Guide to employing in Mexico

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XPANDIUM offers expert Employer of Record (EOR) solutions and payroll and benefits management services to facilitate seamless hiring and payroll processing. Our specialised EOR platforms in Mexico enable you to engage top talent and manage payroll intricacies without establishing a local legal entity. When you partner with XPANDIUM, we ensure compliance throughout the hiring and onboarding process by leveraging our own local PEO entity.

With XPANDIUM as your employer of record in Mexico, we will handle payroll administration, tax obligations and benefits administration, leaving you to focus on the important part – optimising the workforce and unlinking your business’ full potential.


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Xpandium - Hire your employees in Mexico

The Mexican labour market operates within the framework of Mexico’s labour laws, which include the Federal Labour Law (Ley Federal del Trabajo) and local regulations. These laws aim to protect the rights of both employers and employees. To navigate this landscape successfully, employers must follow specific protocols when employing individuals, such as providing written contracts that include a probationary period, defining working hours and ensuring compliance with minimum wage requirements set by the Mexican government based on location and occupation. Additionally, these laws cover aspects such as paid leave and termination procedures.

Complying with the provisions outlined in the Federal Labor Law is crucial for establishing a business operation while ensuring compliance in Mexico. You can establish your business without complications by aligning your hiring practices with these regulations.

Trusted Employer of Record providers in Mexico, such as XPANDIUM, can offer guidance to help you navigate the complexities of Mexico's labour laws and facilitate your business expansion.

The following information is a basic guideline for employing full or part-time in Mexico, and the salary calculator can quickly help you understand the basic costs of a mid-range salary.

Mexico City panorama

The following information is a basic guideline for employing staff in Mexico and the salary calculator can easily help you to understand the basic costs.

Employment Contract

Employment relationships may be agreed on for

  • fixed term employment (temporary) or
  • indefinite duration (open-ended, permanent).

Probation period

Probation period is optional and cannot exceed 4 months.In case of fixed-term contracts, the probation period can not be more than 50% of the term of the contract.

Working hours

Full time employment is considered 8 hours per day and 40 hours per week in Mexico. Less hours will mean part-time work.

Hours worked above 8 hours per day / 40 per week or on public holidays are considered overtime. Employer and Employee must agree on working overtime.

Overtime hours cannot exceed a total of 8 hours within a 7 days’ period and must be compensated during payroll for overtime as per local law.Parties may agree that the overtime hours over a 4-months’ time-frame schedule be an average 12 hours for every 7 calendar days.

Minimum wage

The current minimum wage is 584 EUR for full-time employment or 3.84 EUR for hourly work in Mexico.

13th month salary

Not required.

Benefit package

In Mexico, there are no obligatory fringe-benefits that an Employer must offer, however a custom benefit plan may be set up for your team (see more details at the Benefit section).

Payroll Cycle

Salaries are payrolled and paid on a monthly basis.

Health insurance in Mexico

The Mexican health insurance system is a solidarity-based social insurance system. This means it provides healthcare for everyone, including persons insured by employment agreement. Mexico is covered by health care and treatment is equally available in all regions. Employees can order a European Health Insurance Card or its replacement certificate in the State Portal.

Employer taxes

33.8% total employment cost in Mexico.


Public Holidays

Mexico celebrates a total of 10 public holidays throughout the year. One notable celebration is the "Día de los Muertos" (Day of the Dead), on 1 and 2 November; even though it’s not officially recognised as an official public holiday, it is widely observed in many regions.

Additionally, certain holidays may be observed on a different day if they fall on a weekend to create a long weekend for employees to enjoy.

To obtain information about Mexico’s public holidays, it is advisable to consult official government sources and local authorities who announce them annually. As an Employer of Record (EOR) in Mexico, XPANDIUM stays current with these details to ensure compliance for your workforce during these periods.

The following is a list of important Public Holidays in Mexico:




New Years Day

January 1

Año Nuevo

Constitution Day 

February 5

Día de la Constitución (1st Monday)

Benito Juárez's Birthday

March 21

Natalicio de Benito Juárez (3rd Monday)

Holy Thursday

Date varies in April

Jueves Santo (movable holiday)

Good Friday

Date varies in April

Viernes Santo

Labor Day

May 1

Dia do Trabajo

Cinco de Mayo

May 5

Independence Day

September 16

Día de la Independencia

Day of the Dead

November 1 - 2

Día de los Muertos (Optional per Regions)

Revolution Day

November 20

Día de la Revolución (3rd Monday)

Christmas Day

December 25



Popular benefits in Mexico

When your company hires employees in Mexico, attractive perks and benefits can help you attract and retain top talent. While there aren’t any benefits specified by Mexican labour laws, XPANDIUM’s personalised approach allows you to create a customised benefits plan that aligns with your company.

In addition to salaries, employees can enjoy non-salary benefits that promote a healthy work-life balance and encourage favourable working conditions.  XPANDIUM’s EOR services in Mexico make it easy to manage these benefits without any complications. These voluntary, non-salary benefits may include:

·        Internet allowance

·        Cell phone allowance

·        Meal vouchers are provided by the Employer through a card (usually around 2600 MXN per month)

·        Wellness/fitness allowance

·        Computer allowance


By partnering with XPANDIUM as your Employer of Record service provider in Mexico, you can provide benefits packages that resonate with your workforce.

