into six eight-hour days. The legal daily maximum is:

• Day shift: eight hours
• Night shift: seven hours
• Mixed shift: seven and a half hours

Overtime is paid at 200% of the regular hourly rate for the first nine extra hours per week. Overtime beyond nine hours per week is paid at 300% and may result in fines for the employer.

Pay and benefits

When negotiating terms of an employment contract with a candidate in Mexico, here are some of the statutory benefits and paid leave requirements to keep in mind, as well as how an employer of record can support your company’s benefits strategy.

Minimum wages and salary benchmarks

Minimum wage rates in Mexico are set nationally. As of January 1, 2025, the daily minimum wage is 279 MXN in most of the country and 420 MXN in the Northern Border Zone, reflecting a 12% increase from the previous year. ​

The minimum wage applies uniformly across sectors, ensuring fair compensation regardless of industry.​

The overall annual average salary in Mexico is approximately 350,000 MXN, with monthly earnings varying significantly by position, experience, and region. The median monthly salary is estimated to be around 29,167 MXN.​

By gender, a wage gap exists with average annual salaries for men typically exceeding those for women. Efforts to reduce this disparity continue through targeted government initiatives and policy reforms.​

Looking at salary by location in Mexico

• Mexico City: Known for offering salaries above the national average, particularly in sectors such as finance, technology, and healthcare​
• Monterrey: Offers competitive compensation in industries like manufacturing, education, and information technology, with wages generally reflecting the local cost of living
• Guadalajara: While salaries in Guadalajara are competitive, certain sectors may offer compensation slightly below the national average, influenced by regional economic factors​

As your employment partner in Mexico, Safeguard Global can provide you with the latest resources and insights on average employee compensation across various roles and regions, ensuring that you make competitive and compliant employment offers.

Payroll frequency

In Mexico, employees are typically paid on a semi-monthly basis, with salaries disbursed on the 15th and the last day of each month, as specified in the employment contract or company policy. The Mexican Federal Labor Law permits various pay frequencies; however, semi-monthly payments are standard practice, ensuring regular income for employees. ​

In addition to regular semi-monthly wages, employees receive additional compensation such as the mandatory 13th-month salary, known as ""Aguinaldo."" This payment is typically disbursed by December 20th, as stipulated in the labor code, and is calculated based on 15 days of salary. Employers are required to adhere to the agreed-upon schedules for these payments to maintain compliance with labor regulations.

Bonuses and additional payments

In Mexico, the Federal Labor Law mandates an annual Christmas bonus, known as "Aguinaldo," equivalent to at least 15 days of an employee's base salary. This bonus must be paid by December 20 each year, and failure to comply can result in significant fines. The Aguinaldo is a legal obligation for all employers, and the calculation method must be applied uniformly to all eligible employees. ​

Employee benefits and paid leave in Mexico

When negotiating terms of an employment contract with a candidate in Mexico, here are some of the statutory benefits and paid leave requirements to keep in mind, as well as how an employer of record can support your company’s benefits strategy.

Employee benefits

Employers are legally required to provide several benefits under Mexican labor law.

• Instituto Mexicano del Seguro Social (IMSS): Covers healthcare, maternity, work-related accidents, disabilities, and retirement pensions. Employer contributions range from approximately 15–25% of the employee’s wage, depending on salary level and risk class.
• INFONAVIT: A housing fund that supports employee mortgage loans. Employers contribute 5% of the employee’s salary to the fund.
• Retirement Savings (SAR): Employers contribute 2% of an employee’s salary to the retirement savings system managed through AFORE accounts.
• Profit Sharing (PTU): All employers must distribute 10% of annual taxable income to employees.

Public healthcare through IMSS is available to all insured employees and their dependents, but many companies also offer private insurance or supplemental health plans. As your Employer of Record in Mexico, we can guide you through selecting competitive and compliant benefit packages for your workforce.

Tax and social contributions

Income tax and employee deductions

In Mexico, withholding tax is known as Impuesto Sobre la Renta (ISR) and is deducted by employers before paying salaries to employees. Employers must deduct ISR from employee salaries based on applicable income tax rates and submit it to the Mexican tax authorities.

