🇲🇽 Hire in Mexico: cost, rules and best EOR options
Large pool of software engineers and bilingual professionals in Mexico City, Guadalajara and Monterrey, working in US-compatible time zones.
- Employer on-costs: 27–36% of gross salary (on a $60,000 salary, about $76,200–$81,600 total)
- EOR onboarding: 1-2 business days to start, contract in ~5 days (Deel claim); own entity: About 4-5 months (Deel claim)
- Probation: Up to 30 days for contracts over 180 days; up to 180 days for managerial or technical roles (Remote).
- Currency: Mexican peso (MXN)
- Data confidence: medium, verified 2026-10-05
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What it costs to employ someone in Mexico
Employer on-costs run roughly 27–36% on top 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 |
Employer withholds income tax (ISR) and employee IMSS share from pay and remits them; employer pays the employer share of IMSS, INFONAVIT, SAR and state payroll tax.
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)
Employment rules at a glance
| 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 & 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. |
| 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). |
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).
Employee or contractor in Mexico?
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.
Compare contractor vs employee cost →
Hiring through an EOR in Mexico
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.
Typical onboarding: EOR 1-2 business days to start, contract in ~5 days (Deel claim); own entity About 4-5 months (Deel claim). Mostly UTC-6 (Mexico City; no DST since 2022), so aligned with US Central and 1-3 hours from US coasts. Northwest border states differ.
Providers worth shortlisting
| Provider | Best for | EOR pricing | Coverage | |
|---|---|---|---|---|
| Deel | Companies that want one platform for contractors, EOR and a US PEO, with transparent per-seat list prices. | $599 per EOR employee per month (public list price, checked 2026-10-05) | 150+ countries (vendor claim, per Deel's own and third-party descriptions) | Visit Deel |
| Remote | Teams that want a published price for each product (EOR, global payroll, contractors, contractor of record, US PEO) and an affiliate program with 12-month revenue share. | $699 per employee/month (public list price, checked 2026-10-05) | 90+ countries for EOR (vendor pricing page claim) | Visit Remote |
| Rippling | Companies already running (or willing to adopt) a unified HR, IT and finance platform who want global hiring as an add-on module. | — | Visit Rippling | |
| Oyster | Distributed teams that want published EOR and contractor prices and a long-running affiliate program with tiered revenue share. | $699 per employee/month (public list price, checked 2026-10-05); annual discounts available; refundable deposit required | 120+ countries EOR; contractors in 180+ countries (vendor claim) | Visit Oyster |
| Papaya Global | Mid-size and larger companies that need multi-country payroll orchestration and workforce payments, and will go through a sales process. | 160+ countries (vendor claim as repeated on FlexOffers listing and third-party pages) | Visit Papaya Global | |
| Multiplier | Cost-conscious teams that want EOR priced below $500 per employee with an annual discount. | Third-party summary of Multiplier's pricing: EOR from $459/employee/month on annual contracts and $499 on monthly contracts (not confirmed; multiplier pricing page returned 403 to our fetch) | — | Visit Multiplier |
| Remofirst | Small teams that want the lowest published EOR starting price and a free contractor tier. | Starting at $199 per person/month (public list price, checked 2026-10-05); 'no hidden fees, setup fees, or minimum contract terms' per vendor page | 185+ countries for EOR (vendor claim) | Visit Remofirst |
| Pebl (formerly Velocity Global) | Companies that want an EOR with a tiered reseller/partner program and are comfortable with a recently rebranded vendor. | Third-party reports a flat $399 per employee/month (not confirmed on vendor page; hellopebl.com/pricing returned 404) | 185+ countries (third-party report) | Visit Pebl (formerly Velocity Global) |
Paying and covering your team in Mexico
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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).