Employer of record in Mexico

We make it easy and painless to expand your business into Mexico. Forget about dealing with local regulations, confusing tax laws and international payroll management. We take care of all that so you don't have to.

Accelerate your growth into Mexico compliantly and hassle-free

At Serviap Global we handle all employee onboarding, payroll, compliance, risk, mitigation and benefits, so you can focus on what matters most – your business.

How we can help you expand in Mexico

As your EOR in Mexico, we’d help you expand by hiring employees and running their payroll without establishing a local branch office or subsidiary. 

Your candidate is hired by a PEO in Mexico provider in accordance with local labor laws and can be onboarded in days instead of the months it typically takes. Shortly after, your new employee will be working for you, just like any other member of your team. 

Expand to Mexico with Serviap Global

Through our PEO and EOR services, you can hire qualified talent in your industry without the trouble of opening your own legal entity. 

In just a few days, you can easily and safely build a presence in Mexico, being sure that your staff will be hired in compliance with labor and tax regulations

Table of contents

Quick facts

Mexican Peso (MXN)

Mexico City

Payroll Cycle:


Small and medium companies

Small and medium-sized enterprises are a determining link in the chain of economic activity and are essential for regional and local development. 95.4% of companies across the country are SMEs. Their contribution is 52% of GDP. In addition, they represent 72% of the jobs in Mexico.


Mexico has a population of 127 million citizens. About 1/5 of the population lives in or near Mexico City (the capital) and the neighboring State of Mexico, which together house 25.1 million people.

It has a predominantly young population, compared to other industrialized countries. In the 2015 census, more than 55% of the population was under 30 years old. Although the majority of the population speaks Spanish, more than 7 million Mexicans also speak one of the 62 indigenous languages in the country.

Maya and Nahuatl are the most widely spoken. The states with the highest percentage of speakers of indigenous languages are Oaxaca, Chiapas and Yucatan.

Economic opportunities

Mexico is a leading commercial destination due to the availability of cheap labor. Costs are a fraction of the United States and English is available, especially in Baja California.

The average annual salary for an engineer in the United States is US$85,663, while the average annual salary for a mechanical engineer in Mexico is the equivalent of US$15,514. This is just one of the many professions in which salaries are substantially lower, without compromising quality.

Key sectors of the national economy

Mexico’s economy is diversified, including high-tech industries, oil production, mineral exploitation, and manufacturing. Agriculture represents 3.4% of Mexico’s GDP and employs more than 13% of the country’s active population. Mexico is among the world’s largest producers of coffee, sugar, corn, oranges, avocados, and limes.

The banking sector is also growing rapidly and represents an opportunity for investors. The government has expressed its desire to modernize the country’s infrastructure, including hospitals and transportation, and is seeking to attract more FDI.

Human talent

  • 25% of university students graduate in science, technology, or engineering; the eighth-highest percentage in OECD countries and the sixth with the majority of engineering graduates.
  • 4th fastest-growing workforce.

Guadalajara, the Mexican Silicon Valley

Guadalajara, the second-largest city in Mexico, is known as “the Mexican Silicon Valley” for constituting the most important technological cluster in the country, recognized worldwide thanks to the development of the software industry.

The state government has invested in infrastructure to turn Guadalajara into an international technology center. Technology giants like IBM, Oracle, HP, and Motorola have been established for several years in this city.

To date, the city’s exports have exceeded $20 billion, and this figure is expected to increase in the coming years. Telecom and computer equipment from Guadalajara accounts for about a quarter of Mexico’s electronics exports.

All of this is based on technological talent: Guadalajara has an excellent engineering school, the University of Guadalajara, which graduates more than 10,000 highly qualified engineers every year.

Technological ecosystem

Mexico has one of the best startup ecosystems in Latin America. In the last year, it has established itself as one of the most outstanding countries in the field of innovation in fintech, the financial technology sector.

With more than 350 successful startups, it is the largest ecosystem in the region and one of the main drivers of financial innovation in Latin America. The Mexican startup sector is currently 2.5 times larger than that of Colombia, the third in the region with 124 new companies. In addition, startups in Mexico have a lower failure rate: 12% compared to the 14% identified in Brazil.

Advantages for foreign investment 

Mexico offers extremely favorable advantages for foreign investment. The procedure for establishing a new company in Mexico is particularly agile and efficient. Another example is the series of subsidies, renewed and improved day by day, aimed at promoting the exchange of goods and services with other nations.