Employer payroll contributions

Mexico's social security system requires employer contributions that are dependent on the total number of employees, and these contributions cover pensions, medical care, disability insurance, and gratuity payments. In addition, workers' compensation is financed by contributions from state governments, employers, and employees.

Business tax and compliance

Employers in Mexico must adhere to various taxation and regulatory compliance requirements to operate legally and avoid penalties.​

• Corporate tax: Companies are taxed at a standard rate of 30%.
• Value added tax (VAT): VAT applies to all businesses regardless of turnover. Employers must register, file monthly returns, and pay VAT on applicable goods and services. ​
• Income tax withholding: Employers must deduct income tax from employee salaries, vendor payments, and contractor fees. Taxes withheld must be remitted by the 17th of the following month, and periodic returns must be filed. ​
• Income tax returns (ITR): ITRs are filed annually based on company profits. Companies must also file annual financial statements with the Mexican tax authorities.

Work visas and immigration

Programs for foreign workers

Hiring foreign nationals in Mexico requires strict compliance with immigration laws. Companies must demonstrate that the position cannot be filled by a Mexican citizen and must obtain government approval to employ foreign workers. Foreign employees must obtain a temporary resident visa with work authorization, commonly referred to as a Visa de Residente Temporal con permiso para trabajar.

• Employers must first register with the Instituto Nacional de Migración (INM) as a company authorized to hire foreign personnel.
• Once authorized, the employer can sponsor the worker’s application for a temporary residence visa with work rights, generally valid for one year and renewable.
• Foreign nationals must also complete a local registration with the INM upon arrival in Mexico and obtain a temporary residence card.

Short-term assignments under 180 days may be completed under a visitor visa with permission to perform paid activities, depending on the role.

Sponsorship and employer responsibilities

Hiring a foreign national in Mexico requires compliance with immigration, labor, and tax regulations. ​

Eligibility criteria

• Confirm that the foreign applicant has the required qualifications and that no suitable Mexican candidate is available.​
• Obtain an Employer's Certificate of Registration (Constancia de Inscripción de Empleador) from the National Institute of Migration (INM).​
• Submit a signed job offer, company registration documents, and the applicant’s credentials to the INM​.

Required documentation

• Valid passport with at least six months' validity​
• Employment contract specifying job duties, salary, and duration​
• Company registration and letter of intent​
• Certified copies of educational and professional qualifications​
• Work permit application (e.g., temporary resident visa with work authorization, depending on the employment type)​
• Completed visa application form and biometric photos​

Post-Arrival Requirements

• Tax Identification Number (RFC): After entering Mexico, the foreign worker must register with the Tax Administration Service (SAT) for tax purposes​
• Social Security Registration: Enroll the foreign worker in the Mexican Social Security Institute (IMSS) for healthcare and other benefits​
• Update local authorities in case of change of address, employment status, or permit renewal​

Processing times and costs

Once a person has applied for a Mexican employment visa, the processing time varies, but it typically ranges from two to eight weeks. ​

The fees for an employment visa vary based on the type of visa. For example:​

• Work visa: $51 USD

• Temporary resident card: $150 USD​

Additional fees, such as document translation and legalization, may apply. Check with the specific Mexican consulate or embassy for the most accurate and up-to-date fee structure.

Leave and public holidays

Annual leave and paid time off

Employees in Mexico are entitled to paid vacation leave after completing one year of service. The statutory entitlement is 12 days per year for first-year employees, increasing by two days each subsequent year until reaching 20 days, with further increments every five years. This leave is fully paid and must be provided within six months after the completion of a full year of service. ​

Additional leave may be offered as part of an employment contract, though it is not required by law. Many employers offer enhanced leave policies to stay competitive and improve retention.​

Employees are also entitled to a vacation premium of at least 25% of their regular salary during the vacation period. Unused statutory leave must be taken within the stipulated period; otherwise, it may be forfeited, depending on company policy.

Public holidays

Employees are entitled to eight paid public holidays.

