Mexico’s growing economy, highly skilled workforce, and numerous free trade agreements make it a viable option for many global companies interested in expanding into the country. However, successfully hiring and retaining talent in Mexico requires a deep understanding of the market.
In this article, we will explore the concept of an Employer of Record and its role in Mexico. We will discuss the benefits of outsourcing employment responsibilities to a third-party employer and how it can simplify the hiring process for businesses.
In the fast-paced world of programming, North American companies are increasingly turning to remote staff from Latin America (LATAM) to meet their talent needs.
Let’s dive in and discover the advantages of embracing an Employer of Record in Mexico.
Before hiring employees in Mexico, there are a few important things you’ll need to know.
| Overview | |
|---|---|
| Continent | Americas |
| Country | Mexico |
| Capital | Mexico City |
| Time zone | UTC -6 |
| Total Time zones | 4 |
| Working hours per week | 40 |
| Working week | Monday–Friday |
| Typical hours worked | 8 |
| Personal Tax filing deadline | 30th April |
| Financial Year | 1st January to 31st December |
| Date format | dd/mm/yyyy |
| Currency | Mexican Peso (MXN) |
| VAT | the standard rate is 16% |
| EMPLOYERS (% of Gross Salary) | |
|---|---|
| Sickness & Maternity | 2,85% |
| Disability & Death | 1,75% |
| Retirement | 2% |
| Layoff & Retirement Benefits | 3,15% |
| Child Care | 1% |
| Work Related Accidents | 0.5% to 7% |
| Housing Tax | 5% |
| Payroll State Tax | 1.0% to 3% |
| Total Employment Cost | 25,75% |
| Last update | Q1 2023 |
| EMPLOYEES (% of Gross Salary) | |
|---|---|
| Sickness & Maternity | 1,03% |
| Disability & Death | 0,06% |
| Layoff & Retirement Benefits | 1,13% |
| Total Employee Cost | 2,21% |
| Last update | Q1 2023 |
| Payroll | |
|---|---|
| Payroll Cycle | Bi-Weekly 1.75% |
| 13th Salary | 13th and 14th salaries are not required by law, but a common practice. |
| Income Range | Tax Rate |
|---|---|
| Up to 8,952.49 MXN | 1,92% |
| 8,952.50 - 75,984.55 MXN | 6,40% |
| 75,984.56 - 133,536.07 MXN | 10,88% |
| 133,536.08 - 155,229.80 MXN | 16,00% |
| 155,229.81 - 185,852.57 MXN | 17,92% |
| 185,852.57 - 374,837.88 MXN | 21,36% |
| 374,837.89 - 590,795.99 MXN | 23,52% |
| 590,796.00 - 1,127,926.84 MXN | 30,00% |
| 1,127,926.85 - 1,503,902.46 MXN | 32,00% |
| 1,503,902.47 - 4,511,707.37 MXN | 34,00% |
| Over 4,511,707.38 MXN | 35,00% |
| Last update | Q1 2023 |