However, complicated taxes and compliance can make the administration of a company quite complicated. Working with trusted partners is essential to avoid major risks.

Mexican Gastronomy: regional, street and hipster food

Mexican food has some of the best known and loved dishes in the world. Mexican cuisine varies by region due to local climate, geography, and ethnic differences among indigenous inhabitants.

There are seven culinary regions in Mexico, each with its own unique dishes: the North, the North Pacific Coast, El Bajio, the South Pacific Coast, the South, the Gulf and Central Mexico.

Considering its uniqueness and influence on the cultural and social facets of Mexican society and the world, the United Nations Educational, Scientific and Cultural Organization, UNESCO, arranged a special honor. In 2010, Mexican cuisine we placed on the Representative List of the Intangible Cultural Heritage of Humanity.

Street food, or “garnachas” have existed since pre-Hispanic times: the Aztecs ate at the Tlatelolco market. From the typical taqueria (taco stand) to the mobile food stall, the streets of Mexico are smorgasbords of culinary delicacies.

Mexico’s extensive culinary tradition is increasingly combined with innovation, with many cutting-edge chefs reinventing it and projecting it into the future. Standout innovators such as Enrique Olvera, Daniela Soto-Innes, Francisco Ruano or Jorge Vallejo place Mexico as one of the most important gastronomic destinations in the world.

General highlights



Mexico City

Num. States / Province

32 states

Principal Cities

Mexico City, Guadalajara, Monterrey


Spanish and 67 indigenous languages

Local Currency

Mexican Peso (MXN)

Date Format


Thousands Separator Format


Country Dial Code

+52 1

Time zone

Pacific Standard Time – PST (UTC -8) Tijuana Mountain Standard Time – MST (UTC -7) Hermosillo Central Standard Time – CST (UTC -6) Mexico City Eastern Standard Time – EST (UTC -5) Cancun


127,504,125 (2022)

Border Countries

Beliza, Guatemala, United States of America

Continental surface

1,960,189 Km² (Due to its territorial extension, Mexico occupies the fourteenth place worldwide.)

Fiscal Year

January 1st to December 31st



Minimum Wage

MXN$312.41 per day in the North Border – Free Zone

MXN$207.44 per day in the rest of the Country

Tax Payer Identification Number

RFC by its acronym in Spanish “Registro Federal de Contribuyentes”

What you need to know about employing personnel in Mexico

Laws that regulate labor relationships

LawsBrief description

Political Constitution of the United Mexican States 

The supreme law that governs the economic, social, and political life in Mexico.

Federal Labor Law

The supreme labor law in Mexico. Only the Constitution is above it, in which the right to work was enshrined in its article 123, which states: “Everyone has the right to a decent and socially useful work […]”

Income Tax Law

The tax with the greatest impact on companies and employees is the ISR.

The tax is on profit obtained by carrying out a professio- nal activity and the income from said activity.

Their tax is calculated on an annual basis, and monthly contributions have to be made towards the stipulated amount.

Social Security Law

The purpose of the Social Security Law is to guarantee the right to health, medical assistance, protection of livelihood, and social services necessary for individual and collective well-being, as well as the granting of a pension.

Key tax and labor authorities

LawsBrief description

Secretary of Finance and Public Credit (SHCP)

The department responsible for proposing and controlling the Federal Government’s economic policy regarding the financial, fiscal, expenditure, income and public debt sector. Also, it is responsible for raising taxes from businesses and individuals, and distributing said funds throughout the government.
Mexican Social Security Institute (IMSS)An institution of the federal government that provides benefits and social welfare programs to people outside of the workforce by age or disability, for employers, and for currently employed persons. Combines public health and economic welfare programs under one agency.
LawsBrief description
Institute of the National Housing Fund for Workers (INFONAVIT)

An agency that provides direct contributions towards the purchase of home, matching funds paid by a given worker as a deduction from their paycheck, while employers also make a contribution. It manages the resources of the National Housing Office, which is funded by employer contributions.

Participation in this program is completely optional for the employee, but mandatory for employers (in such case as the employee has chosen to participate).

National Commission of the Retirement Savings System (CONSAR)

An administrative body of the Ministry of Finance and Public Credit whose fundamental task is to regulate the Retirement Savings System, consisting of individual-owned accounts.

Essentially a national pension system. Contribution to this fund is mandatory.

