Mexico EOR & PEO

Start hiring in Mexico

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Hire in Mexico

Horizons provides compliance solutions to ensure your business in Mexico operates in line with Mexican labor laws and tax regulations. Businesses benefit from hiring in, investing in, or job outsourcing to, Mexico in a range of industries, from customer service, to accounting services, to software development.

We also process monthly payroll, and, as a Mexico Employer of Record, absorb all local employer liabilities. Partnering with our Mexico EOR is the quickest and most cost-effective way to enter the Mexican market.

Note, a Mexico Employer of Record is also known as a Mexico Professional Employer Organization (PEO).

Facts & Stats

stay compliant with Mexico labor laws

Employment Laws

Employment contracts in Mexico

Employers in Mexico are legally required to provide formal written contracts of employment for all employees. Any contract should include all relevant details such as salary/wage, termination terms, job title, and so on. Contracts should also always be written in Spanish and use the Mexican peso currency (MXN).

By partnering with our Mexico Employer of Record, Horizons’ team of local experts can provide assistance for drafting strong employment contracts that are compliant with local regulations.

Fixed-term

Indefinite

Working hours in Mexico

The average Mexican office operates between 8 am-6 pm from Monday to Friday, although this can vary by industry and company. Some companies still offer extra-long lunch breaks (or ‘siestas’), but the normal length is around one hour.

Working hours are limited to 11 per day and 50 per week, with at least one 24-hour period off per week, and if limits are exceeded then overtime pay must be provided at 1.5 x normal pay.

Public holidays in Mexico

Holiday Schedule in Mexico [2024]

There are several nationally and regionally recognized public holidays in Mexico. Employees who have to work on these days are often entitled to overtime pay:

Date	Holiday name
1 Jan Monday	New Year’s Day
5 Feb Monday	Constitution Day
18 Mar Monday	Benito Juárez’s Birthday Memorial
1 May Wednesday	Labor Day / May Day
16 Sep Monday	Independence Day
18 Nov Monday	Revolution Day Memorial
25 Dec Wednesday	Christmas Day

Vacation leave in Mexico

After one year of employment, workers in Mexico are entitled to 12 days of vacation leave. This entitlement increases by two days for every additional year up to four years of employment, then two days per five years of employment.

Many employers choose to offer more generous vacation allowances, with more senior employees regularly getting 15 or more days per year.

Sick leave in Mexico

Usually, employees can take sick leave upon agreement with their employer, and compensation will depend on the individual agreement. In cases of non-work-related sickness, employees can access a government-funded 60% of wages if they present a doctor’s note, and for work-related sickness, they can receive 100% of wages.

Maternity and Parental leave in Mexico

Mothers can take six weeks of paid maternity leave before and after their birth date (12 weeks in total), and fathers can take five days of paid leave. The government covers these payments, and the limit is 2500% of the minimum wage.

It is common for employers to offer additional payments as part of benefits packages.

Employee severance and terminations in Mexico

Termination payments in Mexico are very complex and are made up of a variety of inputs:

– Unpaid wages
– Holiday bonuses
– Outstanding vacation days
– 13th month bonuses
– Any other benefits or payments included in the contract of employment

If employees are terminated without proper cause, they may also be entitled to a severance payment. In these cases, the employee will receive three months of salary, an additional 20 days for every year of employment, and a seniority bonus of 12 days of salary for every year of employment (at a limit of 200% minimum wage).

In practice, many terminations will result in a severance payment as it is notoriously difficult to prove ‘proper cause’ to the authorities.

Navigating employee terminations and handling severance packages can be complicated for companies expanding overseas for the first time. Horizons’ Mexico EOR can mitigate risk for foreign companies and provide guidance through this process.

Taxation in Mexico

Mexico follows a progressive taxation system, with employees paying a higher percentage in tax at higher income levels, with a maximum rate of 35%. Non-residents pay up to 30%.

The corporate tax rate in Mexico is 30%.

