Mexico at a glance
Taxes in Mexico
Employer Contributions
Total employer tax: 39.69%–46.72%
| Contribution Type | Rate |
|---|---|
| Social Security (IMSS) | 26.54%–33.58% |
| Retirement (SAR) | 5.15% |
| National Housing Fund (INFONAVIT) | 5% |
| Payroll tax (state-level) | ~3% |
Total employer tax: 39.69%–46.72%
| Contribution Type | Rate |
|---|---|
| Social Security (IMSS) | 26.54%–33.58% |
| Retirement (SAR) | 5.15% |
| National Housing Fund (INFONAVIT) | 5% |
| Payroll tax (state-level) | ~3% |
Total employee tax: 4.7%–37.7%
| Contribution Type | Rate |
|---|---|
| Social Security (IMSS) | 1.65% |
| Retirement (SAR) | 1.1% |
| Income tax (ISR) | 1.92%–35% |
| Monthly Income (MXN) | Rate |
|---|---|
| Up to 8,952.49 | 1.92% |
| 8,952.50 – 15,116.17 | 6.40% |
| 15,116.18 – 26,538.69 | 10.88% |
| 26,538.70 – 30,751.64 | 16% |
| 30,751.65 – 36,822.84 | 17.92% |
| 36,822.85 – 74,228.04 | 21.36% |
| 74,228.05 – 116,565.48 | 23.52% |
| 116,565.49 – 136,272.40 | 30% |
| 136,272.41 – 409,076.50 | 32% |
| 409,076.51 – 818,496.00 | 34% |
| Over 818,496.00 | 35% |
Employer of Record in Mexico
How Remote& EOR Works
Remote& acts as the legal employer of your Mexican workers — managing IMSS, SAR, INFONAVIT contributions, payroll, tax filings, and employment contracts in accordance with the Federal Labour Law, while you direct the work.
| Party | Role |
|---|---|
| Your Company | Manages work tasks, performance, and team direction |
| Remote& | Runs payroll, files IMSS/SAR/INFONAVIT/ISR, administers statutory benefits, ensures Ley Federal del Trabajo compliance |
| Employee | Works for your company under a locally compliant Mexican contract |
Ask Remi:
"Hire a cloud architect in Mexico City — MXN 75,000/month, starting next quarter" Remi handles everything: contract, IMSS registration, INFONAVIT enrollment, ISR withholding, and payroll.
Benefits in Mexico
- IMSS (social security): Mandatory. Covers healthcare, disability, maternity, and retirement. Employer contributes 26.54%–33.58%
- INFONAVIT (housing fund): Employer contributes 5% of salary to employee's housing fund account
- Christmas bonus (aguinaldo): Minimum 15 days' salary, paid before December 20
- Vacation bonus (prima vacacional): Minimum 25% on top of vacation salary
- Profit sharing (PTU): Eligible employees receive 10% of company's prior-year net taxable income, distributed annually
- Private medical insurance
- Major medical expense insurance (Gastos Médicos Mayores)
- Life insurance
- Remote and flexible work options
- Paid relocation support
Leave entitlements
| Leave type | Entitlement |
|---|---|
| Paid Annual Leave | 12 days (year 1), increasing by 2 days per year up to 20 days; plus 8 public holidays |
| Paid Sick Leave | Up to 52 weeks (+ 26 additional weeks for certain conditions), via IMSS |
| Maternity Leave | 12 weeks (6 before, 6 after birth) |
| Paternity Leave | 5 days |
| Parental Leave | Unpaid upon request |
Employment conditions
Probation
Probation periods in Mexico range from 30 to 180 calendar days, depending on the role.
Non-Compete
Exclusivity or non-compete clauses cannot be embedded in standard employment contracts unless set out in a separate services agreement — and their enforceability is limited under Mexican law.
Employee Rights & Protections
Mexican workers are entitled to: written employment contract, payslip, Right to Disconnect, anti-discrimination protection, personal data protection, profit sharing (PTU), union membership, and intellectual property protections.
Payments
End of employment in Mexico
The Federal Labour Law recognizes several grounds for termination including mutual consent, employer insolvency, and physical or mental incapacity preventing work. Employees dismissed during probation carry no further employer liability.
Unlawful dismissal entitles workers to either reinstatement or constitutional indemnification — three months' salary plus 20 days' salary per year of service, plus accrued vacation, seniority premium, and outstanding bonuses.
Frequently asked questions
Four routes: run payroll from HQ (generally non-compliant long-term); engage contractors (non-compliant for full-time dedicated workers); establish a Mexican entity (S.A. de C.V. or similar) for direct employment; or use Remote& as Employer of Record for the fastest compliant path.