Institute of the National Fund for Workers’ Consumption (INFONACOT)A financial institution of the Mexican goverment created to enable the purchase of home improvements, furniture, etc. through subsidized low- interest loans eventually paid back via withholding from the worker´s paycheck.

Labor contracts

Individual employment contracts are one by virtue of which a person is obliged to give another a valuable labor or service in exchange for a salary. The lack of the document does not deprive the worker of the rights derived from relevant labor standards.

The hiring of children under 15 years of age is illegal. Those who are under 18 must have concluded the equivalent of a middle school education. People under 18 cannot work in a situation where their health, security, or morality can be at risk.

The minimum age to provide any work in Mexico is 15. Those over 15 and under 16 need authorization from their parents or guardians. People over 18 can work without authorization from anyone else.

Types of contracts

The labor relations may be for a specific task or period of time, seasonal or indefinite, and, where appropriate, may be subject to testing or initial training. Unless stated otherwise, the relationship will be assumed to be for an indeterminate period.

Contract for an undetermined time

Article 39, LFT

It is considered an indeterminate work relationships when an agreement exceeds 180 days. In this case, a trial period may be established, which may not exceed 30 days, with the sole purpose of verifying that the worker meets the requirements and knowledge necessary to achieve the work requested.

It is important to clarify that the probationary period may be extended up to 180 days, only in the case of management, managerial positions and other persons exercising management or administration functions.

Contract for specific work or time

Article 37, LFT

A fixed-term contract can only be stipulated when required by the nature of the work to be provided or when it is intended to temporarily replace another worker.

Recruitment for initial training

Article 39 B, LFT

The law considers that there is a period for initial training when a worker is obliged to provide subordinate services under the direction and command of the employer, while the worker acquires the knowledge or skills necessary for the activity for which they are going to be hired.

When the trial or initial training period is over and the employment relationship continues, it is considered for an indeterminate period.

Trial period contract

Article 39 A, LFT

In the case of trial periods that will be 30 and up to 180 days, for administrative, technical, or specialization work, at the end of their period, if the employer may decided to terminate the employee at no obligation to them.

Contract for work relationship by season

Article 39 F, LFT

A seasonal contract may be used when the activities do not require the provision of services all week, month or year. It should be clear that workers who provide services under their modality have the same rights and obligations as workers for an indefinite period, in proportion to the time worked in each period.

To avoid abuses in the use of these new figures, the contracts must be established in a written agreement and the trial and training periods will be determined.

Basic requirements

Established in Article 25 of the Federal Labor Law, a contract must contain:

  • Name
  • Nationality
  • Age
  • Sex
  • Marital status
  • Unique population registration code
  • Federal taxpayers registry
  • Address of the worker
  • Address of the employer

If the employment relationship is determined by season, initial training, or for an indefinite period and if it is subject to a trial period (when applicable), it must contain:

  • The service or services that must be provided
  • The place or places where work should be provided
  • The form and amount of the salary
  • Other working conditions such as days of rest, vacations, and any other agreement between the worker and the employer


The payroll is one of the most important documents within a company, since there is a control of all the withholdings, at or about legal minimums, of the salary of the employees. From their operation, the final amount that a worker will receive and the amount that the company will invest in a given period is obtained.

Legal benefits in Mexico

Work benefits are additional benefits provided through a worker as a condition of their labor relationship. The benefits are established in a contractual relationship and will be independent of salary, they may consist of an economic, cultural, or medical nature.

The law establishes mandatory benefits that every employer must grant to their employees, the others will be agreed by mutual agreement in the individual work contract


Minimum Wage

Minimum wage, in theory, should be enough to cover the fundamental expenses necessary to provide the employee with a decent life.




Article 5, and 101, LFT

•          A salary is the compensation an employer is obliged to pay its workers for the work they have done during a set time period.

•          Regular employees have to be paid bi-weekly.

•          No salary can be less than the minimum.

•          The salary in cash must be paid precisely in legal currency.

•          Pay must be equal for the same work, regardless of sex or nationality.






Article 76, LFT

Workers who have more than one year of service are entitled to enjoy an annual period of paid vacation:

Years of Service                                          Days of Vacations

1                                                                               12 Days

2                                                                               14 Days

3                                                                               16 Days

4                                                                               18 Days

5                                                                               20 Days

6 – 10                                                                        22 Days

11 – 15                                                                      24 Days

16 – 20                                                                      26 Days

21 – 25                                                                      28 Days

26 – 30                                                                      30 Days

31 – 35                                                                       32 Days


Vacation bonus

Article 79 and 80, LFT

Workers will be entitled to a bonus of no less than 25% of their regular salary they would have earned during the vacation period.

