# Hire in Mexico Source: https://overseashire.com/hire/mexico · verified 2026-10-05 · confidence medium Large pool of software engineers and bilingual professionals in Mexico City, Guadalajara and Monterrey, working in US-compatible time zones. ## Employer cost Employer on-costs 27–36% of gross salary. Recomputed 5 Oct 2026 as % of base salary, using 2026 IMSS employer rates (secondary compilations of the Ley del Seguro Social) and UMA 2026 = MXN 117.31/day (INEGI, via secondary sources). Worked example at SBC MXN 2,000/day (about MXN 60k/month): fixed sickness quota 20.40% x 1 UMA = 23.93 (1.2%) + 1.10% on the part above 3 UMA = 18.1 (0.9%) + cash benefits 0.70% + disability and life 1.75% + childcare 1.00% + pensioners 1.05% + retirement (SAR) 2.00% + old-age/severance (CEAV) 7.513% + work-risk premium class I about 0.54% = about 16.6% IMSS/SAR, + INFONAVIT 5.00% = 21.6%. At minimum-wage SBC (about MXN 330/day) the same items give about 22.5% (CEAV only 3.15% but fixed quota is a larger share). Add state payroll tax (ISN 1-4%, 3% in Mexico City) and aguinaldo 15 days (4.1%) + vacation premium (about 0.8-1%): totals about 27% (low-ISN, high wage) to 33-36% (lower wage, 3-4% ISN). Excludes PTU 10% profit sharing (company level, capped) and optional benefits. Deel's 19.15%-28.85% social-security range is a different band assumption; not used. Derived estimate, not a published figure. | Contribution | Rate | Notes | |---|---|---| | IMSS (health, disability, life, childcare, retirement/old age) | Employer: sickness fixed quota 20.40% of 1 UMA + 1.10% above 3 UMA; cash benefits 0.70%; disability and life 1.75%; childcare 1.00%; pensioners 1.05%; old-age/severance (CEAV) 3.150%-7.513% by salary band; work risk from 0.54% (class I) upward | Rates for 2026 from secondary tax-practitioner tables (Ley del Seguro Social), calculated on the integrated contribution salary (SBC) with a cap of 25 UMA/day; UMA 2026 MXN 117.31/day. Work-risk premium varies by risk class. | | INFONAVIT (housing fund) | 5% | Housing contribution on SBC (PwC cites 5% housing) | | SAR retirement | 2% | Retirement contribution on base salary (PwC cites 2%); old-age/severance portions are separate IMSS items | | State payroll tax (ISN) | Varies by state; 3% in Mexico City | Levied by state; rates and bases differ | | PTU profit sharing | 10% of adjusted taxable income (company level) | Distributed to employees annually; individual payout capped at 3 months' salary or 3-year average payout | Mandatory benefits: Aguinaldo: at least 15 days' pay by 20 December; Vacation premium: at least 25% on vacation pay; PTU profit sharing (10% of company taxable income); Paid sick leave via IMSS; Work-from-home allowance (Deel cites MXN 1,000/month for remote workers); Maternity 12 weeks paid (IMSS); paternity 5 working days (employer; Remote) ## Rules - Payroll: Weekly, biweekly or monthly; often biweekly - Probation: Up to 30 days for contracts over 180 days; up to 180 days for managerial or technical roles (Remote). - Notice and severance: No statutory advance notice. Unjustified dismissal: 3 months' integrated salary plus 20 days per year of service (Deel; LFT arts. 48 and 50 as generally described), plus a seniority premium of 12 days per year of service on a salary capped at twice the minimum wage and accrued benefits. Retrenchment-type or employee-resignation seniority-premium conditions not verified. - Termination: Dismissal for cause must be documented and notified in writing; unjustified dismissals can add back pay claims (salarios caidos) in litigation. Employers with 50+ staff must consult before collective dismissals (Deel). - Working time: Currently 48 hours/week (8 hours/day). A constitutional reform published 3 Mar 2026 phases the maximum down to 40 hours by 2030 (46 in 2027, 44 in 2028, 42 in 2029) with no pay cut; the secondary Federal Labor Act changes and electronic time recording were reported as approved in April 2026 (Baker McKenzie). Overtime paid 100% up to 9 hours/week, 200% above (Deel: 100%-200%); 300% for public holiday work. - Paid leave: 12 vacation days after year one, rising with tenure to 20+ (Remote, Deel). Public holidays: about 7 mandatory days per year plus 1 Oct every six years (not verified from a retrieved source). - Minimum wage: MXN 315.04 per day in 2026; MXN 440.87 per day in the Northern Border Free Zone (Remote, https://remote.com/country-explorer/mexico). ## Contractors Risk is significant. The 2021 outsourcing reform bans personnel subcontracting except registered specialized services (REPSE) (not verified from a retrieved source). Deel reports misclassification fines above MXN 500,000 between 2021 and 2025. Genuine independent contractors need their own invoices (CFDI), control of their work and multiple clients. ## EOR Hiring employees directly needs a Mexican legal entity (registrations with SAT, IMSS, INFONAVIT, state payroll tax). Deel claims own-entity setup costs about MXN 88,411 one-time and takes 4-5 months before the first hire; an EOR is claimed to start in 1-2 business days with contracts in about 5 days. Onboarding: EOR 1-2 business days to start, contract in ~5 days (Deel claim); own entity About 4-5 months (Deel claim). ## FAQ **Is the 13th month (aguinaldo) mandatory in Mexico?** Yes. Employers must pay at least 15 days' salary as aguinaldo by 20 December, pro-rated for partial years. **Can I hire in Mexico without a local entity?** Not as a direct employer. You need a Mexican entity, or use an EOR that employs the person on your behalf. **What are employer social contributions in Mexico?** IMSS, INFONAVIT and SAR together run roughly 19%-29% of salary (Deel), plus state payroll tax such as 3% in Mexico City. **Is there a mandatory notice period?** No statutory notice period (Remote), but unjustified dismissal triggers severance of 3 months plus 20 days per year of service (Deel). Unverified: IMSS component rates for 2026 come from secondary compilations (not imss.gob.mx) and work-risk class I premium 0.54% is from general knowledge; Public holiday count; Seniority premium cap and conditions (LFT art. 162) not fetched; REPSE outsourcing rules; Employer-cost range is a derived estimate (arithmetic in note); Secondary Federal Labor Act changes for the 40-hour reform and overtime limits (reform reported to raise permitted overtime from 9 to 12 hours/week; not checked in the DOF text); Minimum wage MXN 315.04 / 440.87 sourced to Remote only (CONASAMI resolution not fetched) Sources: - https://www.deel.com/blog/employer-of-record-mexico/ - https://remote.com/country-explorer/mexico - https://taxsummaries.pwc.com/mexico/corporate/other-taxes - https://www.bakermckenzie.com/en/insight/publications/2026/04/mexico-federal-labor-law-reform-shortens-work-wee - https://www.elcontribuyente.mx/indicadores/cuotas-imss/ - https://zetatijuana.com/2026/04/reforma-constitucional-reduce-jornada-laboral-a-40-horas-en-mexico-a-partir-de-2030/ Not legal or tax advice.