Countrypedia

Hire and manage employees in Mexico

As your Employer of Record (EOR) in Mexico, we’d help you expand by hiring employees and running their payroll without establishing a local branch office or subsidiary.
Last updated:
July 16, 2025
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Table of Contents

General Overview

Mexico, located in North America, has a dynamic and diversified economy driven by manufacturing, services, and agriculture. As a key trading partner in the region, Mexico continues to grow while maintaining strong labor laws that protect employee rights and provide clear guidelines for employers.

Employment Contracts

  • Measurable Contract: Used when an employee is engaged for a specific, definable deliverable or a set period of time.
  • Indefinite-term Contract: The most common type for full-time employment, to be used when the working relationship exceeds 180 days.

Probation Period

A trial period may be established for up to 30 days, extendable up to 180 days within the contract framework.

Working Hours

The official maximum working week is 48 hours, typically spread over six days of eight-hour shifts. Many companies condense these hours into five days to provide two days off. Overtime is paid at double the normal wage for the first nine overtime hours per week, and triple for any additional hours.

Vacation Days

Employees with one year of service are entitled to a minimum of 6 paid vacation days in their first year. An additional 2 working days are added annually through the fourth year. After five years, employers must add 2 extra vacation days every five years.

Sick Leave

Federal subsidies cover sick leave for up to 52 weeks. During sick leave, employees receive 60% of their salary, except in cases of work-related illness, which are compensated at 100%.

Wages and Salary Payment

  • The payroll cycle is bi-weekly, with payments made on the 15th day and the last day of each month.
  • The minimum wage is $141.70 Mexican pesos per day (effective January 1, 2021).

Public Holidays

Mexico observes 7 public holidays each year, plus an extra holiday on December 1 every six years (to mark the presidential inauguration). Key holidays include:

  • January 1: New Year’s Day
  • First Monday in February: Constitution Day
  • March 16 (or the third Monday in March): Benito Juárez’s Birthday
  • May 1: Labor Day
  • September 16: Independence Day
  • November 20 (observed on the third Monday): Revolution Day
  • December 1: Inauguration Day (every six years)
  • December 25: Christmas

Employees working on these holidays receive 300% of their normal wage, or 325% if the day falls on a Sunday.

Employer Taxes

Employers contribute to social security with a maximum annual contribution of MXN 138,479 (this may be higher if occupational risk premiums apply). These contributions apply to employees earning more than MXN 817,782 per year.

Employee Taxes

  • Personal income tax rates are progressive as defined for the calendar year 2021 (refer to the detailed tax brackets for exact figures).
  • Employees also contribute to social security, with a maximum annual contribution of MXN 22,243.

Notice Period

There is no obligation to serve a notice period in advance upon dismissal; notice is provided at the moment of dismissal or within 5 days. The notice must include the just causes for dismissal and the date of occurrence. Failure to deliver proper notice is deemed a dismissal without just cause.

Termination and Severance Pay

If an employee is dismissed without reinstatement, they are entitled to:

  • Three months’ salary
  • 20 days’ salary per year of service
  • An additional 12 days’ salary per year for service beyond 15 years
  • Prorated holiday pay, a 13th-month bonus, and profit-sharing dividend

If the employer cites a justified cause as defined by law, only the prorated holiday pay, 13th-month bonus, and profit-sharing dividend are payable.

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Frequently
Asked
Questions

What is International EOR and PEO?

International EOR (Employer of Record) and PEO (Professional Employer Organization) are services that enable businesses to compliantly hire, manage, and pay employees in foreign countries without the need for establishing a legal entity. EOR acts as the legal employer while PEO co-employs workers, handling administrative tasks such as payroll, taxes, and benefits.

Does Acvian handle time record submissions?

Acvian does not handle time record submissions directly. It is the client’s responsibility to track and submit employee work hours. However, Acvian can offer guidance and best practices to ensure efficient time tracking and compliance with local labor laws.

How can employees view their payroll details?

Employees can view their payroll details through the monthly payslips they receive and also via our Acvian platform. These payslips contain information on earnings, deductions, taxes, and net pay, giving employees a clear overview of their monthly payroll. Please note that in some countries, employers are restricted from viewing payslips due to data protection regulations, and only employees can share their payslips. For more details on these regulations, please contact our specialists.

How Acvian handles payroll disputes?

Acvian addresses payroll disputes promptly, working closely with both the client and the employee to investigate and resolve any issues.

Does Acvian require advanced monthly payments of salaries and service?