Contributions for retirement are unique and difficult to understand. The Mexican Administrator of Retirement Funds (AFOREs) handles retirement and housing accounts for employees, and workers can choose what they want to start funding, then employers will have to contribute a percentage of salary to these funds. The percentages can vary for the type of worker, and AFORE accounts will be automatically assigned by the government if an employee hasn’t chosen an account after one year of employment.

Health coverage in Mexico

The IMSS provides healthcare coverage for Mexicans, so health benefits are not strictly necessary through employers. However, the healthcare system is known for long wait times and shortages, so it’s fairly common for employers to offer private insurance.

hassle-free Mexico compensation & benefits

Compensation & Benefits

Compensation Laws in Mexico

As of January 2024, the minimum wage in most of Mexico is MXN 248.93 (approximately USD 14.50) daily. There is a higher rate in the northern border states which is MXN 374.89 (approximately USD 21.83) per day.

The aguinaldo (or Christmas Bonus) is a yearly bonus, which employees in Mexico are also entitled to at a rate of 0.5 months’ – 1 month’s salary, and sometimes more depending on the employer.

Employers are also required to pay a ‘Vacation Premium’ to employees taking annual leave. The vacation premium is a lump sum paid at a rate of 0.25 times the annual salary, to be paid on employees’ work anniversaries.

Benefit management in Mexico

Establishing a Mexican benefits package as a foreign employer can be a difficult process, and administrative procedures to follow, complex laws, and language barriers.

A simple solution is to outsourcing your Mexico benefits management to Horizons. We can establish your benefits system quickly and effectively, offering expert guidance along the way so you can focus on a successful expansion operation.

Horizons’ Mexico EOR can provide expert guidance to help simplify the process of expanding into Mexico.

Mexico Employer Of Record Peo

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Hire in Mexico

Employment Laws

Working hours in Mexico

Public holidays in Mexico

Compensation & Benefits

Frequently asked questions

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Hire in Mexico in 24h without your own local entity.

With Horizons, you get quick service, transparent pricing, and expert support.

Frequently asked questions

What is the difference between a Mexico PEO and a Mexico EOR?

Generally speaking, the terms “Mexico PEO” and Mexico EOR” are used interchangeably.

Can an EOR in Mexico hire both local and foreign nationals to work in Mexico?

An EOR in Mexico can feasibly hire both local and foreign nationals to work in Mexico.

However, the ability of Horizons to sponsor your foreign national employee in Mexico may be limited due to visa quotas practiced in many countries.

Contact us with your requirements and our Global Mobility team with review the case and get back to you within 2 business days.

How long does Horizons' Mexico EOR service take to hire an employee?

In most cases, Horizons’ Mexico EOR can hire & onboard your employee within 12 hours. The actual start date of the employee will depend on their notice period obligation to their previous employer as well as any relevant hiring rules in Mexico.

Is it possible to get a work visa in Mexico?

It is possible to get a work visa in Mexico. Horizons’ Global Mobility team is a dedicated team of work visa experts. They assess the details of each case to determine feasibility and costs before Horizons applies for the work visa on behalf of your employee. If the Global Mobility team determines that your case is feasible, the process is smooth and transparent. Visa spots in Mexico are limited, however—get started today to secure your employees’ visa spot.

Mexico EOR & PEO

Start hiring in Mexico

Simple, compliant hiring with Horizons EOR

Hire in Mexico

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stay compliant with Mexico labor laws

Employment Laws

Employment contracts in Mexico

Fixed-term

Probationary period

Termination notice period

Severance

Special note

Indefinite

Probationary period

Termination notice period

Severance

Working hours in Mexico

Public holidays in Mexico

Vacation leave in Mexico

Sick leave in Mexico

Maternity and Parental leave in Mexico

Employee severance and terminations in Mexico

Taxation in Mexico

Health coverage in Mexico

hassle-free Mexico compensation & benefits

Compensation & Benefits

Compensation Laws in Mexico

Benefit management in Mexico

Hire in Mexico in 24h without your own local entity.

Frequently asked questions

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