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Localised employment contracts
Mexico stands out as a leading talent destination in Latin America, offering a vast pool of diverse talent across many industries. Featuring competitive labour costs and close ties to both North and South American markets, Mexico is a great choice for companies looking to hire globally.
Mexico, a country renowned for its highly skilled talent pool and affordable labour costs, is a highly sought-after destination for employers hiring globally. The country has its own legal framework that regulates employment areas, including minimum wages, working hours, employment benefits, and other aspects that employers must consider.
Discover more about salaries, employment costs, and legal requirements for hiring in Mexico. Get our full hiring guide now!
Every employee in Mexico must enter into an individual employment contract with their employer. The contract must outline the terms and conditions of employment, such as salaries, working hours, benefits, and other essential details.
Notice periods: No statutory notice period (may be defined in employment contracts).
Termination of employment: Not at will - reasons must be justified.
Explore all the details of employment contracts in Mexico. Get our full template now!
Employers in Mexico are required to provide mandatory employment benefits in compliance with the country’s labour laws. Many of them also offer extra benefits to stay competitive in the job market. Understanding both of them is essential to attracting and retaining talent.
Get a full breakdown of all the employment benefits available in Mexico.
Mexico has a comprehensive tax framework, where employers are responsible for withholding and reporting income tax and contributing to social security and other schemes and funds. Additionally, companies must comply with VAT regulations and other federal contributions.
Personal income tax rate: From 1.92% to 35%.
VAT: 16%
Tax allowances: Taxpayers can claim personal deductions that reduce taxable income.
Additional tax reliefs: Medical and dental costs, mortgage interest, education fees, retirement contributions, and charitable donations.
Employers in Mexico must pay salaries as agreed and outlined in employment contracts. Wages must meet or exceed the minimum wage set by the government. Employers must also comply with additional obligations, such as providing end-of-year bonuses (aguinaldo) and others.
Salary payment deadline: Typically paid bi-weekly or monthly.
Taxes and contributions payment deadline: By the 17th of each month.
Payroll declarations deadline: By the 17th of the following month.
Payroll currency: MXN
Mexico’s labour frameworks are governed by federal labour laws, which set out the key aspects of employment, including types of contracts, working hours, minimum wages, vacation entitlements, and termination procedures. Employers are expected to understand and follow these standards in order to stay legally compliant.
Total employment cost:
Minimum wage: MXN 278.80
Probation period: Up to 180 days
With EOR services, you can legally employ workers in Mexico without opening a legal entity there. Your EOR will act as the official employer, handling responsibilities like:
PEO services provide HR and administrative support for employers who already have established legal entities. With PEO, you remain the legal employer for your team in Mexico, while your provider manages operations like:
Native Teams provides you with payroll calculators that are adjusted to over 85 countries’ local labour laws. With our calculator, you can easily estimate net and gross salaries, contributions, and other mandatory deductions in Mexico.
Note: The information provided above is for general guidance only and should not be considered a substitute for legal advice. We strongly recommend consulting with qualified professionals who specialise in local labour laws before making any hiring decisions. While the data was accurate at the time of writing, labour regulations are subject to change, and it is your responsibility to stay informed about the latest developments.
Last update: August 18, 2025
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When working with a freelancer or gig worker in Mexico, it’s important to establish a working relationship that doesn’t resemble full-time employment. Freelancers and gig workers are typically self-employed and operate independently from any company or organisation.Â
Due to the nature of their work, it’s important to establish a clear service contract and avoid treating contractors as employees. Otherwise, the working relationship may be reclassified as employment and impose legal obligations and tax backpayments.Â
