Mexico Employment Guide

Mexico is in North America, bordering Guatemala, Belize (south), the US (north), the Gulf of Mexico (east) and the Pacific (west). It has ~130 million people; Spanish is official, and Mexico City is the capital. As Latin America’s 2nd largest economy, its key sectors include manufacturing (notably export-oriented), oil, mining, tourism and agriculture. Labor laws (per Ley Federal del Trabajo) protect wages, hours, leave and social security. Standard workweek: 48 hours (overtime needs extra pay). Salaries are usually monthly (avg. MXN 15,000 pre-tax). Laws cover paid leave and protect temp/contract workers, balancing interests for a fair, flexible labor market.

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Currency

Mexican Peso (MXN, $)

Capital

Mexico City

Official language

Spanish

Salary Cycle

Monthly

Our Employment Guide in Mexico

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Understanding Mexico's Minimum Wage Structure

Mexico's minimum wage system operates with regional differentiation, primarily distinguishing between the Northern Border Free Zone (NBFZ) and other areas. This geographical approach reflects economic disparities across the country.

Northern Border Free Zone: 312.42 Mexican pesos per day (approximately 114,029.65 pesos annually)
Rest of Mexico: 207.44 Mexican pesos per day (approximately 75,715.65 pesos annually)

Employers should note that annual calculations must account for both working days and statutory rest periods throughout the year.

Mexico's Progressive Income Tax System

Mexico employs a graduated income tax structure ranging from 1% to 35%, ensuring higher earners contribute proportionally more to public finances. The current tax brackets demonstrate this progressive approach:

Annual Income Range (MXN)	Tax Rate
Up to 7,735.00	1.92%
7,735.01 - 65,651.07	6.40%
65,651.08 - 115,375.90	10.88%
115,375.91 - 134,119.41	16%
134,119.42 - 160,577.65	17.92%
160,577.66 - 323,862.00	21.36%
323,862.01 - 510,451.00	23.52%
510,451.01 - 974,535.03	30%
974,535.04 - 1,299,380.00	32%
1,299,380.01 - 3,898,140.12	34%
Over 3,898,140.13	35%

Comprehensive Employer Cost Analysis

Total employment costs typically amount to approximately 20.3% above base salary. Companies like SailGlobal help international businesses navigate these complex calculations effectively.

Monthly Employer Contributions

IMSS Social Security: 643.71 pesos
Local Tax: 3.00%
Additional Social Security Costs: 1.10%*
Occupational Risk Insurance: 0.50%*
Retirement and Aging Fund: 4.241%*
Retirement Contribution: 2.0%*
Disability Benefits: 0.70%*
Disability and Life Insurance: 1.75%*
Childcare and Social Benefits: 1.0%*
Medical Expenses: 1.05%*
Infonavit Housing Fund: 5.0%*
Remote Work Allowance: 1,000 pesos monthly
Ergonomic Chair Allowance: 900 pesos (one-time)
Work Equipment Allowance: 6,000 pesos (one-time, optional)

Annual Employer Obligations

Vacation Premium: 25% of daily salary multiplied by vacation days
Year-end Bonus: 15 days' salary for employees with one year of service
Profit Sharing: 10% of company's taxable income distributed to employees

*Calculations based on the Integrated Base Salary (SBC) registered with IMSS

Overtime Regulations and Working Hours

Mexican labor law mandates strict overtime compensation with no weekly cap on overtime hours. The standard workweek ranges between 40-48 hours, distributed across five or six days.

First 8 weekly overtime hours: 200% of regular hourly rate
Additional overtime hours: 300% of regular hourly rate

Companies expanding into Mexico should consider partnering with experts like SailGlobal to ensure compliance with these complex regulations while optimizing workforce management strategies.

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