How to hire and pay EMPLOYEES IN

Mexico

Looking to hire remote workers to join your team? No matter where in the world your employees work, Oyster makes it easy for you to hire, pay, and take care of employees hassle and worry-free.
Sign Up for a Free Account

Before hiring

EMPLOYEES IN
Mexico

Before hiring employees in Mexico, there are some key things you’ll need to know. Firstly, while it’s not legally required, it’s very common to offer team members private health insurance as well as a grocery coupon card (vales de despensa).

In Mexico, there’s actually no legal obligation for employers or employees to give notice of termination or resignation. Rather than require a notice period, all employees who are terminated for reasons other than gross misconduct (deception, unaccounted absences, physical abuse, harassment, etc) are entitled to three months of their salary as compensation.

We know keeping track of all this might sound overwhelming—but it doesn’t have to be. A solution like Oyster eliminates the barriers for you. With Oyster, you can automate compliance across 180+ countries, easily managing HR and payroll—all in one, easy-to-use platform. 

Get an overview of what you need to know when hiring in Mexico below. 

At a Glance

CURRENCY

MXN

OFFICIAL LANGUAGE

SPANISH

PAYROLL FREQUENCY

MONTHLY, BI-MONTHLY

PUBLIC HOLIDAYS

9

(based on region;
see here
)

EMPLOYER TAXES

30-35%

of gross salary

13th / 14th SALARY

Mandatory 13th salary at end of the year

Good to know

  • There’s a mandatory Christmas Bonus (aguinaldo) in Mexico which is typically 15-30 days of salary given to the employee in December. There’s also a vacation premium which is no less than 25% of an employee’s daily pay that is given for the days the employee takes vacation.
  • There is actually no obligation for employers or employees to provide any notice period in advance of dismissal or resignation. Notice periods can only be enforced if agreed in advance.
  • Rather than require a notice period, all employees who are terminated for reasons other than gross misconduct (deception, unaccounted absences, physical abuse, harassment, etc.) are entitled to three months of salary as compensation.

Employment in

Mexico

Working hours and overtime

In Mexico, normal working hours can’t exceed an average of eight hours a day and 48 hours per week.

An employee is required to work up to three hours of overtime a week, and a total of nine hours in a week at double the normal hourly rate. An employee can choose to work more than nine hours of overtime, but must get paid three times the normal hourly rate.

Employment contracts

There are no statutory language requirements for employment contracts in Mexico, but Spanish is recommended.

Probationary period
Pensions
Notice period

There is actually no obligation for employers or employees to provide any notice period in advance of dismissal or resignation in Mexico. Notice periods can only be enforced if agreed in advance.

Rather than require a notice period, all employees who are terminated for reasons other than gross misconduct (deception, unaccounted absences, physical abuse, harassment, etc.) will be entitled to three months of salary as compensation.

Non-compete agreements

Non-compete agreements are considered unconstitutional in Mexico. An employee’s consent must be required for them to be enforced. 

Employers may offer financial incentives for a former employee to voluntarily abide by non-compete restrictions by paying them a lump sum of an agreed-upon amount of money during the time of employment.

Employment cost calculator

Holidays

01 Jan

New Year's Day

16 Sep

Independence Day

05 Feb

Constitution Day

12 Oct

Day of the Race

15 Mar

Benito Juarez Day

02 Nov

All Souls' Day

01 Apr

Holy Thursday

15 Nov

Revolution Day

02 Apr

Good Friday

12 Dec

Lady of Guadalupe Day

01 May

Labor Day

25 Dec

Christmas Day

05 May

Anniversary of the Battle of Puebla

01 Jan

New Year's Day

05 Feb

Constitution Day

15 Mar

Benito Juarez Day

01 Apr

Holy Thursday

02 Apr

Good Friday

01 May

Labor Day

05 May

Anniversary of the Battle of Puebla

16 Sep

Independence Day

12 Oct

Day of the Race

02 Nov

All Souls' Day

15 Nov

Revolution Day

12 Dec

Lady of Guadalupe Day

25 Dec

Christmas Day

Employer tax

Employers in Mexico are taxed up to 22.75% of an employee’s salary. The tax breakdown is as follows: 

Individual tax

Employees in Mexico are taxed between 1.92% and 45% depending on their income bracket. Employees also pay into social contributions totalling 10.15%.

Termination of employment

Employees in Mexico terminated without cause are entitled to claim reinstatement or severance in the amount of:

  • 90 days of their daily total compensation (this includes pro rata portion of employment benefits ordinarily paid to the employee)
  • 20 days of daily total compensation for each year of service that the employee has worked
  • 12 days of daily base salary for each year of service that the employee has worked (for purposes of calculating this, the employees' salary is capped at twice the amount of the daily minimum wage) plus any accrued salaries and benefits (including paid vacation, vacation premium, Christmas bonus, and any other accrued benefit)

Start hiring employees in

Mexico

Setting up a business entity everywhere you want to hire a new employee isn’t scalable—it takes too long and the legal fees are high. At the same time, understanding and adhering to the local labor laws and employee expectations can be complex and time consuming. And it’s hard to find reliable information on up-to-date employment information for all the countries where you’re considering hiring. Not to mention tracking down invoices and managing employee contracts over email and spreadsheets—that gets messy fast. 

We can’t afford to take risks when it comes to compliance—we need to make sure we follow the local guidelines, especially when it comes to taxes and legalities. 

With Oyster, you can manage HR and payroll, and automate compliance across 180+ countries—all in one, easy-to-use platform.

Hire a team of A-players,
wherever they work in the world.

Get started today!