Yes, Acvian requires advanced monthly payments for salaries and service to ensure timely and accurate payroll processing.

Can Acvian provide consultations regarding a labor and tax legislation?

Yes, Acvian can provide consultations regarding labor and tax legislation. Our team of experts is well-versed in local regulations and can offer guidance to help your business maintain compliance, reduce risk, and navigate the complexities of international employment and taxation laws.

Which benefits does Acvian provide?

Acvian provides a diverse range of benefits, including but not limited to:

  • Health insurance
  • Car leasing
  • Gym allowance
  • Per diem compensation
  • Maternity leave

We can customize and offer many kinds of benefits requested by the client, ensuring that your employees receive the support and perks that align with your company culture and local regulations.

Can Acvian provide private health insurance?

Acvian can provide private health insurance options as part of its comprehensive employee benefits package.

What would the monthly/yearly costs for the employee be?

The monthly/yearly costs for an ‘average’ package vary depending on the specific plan and location. See our estimated price packages here. Acvian’s team can provide detailed cost breakdowns based on your requirements.

Can Acvian help with entity set up?

While Acvian doesn’t directly provide entity set-up services, we can introduce you to local lawyers who specialize in this area to assist you with your needs. See also, when it's better to set the entity or use the EOR.

Offboarding: how it is handled?

Offboarding is managed by Acvian in a structured and compliant manner. We coordinate with your business to ensure all necessary documentation, exit interviews, and final payments are completed. Acvian also ensures adherence to local labor laws and regulations, including providing any required notice periods and managing the termination process.

When does business need it?

Businesses typically need EOR and PEO services when they:

  • Expand into new international markets.
  • Hire remote employees in foreign countries.
  • Seek to streamline global workforce management.
  • Aim to ensure compliance with local labor laws and regulations.
  • Want to reduce the time and cost of establishing legal entities abroad.

Is Acvian compliant with GDPR?

Yes, Acvian is fully compliant with GDPR regulations. We collect and process personal data in accordance with the law, ensuring that data is used only for general, allowed purposes such as marketing and other legitimate business activities.

Do you provide employment agreements?

Yes, Acvian provides both permanent and fixed-term employment contracts, with the possibility of extension. After the second extension, the contract becomes indefinite.

How do employees view their payroll?

Employees can view their payroll details through the monthly payslips they receive and also via the Acvian platform.

Where can Acvian supply EOR services?

Acvian can supply EOR services in over 180 countries, encompassing almost all European nations, the United States, and Canada, providing extensive coverage to support your business’s global expansion and workforce management needs. See our coverage here.

How does payroll work under EOR?

Under EOR, Acvian manages the payroll process by:

  • Acting as the legal employer of your foreign workforce.
  • Handling salary calculations, deductions, and disbursements.
  • Ensuring compliance with local tax and labor laws.
  • Managing payroll taxes, social contributions, and benefits.
  • Providing timely and accurate payroll processing for your employees.

Explore the details here.

Can you provide support for expatriate EOR workers?

Yes, Acvian provides comprehensive support for expatriate EOR workers, including:

  • Visa and work permit assistance.
  • Relocation and housing support.
  • Local registration and compliance.
  • Payroll and tax management.
  • Coordination of benefits and insurance coverage.

Explore in details here.

What are the details of expats support?

Expats support from Acvian encompasses a range of services designed to facilitate a smooth transition for employees working abroad. Key aspects include:

  • Assistance with visa and work permit applications, renewals, and compliance.
  • Support for relocation, including housing, schooling, and local registration.
  • Guidance on local tax regulations and filings.
  • Coordination of locally compliant benefits and insurance coverage.
  • Ongoing support for any changes or issues that may arise during the expatriate assignment.

What happens after onboarding?

After onboarding, Acvian maintains an ongoing relationship with your business and employees, ensuring smooth payroll processing, managing tax and regulatory compliance, handling benefits administration, and providing support for any changes or issues that may arise in the employment lifecycle. This allows you to focus on your core business operations while Acvian manages your international workforce.

How many days will it take for our personnel to be onboarded?

The onboarding process typically takes between 2 to 4 weeks, depending on the country and complexity of the employee’s situation. However, Acvian strives to expedite this process, ensuring a smooth and efficient transition for your personnel. See our story of the urgent employment project.

Does Acvian provide in-country support for employee inquiries or assistance requests?

Yes, Acvian provides in-country or regional support for employee inquiries and assistance requests. We have dedicated managers in the countries where we support your employees, ensuring prompt and knowledgeable assistance tailored to local regulations and practices.

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