• Jan. 1: New Year's Day
• First Monday in February: Constitution Day
• Third Monday in March: Benito Juarez Day
• May 1: International Labor Day
• Sept. 16: Independence Day
• Third Monday in November: Revolution Day
• Dec. 1 every six years (2024, 2030, etc.): Presidential Inauguration Day
• Dec. 25: Christmas Day

Employees required to work on a statutory holiday are entitled to double their normal daily pay in addition to their regular salary. If a public holiday occurs on a Sunday, the following Monday is designated as a day off; if it takes place on a Saturday, Friday is provided as a day off.

Sick leave

Personal and sick leave are governed by the Federal Labor Law. Employees are entitled to up to 52 weeks of paid sick leave, with compensation provided by the Mexican Social Security Institute (IMSS) at 60% of the employee's salary, starting from the fourth day of illness. A medical certificate from an IMSS-accredited doctor is required.

Parental leave

Employers must provide 12 weeks of paid leave to female employees, consisting of six weeks before and six weeks after childbirth, with the salary paid by the Mexican Social Security Institute (IMSS), provided the employee has contributed for at least 30 weeks in the preceding 12 months. Pregnant employees who have submitted a medical certificate from an authorized healthcare provider are eligible for benefits, with written notice provided prior to the expected delivery date.

Hiring and talent management

Commonly recruited roles

Global companies operating in Mexico frequently hire for roles in manufacturing, customer service, logistics, and professional services. The most commonly recruited positions are listed below.

• Manufacturing technicians: Operate machinery and perform assembly tasks
• Call center agents: Provide bilingual support to international customers
• Logistics coordinators: Manage warehouse and supply chain operations
• Engineers: Specialize in mechanical, electrical, and industrial fields
• Finance and accounting staff: Handle payroll, compliance, and reporting
• Software developers: Focus on mobile, web, and backend systems
• Administrative assistants: Support HR, legal, and executive teams

As your Employer of Record in Mexico, we help you attract and retain top local talent with competitive compensation, compliance oversight, and onboarding support.

Languages

Mexico is a multilingual workplace environment, with Spanish, English, and indigenous languages used across industries. While Spanish dominates corporate settings, English is widely spoken in government and business sectors, particularly in northern regions and tourist areas. Workplaces often operate in a bilingual or multilingual manner, depending on the industry and region.​

In corporate sectors like IT and finance, Spanish is the primary language for communication, documentation, and client interactions, especially in multinational companies. Meetings, presentations, and official emails are generally conducted in Spanish, though employees may use English informally.​

In government offices and public sector organizations, Spanish and indigenous languages are commonly used for internal communication and documentation. Mexico recognizes 68 national languages, with efforts to preserve indigenous languages such as Nahuatl and Maya. ​

The manufacturing and retail sectors rely on Spanish for daily operations, especially in labor-intensive industries. Factories, warehouses, and construction sites primarily use Spanish, while management-level communication may be in English.​

In customer service, language use depends on clientele. Spanish is common for domestic support, while many companies also hire English speakers to cater to international customers.

Education level

Mexico boasts a dynamic and evolving workforce, supported by a comprehensive academic and vocational education system. Many professionals also hold industry-recognized certifications or postgraduate qualifications. Key academic backgrounds include:

• Engineering and technology
• Business and economics
• Information and communication technologies
• Health sciences
• Social sciences and humanities​

Vocational education and training play a crucial role in preparing individuals for technical and skilled professions. The National College of Technical Professional Education (CONALEP) is Mexico's primary public institution for vocational training, offering programs across various professions and combining classroom instruction with practical workplace training. These institutions provide education at multiple levels, including technical and technological programs.​

Graduates from Mexico's esteemed universities and vocational institutions are widely available across sectors, offering a diverse and skilled talent pool for employers.