If the employment relationship ends before the year of service is completed, the worker will be entitled to a remuneration proportionate to the time of services rendered.


Christmas bonus

Article 87, LFT

The workers will be entitled to an annual bonus that must be paid before the twentieth day of December, equivalent to, at least fifteen days of salary.

If terminated before the day in which the bonus is due, the employee is entitled to the proportion of the bonus accrued up to that point in the year. (Ex. If fired in August, they are entitled to 8 months’ contributions to the Bonus)




Social security

Article 15, 38, 56 and LSS

•          Social security will provide the employee with medical, surgical, pharmaceutical, and hospital services.

•          The mandatory regime includes the insurance for:

•          Occupational risk

•          Illness and maternity

•          Disability and death

•          Retirement and currently working elders

•          Day care and social services




Additional             benefits beyond the legal minimum

Examples of work benefits are:

•          Food service

•          Transport service

•          Private health insurance

•          Meal vouchers

•          Gas vouchers

•          Savings funds

•          Productivity bonus

Employers contribution or labor cost

The employer contributions turn out to be those sums of money that the employer will be obliged to contribute to the state for having employees. They are not recoverable for the employer.

Social securityThe employer is obliged to register the worker with the Social Security Institute, and pay the corresponding contribution. These payments assure employees have access to various forms of state support in the event of injury, unemployment, or other circumstances.
State taxEach state of the federation has a tax on salaries for personal work, which varies by state. On average the state tax is 3% of the total income of the worker.
Federal taxA fee that employers must cover for any transaction that corresponds to an employment relationship. Failure to comply may result in fines or penalties.

Types of disabilities 

In the Federal Labor Law it is established in Article473 that occupational hazards are accidents and diseases to which the workers is exposed in the course of performing their duties.

Employers must pay the corresponding compensation, depending on whether said injury resulted in death or simply temporary or permanent inability to work. Their responsibility will still exist even if the employee was hired through an intermediary.

A work accident is any organic injury or functional disturbance that can be shown immediately or later on, or can cause death or grievous during the activities of the employee’s work. This includes accidents that may occur when the worker moves directly from their home to the place of work or vice versa

Occupational disease is any pathological state derived from the continued performance of work in a hazardous environment that has exposed them to a contagion, carcinogenic, or otherwise harmful environmental factor.

Disabilities caused by occupational hazards will generate compensation, which must be paid directly to the worker, in cases of mental disability the payment must be made to the person or persons in whose care it is left, and in the case of death of the worker it will be paid to their beneficiaries.

Types of disabilityBrief description
Temporary disabilityLoss of faculties or aptitudes that partially or totally precludes a person from performing their work for some time.
Pemanent partial disabilityThe decrease of the faculties or aptitudes of a person to work at full capacity
Types of disabilityBrief Description
Total permanent disabilityThe loss of faculties or aptitudes of a person that makes it impossible to perform any job for the rest of their lifetime.

Other Type:

Maternity Leave

A working mother enjoys the following rights during and after her


•          During work they will not have to do activities that require considerable effort or that can be of any risk for her health or that of the baby

•          They will have a leave of 6 weeks before delivery and 6 weeks after, with full remuneration according   to   their   salary,   without   fear of termination

•          In case of adoption of an infant, they will enjoy a six-week break with pay, after the day they receive him/her

•          They will have the right to return to their current job position, with no penalties to seniority


The worker must go to a medical clinic that is registered with Mexican Institute of Social Security (IMSS). There they will be evaluated by a doctor, who will decide whether to grant the disability.

Disability due to general illness

According to the Federal Labor Law, the worker will receive 60% of their salary, their fourth day off the job up to a limit of 52 weeks. IMSS will cover this amount during the temporary disability period. It is the client’s decision whether to pay the employee for the first 3 days that the IMSS does not pay. The client may also choose to pay the remaining 40% of the salary that he/she will not receive from the IMSS.

Disability due to a work accident

The worker receives 100% of their salary from the IMSS, starting from day one up to 52 weeks (the limit may be less, depending on an IMSS medical assessment).

Maternity disability

The worker receives 100% of her salary, paid by the IMSS, at the beginning of week 34 of pregnancy, for a total of 84 days’ paid leave.

When the worker is absent due to illness and does not deliver a disability issued by the IMSS, it is not the employer’s obligation to pay him/her for these days.