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Supplementary medical insurance (private / dental / vision)

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Supplementary Life or other special insurance

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Additional paid holidays

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Flexible work schedule

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Voluntary pension fund scheme

Benefit planning process includes

Creating a tailored benefits package for your employees becomes a quick and seamless process with XPANDIUM. As your employer of record service provider in Mexico, our meticulous approach will ensure a seamless benefit-planning process:

1.     Determining the annual amount you want to offer employees – this amount can be divided into 12 instalments and integrated into the regular payroll.

2.     Select the specific benefit items your company would like to offer its employees – this may include voluntary benefits such as medical insurance, additional paid time off and flexible work schedules.

3.     Creating internal policies that will outline the details of the benefits plan -These policies must be formally and thoroughly communicated to relevant employees and integrated with the monthly payroll.

4.     Ensuring employees have accurately completed benefit statements – specifying preferred benefits and respective amounts. These statements must be completed, signed and provided to the Mexican Employer of Record for processing.

5.     Side agreements - If you decide on select group benefits, XPANDIUM’s experienced advisors will guide you through planning and signing any additional agreements that align with employment contracts.


Types of Leaves

Paid leave

Employees are entitled to 28 days.

Public holidays

There are 12 public holidays in Mexico.

Sick leave

An employee is entitled to 182 sick-leave days yearly while enrolled in the national social security system.

Payment is 70% of the employee’s average salary, which is paid by the Employer from the 4th day of sickness but from the 9th day the payment is taken over by the State.

Pregnancy and maternity leave

Expecting women can have a total of 20 weeks / 140 days.

Maternity leave may include and start 70 days prior to giving birth. State health insurance covers maternity leave with 100% payment.

Parents receive a one-time 320 EUR allowance for child birth and in case of triplets the payment is 1,000 EUR per child.

Paternity / paternal leave

The father is entitled to 10 working days off for paternity leave which can be granted within 2 months of the expected child’s birth date. After the birth, fathers are entitled to 2 months of paternity leave with the payment of 100% average salary payment, however it is capped at 3 times of the minimum wage amount.

Other / Child Adoption leave

Employees are entitled to a special leave if adopting a child under the age of 10.

Other / Child care leave

Any parent may take paid leaves for taking care of a child.

Leave varies based on the age of child:

  • 3 days - up to 2 children under the age of 14
  • 6 days - 3+ children under the age of 14

Payment for days taken is calculated based on the minimum wage.


Employment termination

Employers have the below options to terminate an employment contract in Mexico:

Termination under probation period

Termination by the Employer is immediately effective with a special 15 days’ written notice to the Employee.

Resignation by Employee

Employees may freely terminate their employment contract with a written notice of minimum 14 days to 1-month notice.

Termination by Employer with notice

An employment agreement may be terminated by the Employer by notice with below period of notices.

If employment period is

  • up to 1 year period: 15 calendar days
  • from 1 to 5 years of employment: 30 calendar days
  • from 5 to 10 years of employment: 60 calendar days
  • 10+ years of employment: 90 calendar days

Termination of fixed term contract

If termination is due to Employer’s redundancy, the employee is entitled to the salary that they would have received from the date of termination to the expiry date of the contract.

Termination by mutual consent

The termination by mutual consent allows the Employer and Employee to agree freely in a written agreement with each other on the conditions of termination.

Expiry of employment contract

When the employment contract expires then such employment is automatically terminated.

Severance pay

Employee is entitled to severance pay if the Employer terminates the contract due to redundancy. The severance pay is the average salary calculated based on the latest 6 months salary.

Employees are entitled to receive higher amounts of severance pay depending on the length of employment with the Employer:

  • From 5-10 years of employment: +1 month salary
  • over 10 years of employment: +1 month salary

How EOR works in Mexico

Expanding your business into a new country is a time-consuming process requiring meticulous planning. XPANDIUM’s employer of record services in Mexico streamlines the expansion process and ensures a smooth transition for your business.

Our EOR solution handles employment responsibilities such as payroll, work permits, employment contracts and taxation for your Mexican workforce while guaranteeing compliance with local regulations.

Collaborating with an EOR such as XPANDIUM simplifies the intricacies of establishing a presence in a new country, effectively freeing you from navigating legal complexities and localised challenges.  Our innovative approach to EOR services will accelerate your expansion and help you establish connections that align with your business’s unique requirements.

 Take the complexity out of hiring employees in Mexico, and contact XPANDIUM for a tailored solution.


Global Payments to employees in Mexico

When hiring employees in Mexico, it is essential to establish a payroll management system based on the local regulations governing employee salaries. Understanding the intricacies of Mexico’s payroll setup will be crucial for your business operations.

An experienced EOR, such as XPANDIUM, can handle your global payroll in Mexico.

Here is how XPANDIUM compliantly process your employee payroll:

1.     Collect Employee Information – As part of our payroll setup, we will gather all employee and tax-related information required.

2.     Calculate Gross Pay - Determine compensation based on either hours worked or upon salaries.

3.     Calculate Net Pay - Subtract taxes and deductions from the pay to determine the final amount.

4.     Pay Your Workers – XPANDIUM will process the payroll and ensure salary payments are made.

5.     File Taxes - Fulfil your tax obligations, including social security contributions.

Partner with XPANDIUM and experience the benefits of our expert payroll services in Mexico.