Recruitment trends and hiring considerations

The Mexican job market in 2025 reflects strong demand in digital transformation, healthcare, renewable energy, and skilled trades. Technology, manufacturing, and business services remain core drivers of hiring, while hybrid and remote work models continue to shape recruitment strategies.​

Labor shortages in IT, nursing, and construction are influencing training initiatives and government-backed employment programs. Employers increasingly seek candidates with digital competencies, multilingual abilities, and role-specific certifications.​

Cultural considerations include a preference for formal job applications, structured onboarding processes, and clear contractual agreements. As your local partner, we can help you navigate Mexican hiring practices, salary expectations, and legal requirements — ensuring a compliant and efficient recruitment process in Mexico.​

Workplace culture and business practices

Workplace norms and professional etiquette

​Workplace norms in Mexico balance traditional values with modern professional practices. Personal rapport, mutual respect, and formality guide many aspects of business interactions. Here’s what to expect:

Hierarchy and authority

Mexican workplaces often have a hierarchical structure. Senior leaders are expected to make decisions, but input from subordinates is valued. Employees are expected to show respect for authority and observe formal protocols when interacting with managers.

Email and phone etiquette

Business emails and phone calls are typically formal and polite. Emails often begin with greetings such as “Estimado/a” and end with courteous sign-offs like “Atentamente.” Phone conversations may begin with small talk before transitioning to business matters.

Meeting etiquette

Punctuality is expected, although meetings may begin a few minutes late. In-person meetings usually begin with greetings and small talk. Business attire is standard in formal sectors, while startups and tech companies may adopt a more casual dress code.

Professional dress code

In corporate settings, men often wear suits or collared shirts with dress pants, while women wear dresses or formal businesswear. Dress standards vary by industry, with more flexibility in creative or tech sectors.

Typical working hours and business customs

The standard workweek in Mexico is 48 hours, usually spread over six days. Employees typically work eight hours a day, Monday through Saturday. In professional settings, a five-day workweek is common, especially for office-based roles. Overtime must be paid at 100% above the regular hourly rate for the first nine hours per week and 200% thereafter.

Remote and hybrid work arrangements gained popularity following the pandemic, and many companies continue to offer flexible schedules. Employers are encouraged to document these arrangements in writing to ensure compliance with labor regulations.

Key HR challenges and compliance risks

Employers in Mexico must navigate a complex legal framework governed by the Federal Labor Law (LFT), IMSS, and SAT regulations. Key compliance requirements include accurate payroll calculations; proper classification of employment contracts; and adherence to working hour limits, overtime pay, and termination procedures.

Noncompliance can result in fines, labor disputes, or sanctions. Inspections by the Secretaría del Trabajo y Previsión Social (STPS) and the Mexican Social Security Institute (IMSS) are common. Proactive HR practices and strong local expertise are essential to mitigating compliance risks and maintaining smooth operations.

Professional employer organization (PEO) vs. employer of record (EOR) in Mexico

What is a PEO in Mexico?

A professional employer organization (PEO) in Mexico is a third-party provider that offers co-employment services by handling HR functions such as payroll, benefits administration, and compliance with Mexican labor law. The client company retains day-to-day control of employees, while the PEO manages administrative obligations.

This arrangement simplifies employer responsibilities but does not remove all legal liabilities. Companies using a PEO often need to establish a legal entity to meet tax and social security requirements.

Challenges with a PEO model

Under Mexican regulations, a PEO arrangement may not fully shield the client company from labor risks. Employers are jointly responsible for compliance, meaning liabilities for employment claims, misclassification, or payroll errors can still fall on the foreign company.

In contrast, an employer of record (EOR) serves as the legal employer of your workforce. The EOR assumes full responsibility for labor law compliance, payroll, tax withholding, and statutory benefits. This provides foreign companies a lower-risk alternative to local incorporation and co-employment models.

EOR as an alternative to PEO

For companies aiming to expand into Mexico swiftly while minimizing complexities related to local compliance and administrative overhead, partnering with an employer of record (EOR) can be an optimal solution. An EOR enables businesses to onboard employees efficiently — sometimes within days — without the necessity of establishing a legal entity. This approach facilitates streamlined market entry, mitigates legal risks, and alleviates the challenges of managing payroll, taxes, and compliance in a new jurisdiction.