It is up to the client if they want to grant the employee these days as PTO with their full salary.

Workday and holidays

According to Article 58, LFT, the “workday” is the time during which the worker is available to the employer to lend their work.

The worker and the employer will set the duration of the workday, without exceeding the legal maximum of 8 hours per day or 48 hours per week.

For every six days of work the employee must enjoy at least one rest day.

During the continuous work day the worker will be granted at least one half hour break.

The work day may be extended due to extraordinary circumstances, never exceeding three hours a day or three times in a week, (Essentially “overtime”: Maximum 9 per week)

Type of work dayWorking hours per dayOver timeSundays
Day shift8 hours100% over their horly salary (double)

If the employee is working on Sunday (but still under 48 hours a week), they are owed a 25% bonus over their normal hourly wages.

If the work on Sunday is in excess of 48 hours for that week, then the employee is paid a 200% bonus on their Sunday wages (125% of normal hourly wages x 3)

Night shift7 hours
Mixed shift7 1/2 hours

According to the Article 715 of the Federal Labor Law (LFT), business days are all days of the year except Saturdays and Sundays, mandatory rest, and holidays indicated by the working days calendar and those in which the labor authorities indicated that the work is suspended (for natural disasters, etc.)

Public holidays

DateHoliday name
January 1stNew Years
1st Monday FebruaryDay of the Constitution
3rd Monday MarchBenito Juarez´s Birthday
May 1stLabor Day
September 16thIndependence Day
3rd Monday NovemberDay of the Mexican Revolution
December 1st (Presidential Election year)Presidential Election (every 6 years)
December 25thChristmas

Immigration process

To obtain a work permit it is necessary to have a formal offer letter and employment contract in Mexico before arriving in Mexico to begin said work.

The employer in Mexico must make the petition directly to the National Institute of Migration (INM) in Mexico.

Subsequently, one must start the process of “Temporary residence visa, of a visitor with permission to perform paid activities” requested from the National Migration Institute for employment offer.

According to the Article 715 of the Federal Labor Law (LFT), business days are all days of the year except Saturdays and Sundays, mandatory rest, and holidays indicated by the working days calendar and those in which the labor authorities indicated that the work is suspended (for natural disasters, etc.)

If the resolution is favorable, a visa authorization will be given to the employer.

Once the hiring company has received their authorization with their unique registration number for their process (NUT number), the employee will have to schedule an appointment to conduct an interview at a consulate at any country outside of Mexican territory.

On the day of the consular appointment the (prospective) employee must present:

  • A visa application with all fields filled The signature must be the same as the passport.
  • Copy of the initial authorization by INM.
  • Original and copy of the valid
  • Original and copy of the offer of employment

A color photograph with a white background, with the face visible and without glasses, measuring 32 millimeters x 26 millimeters or 39 millimeters x 31 millimeters.


Once the procedure is authorized, the visa will be delivered on the same day during business hours, otherwise, the INM representative has 10 business days to give you an answer on your visa, in accordance with the guidelines of Immigration Laws.

The visa does not guarantee admission to national territory. The admission to Mexico is subject to the approval of the immigration authorities and may denied in the case of criminal convictions, etc.

Employee termination 

The worker or employer may terminate the employment relationship at any time, with just cause: The worker has deceived their employer in a material way (expenditures, inventory, etc.)

  • The worker presents, a lack of integrity, a lack of honesty, acts of violence, threats, or insults, whether during or outside of working hours
  • The worker, intentionally, causes property damage during the performance of work
  • The worker commits immoral acts or harassment and or sexual harassments against their coworkers
  • The worker reveals secrets or confidential information from the company
  • More than three absences in a period of thirty days, without the employer’s permission or just cause
  • The worker arrives at the work site in a state of intoxication

An employer who dismisses a worker must give written notice clearly stating the conduct or behavior that motivate the decision and the date or dates during which they were committed.

The lack of notice to the worker or the relevant government authorities will provide the employee with grounds to successfully claim that the dismissal was unjustified.

Labor termination settlement

If the employer does not verify the cause of the termination it is considered a termination without cause. The worker will then have the right to be reinstated in its job position or to be compensated.

The employer will be exempt from the obligation to reinstate the worker, by paying the compensation:

  1. Three months of salary
  2. 20 days of salary per each year of service
  3. Payment of overdue wages, if applicable
  4. Vacation and Christmas bonuses accrued by the time of dismissal.

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