Hire in Mexico
United Mexican States — 130 million population, $13,160 GDP per capita. Everything you need to know about employment law, tax, compliance and hiring in Mexico.
Capital
Mexico City
Currency
Mexican Peso (MXN)
Languages
Spanish
Time zones
UTC-6 (CT), UTC-7 (MT), UTC-8 (PT)
Hiring overview
- Typical time to hire
- 2-3 weeks for contractor, 3-6 weeks for full-time
- Entity requirement
- Mexican entity (SA de CV or S de RL de CV) required for direct employment. Foreign entity registration is complex.
- EOR available
- Yes — from $399/employee/month through a Corpshore entity
- Contractor of record
- Yes — from $39/worker/month
Employment law
- Standard workweek
- 48 hours (reform pending to reduce to 40 hours)
- Maximum weekly hours
- 48 hours
- Minimum annual leave
- 12 days after 1 year (increased from 6 in 2023 reform), rising with tenure
- Public holidays
- 7 per year
- Maternity leave
- 12 weeks (6 before, 6 after birth), fully paid through social security
- Paternity leave
- 5 working days, fully paid
- Notice period
- No statutory notice period; employment terminated with immediate severance
- Severance
- 3 months salary + 20 days per year of service (unjustified dismissal). 12 days per year for voluntary separation after 15+ years.
- Probation
- Up to 30 days (180 days for management/technical roles). Workers retain full rights during probation.
- Overtime rules
- First 9 overtime hours per week at 2x. Beyond 9 hours at 3x. Sunday premium: 25%.
Tax overview
- Income tax range
- 1.92% to 35%
- Corporate tax
- 30%
- Social contributions
- Employer: ~25-30% of salary (IMSS, INFONAVIT, SAR). Employee: ~3-4%.
- VAT / GST
- 16% (IVA); 0% on food, medicine, and border regions
- Tax year
- Calendar year (Jan-Dec)
- Treaty network
- Over 60 tax treaties, including with all major trading partners
Compliance landscape
- Worker classification
- Mexican law strongly presumes an employment relationship. The subordination test is the key factor. Misclassification can trigger back-pay, social security contributions, and profit-sharing (PTU) obligations.
- Data protection
- Ley Federal de Proteccion de Datos Personales en Posesion de los Particulares (2010). Requires privacy notices (avisos de privacidad) and consent for data processing.
- Right to work
- Work visa (visa de trabajo) required for foreigners. Employers must verify immigration status. Maximum 10% foreign workforce in most categories.
- Non-compete
- Generally not enforceable under Mexican law. The constitutional right to work (Article 5) takes precedence. Non-solicitation clauses may have limited enforceability.
- Collective bargaining
- 2019 labour reform strengthened union democracy (secret ballots, personal votes). Unions must prove representivity. Required under USMCA trade commitments.
Payment rails
SPEI (Sistema de Pagos Electronicos Interbancarios) provides real-time interbank transfers and is the standard payroll method. Wise offers competitive MXN exchange rates.
Key considerations for hiring
- Profit sharing (PTU) requires distributing 10% of pre-tax profits to employees annually
- Christmas bonus (aguinaldo) of at least 15 days salary is mandatory
- 2023 vacation reform doubled minimum annual leave from 6 to 12 days
- Nearshoring trend is driving significant talent demand, especially in manufacturing and tech
Business and cultural context: Mexico
Business culture
Relationship-oriented, with personal connections (personalismo) influencing business decisions. Formal titles used in initial meetings. Lunch is often the main business meal.
Key industries
Talent pool strengths
Historical context
Mexico's 2019 labour reform was one of the most significant in decades, required under the USMCA trade agreement. It replaced company-controlled unions with independent ones, introduced secret ballot votes for collective agreements, and created specialised labour courts to replace the old tripartite boards.
Ready to hire in Mexico?
Use our EOR service from $399/month and we handle employment law, payroll, tax and compliance in Mexico for you.