Currency
Mexican Peso (MXN)
EOR IN Mexico
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A guide to employing and growing your team in Mexico
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Mexico has a large, export-oriented economy with a strong focus on manufacturing, particularly in the automotive and aerospace sectors, as well as a growing tech industry. The labor market is governed by the Federal Labor Law (Ley Federal del Trabajo), which provides extensive rights and protections for employees. As of 2026, the general minimum wage in Mexico is MXN 315.04 per day (approximately MXN 9,451.20 per month), though rates are higher in the Northern Border Free Zone.
Employer Contributions
Social Security (IMSS): 20% – 25%
Housing Fund (INFONAVIT): 5%
Retirement Savings (SAR): 2%
State Payroll Tax: 1% – 4%
Total Employer Contribution: 28% – 36%
Employee Payroll Taxes
Social Security (IMSS): 2.375%
Total Employee Contribution: 2.375%
Employee Income Tax Rates
Up to MXN 8,952: 1.92%
MXN 8,953 – MXN 75,984: 6.40%
MXN 75,985 – MXN 133,536: 10.88%
MXN 133,537 – MXN 155,220: 16%
MXN 155,221 – MXN 185,856: 17.92%
MXN 185,857 – MXN 374,832: 21.36%
MXN 374,833 – MXN 590,796: 23.52%
MXN 590,797 – MXN 1,127,184: 30%
MXN 1,127,185 – MXN 1,502,904: 32%
MXN 1,502,905 – MXN 4,508,712: 34%
Above MXN 4,508,712: 35%
Statutory Leave
Employees are entitled to 12 days of paid annual leave after their first year of service. This entitlement increases by 2 days for each subsequent year until it reaches 20 days. After the sixth year, the leave increases by 2 days for every 5 years of service. Additionally, employees receive a Vacation Premium (Prima Vacacional) of at least 25% of their salary during their leave. Mexico also observes 8 mandatory public holidays.
Pregnancy and Maternity Leave
Female employees are entitled to 12 weeks of maternity leave (6 weeks before the due date and 6 weeks after). During this period, they receive 100% of their salary, paid by the Social Security Institute (IMSS).
Paternity Leave
Eligible male employees are entitled to 5 working days of paid paternity leave upon the birth or adoption of a child, fully paid by the employer.
Work-Related Injury Leave
Parental Leave: While there is no specific extended statutory parental leave, employees may request adoption leave (6 weeks for women).
Other Leaves: Includes a mandatory Christmas Bonus (Aguinaldo) of at least 15 days’ salary paid by December 20th and a Profit Sharing (PTU) payment where companies distribute 10% of their annual taxable profits to employees.
Sick Leave: Paid by IMSS from the fourth day of illness at 60% of the salary, provided the employee has a medical certificate. The first 3 days are typically unpaid or covered by the employer depending on the contract.
Termination Process
Termination in Mexico is highly protected. Employers must have “just cause” (e.g., dishonesty, violence, or significant negligence) to terminate without paying heavy severance. If terminated without cause, employees are entitled to a severance package of 3 months’ salary, plus 20 days of salary for each year worked, and a seniority premium (if applicable).
Notice Period
There is no statutory minimum notice period required by law for termination, though it is customary to provide 15 to 30 days. However, the employer must provide a written notice clearly stating the reasons for dismissal.
Probation Period
The standard probation period is 30 days. For managerial, technical, or specialized positions, it can be extended up to 180 days. During this period, the employer can terminate the relationship if the employee does not meet the requirements of the role.