Entity setup in Mexico

Setting up a local entity

While employers of record (EORs) provide a quick entry into Mexico, establishing a legal entity is essential for companies planning large-scale operations, direct hiring, and full market control. The decision depends on growth plans, industry regulations, and cost considerations. Safeguard Global can help you assess your growth plan and objectives and find the solution that best meets your needs. We're the only provider that grows with you.

Entity registration steps and timelines

Establishing a legal entity in Mexico requires several steps, each involving specific documentation and regulatory approvals. The process begins with selecting an appropriate business structure, such as a Sociedad Anónima (S.A.) or Sociedad de Responsabilidad Limitada (S. de R.L.), and reserving the company name with the Ministry of Economy. Applicants must provide identification documents, proof of address, and details of the shareholders and directors. ​

Next, companies must prepare key incorporation documents, including the articles of incorporation, which outline the company's objectives and internal governance structure. These documents are formalized before a notary public and then registered with the Public Registry of Commerce. ​

After registration, businesses must obtain a tax identification number (RFC) from the Tax Administration Service (SAT) and register with the local tax authorities. Depending on the nature of the business, companies may also need to register with other authorities, such as the Mexican Social Security Institute (IMSS) and the National Business Information Registry (SIEM). ​

The entire incorporation process in Mexico typically takes between four to six weeks, depending on the complexity of the business structure and the efficiency of the relevant authorities.

Comparing EOR vs. entity setup

While EOR is a faster, low-risk option for market entry and small teams, entity setup is better for long-term operations and larger workforce expansion.

When EOR might better suit your needs:

• You need to hire employees quickly (one – two weeks).
• You don’t want to set up a legal entity and manage compliance.
• You are testing the Mexican market before long-term commitment.
• You plan to hire fewer than 50 employees in Mexico.
• You need flexibility without significant investment.

When entity setup might better suit your needs:

• You want full business control and plan to operate long term.
• You need to sign contracts, open bank accounts, and own assets in Mexico.
• You are hiring 50+ employees (EOR costs become unsustainable).
• You work in a regulated industry requiring business registration.
• You want to protect your intellectual property under Mexican law.

Global workforce solutions

HR & Benefits solutions in Mexico

Employers in Mexico can leverage local expertise for benefits administration, compliance management, and workforce engagement. As your EOR partner, we help manage statutory benefits such as social security (IMSS), housing fund (INFONAVIT), and retirement savings (AFORE), while also supporting optional benefits like private healthcare, life insurance, and meal vouchers. Our solutions are tailored to ensure your employees receive competitive and compliant benefits.

Tax & Accounting solutions

We ensure accurate payroll tax filings, income tax withholding, and employer compliance with SAT deadlines. Our services include registration and maintenance of RFC (Registro Federal de Contribuyentes), calculation and remittance of ISR, VAT, and local taxes, and support with SAT.

Global Payments & Payroll Processing

We support multi-currency payroll processing and cross-border payments for both local hires and expatriates. We ensure accurate and timely salary payments, bonus distributions, and remittance of government contributions. All payroll operations are compliant with Mexican payroll laws and currency control regulations established by the SAT and Bank of Mexico.

Updated: May 2025

Partner with Safeguard Global as your employer of record and PEO in Mexico

With over a decade of service, we are the longest-serving employer of record and PEO provider in the international market. Organizations around the world rely on EOR, our employer of record solution, to expand and hire in over 170+ countries around the world, quickly and compliantly.

We’ve seen just about every global employment circumstance imaginable—and with our extensive knowledge of local law and culture, we know what it takes to get employment right in Mexico. We provide written contracts in the local language, salaries in the local currency and HR support in your employees’ time zone.

Additionally, as a global payroll provider we support payroll administration—including payments, filings and other calculations— all around the world and can accommodate the payroll outsourcing needs of any size organization.

Whether you’re looking to hire as part of a strategic expansion or to meet specific talent needs, our global solutions advisors can walk you through your international hiring options so you can make the right choice for your organization. Contact us today.

Disclaimer: The information provided on or through this website is for informational purposes only and does not constitute legal advice. Safeguard Global expressly disclaims any liability with respect to warranty or representation concerning the information contained herein, including the lost essence, interpretation, accuracy and/or completeness of the information in transit and language translation.