EOR Service in Mexico

Hire, Onboard and Pay Employees in Mexico Quickly and Efficiently

Hiring in Mexico at a glance

CURRENCY
Mexican Peso (MXN)
working hours
48 hours, typically spread across six working days
public/bank holidays
7
capital
Mexico City
language
Spanish
date format
DD/MM/YYYY
remote workers
1.2M
tax year
Calendar year (January 1 to December 31)
minimum hourly salary
No minimum wage
CURRENCY
Mexican Peso (MXN)
working hours
48 hours, typically spread across six working days
public/bank holidays
7
capital
Mexico City
language
Spanish
date format
DD/MM/YYYY
tax year
Calendar year (January 1 to December 31)
payroll frequency
Biweekly (every two weeks)
GDP
$1,414.19B (2022)

Employer of Record in Mexico

If you're thinking about growing your business in Mexico, teaming up with an Employer of Record (EOR) is a smart move. An EOR in Mexico handles all the employment responsibilities and risks for your company, making sure you can hire and expand with compliance. This includes taking care of payroll, taxes, and following local labor rules. With an EOR, you still run the day-to-day tasks with your employees, but the EOR becomes their official employer.


Why use Mexico EOR?

Mexico’s labor laws are heavily influenced by various factors such as its constitution and collective bargaining agreements. Due to Mexico's participation with international regulatory bodies, labor laws are also revised based on the International Labor Organization. 


Moreover, foreign employers also need to establish a legal entity to hire in Mexico. For example, a U.S. tech company, to hire in Mexico, would need to register with the National Registry of Foreign Investments and follow specific procedures. Employers incur a lot of monetary and opportunity costs because of this.


Opting for a Mexico EOR/PEO provides a streamlined and compliant approach to hiring without the need for a formal corporation setup. Gloroots' PEO services enable efficient recruitment, legally licensing personnel through our Mexico affiliate. This eliminates legal complexities, allowing personnel to start working within days. EORs/PEOs are a responsive solution for hiring, market research, and adjusting to Mexico's dynamic business demands. 

EOR Costs in Mexico

PEOs often offer fixed or variable pricing models. Fixed pricing involves charges per employee annually, while variable pricing is based on a percentage of yearly payroll.

At Gloroots, we adopt an employee-based pricing approach. Our transparent PEO cost for full-time employees starts at a monthly rate. This fee may vary based on the employee's location and role. It covers global payroll, leave management, and additional benefits. For freelancers, there's a separate monthly fee covering onboarding and global payment.

Our streamlined Mexico EOR solutions simplify payroll and benefits for your global team. Gloroots provides advanced PEO technology for seamless global HR management.

Key Metrics For Foreign Employer 

The table below depicts key indicators from the Global Talent Competitiveness Report for employers wishing to hire from Mexico.

Factors Global Ranking Interpretation
Rule of law 106 Indicates effectiveness of law enforcement
Labour-employer cooperation 61 Indicates positive labor-employee relationships
Reading Maths, and Science 56 Indicates average scores in OECD's survey of 15-year old students
University Ranking 24 Indicates average QS rankings
Labour productivity per employee 62 Indicates total output by the total labor input used to produce that output
Ease of finding skilled employees 70 Indicates findability of skilled talent
Workforce with tertiary education 75 Indicates % of workforce with PG degrees
Digital Skills 23 Indicates prevalence of advanced digital skills in the population

Source: The Global Talent Competitiveness Index 2022

Why work in Mexico ?

What’s a Rich Text element?

The rich text element allows you to create and format headings, paragraphs, blockquotes, images, and video all in one place instead of having to add and format them individually. Just double-click and easily create content.

Static and dynamic content editing

A rich text element can be used with static or dynamic content. For static content, just drop it into any page and begin editing. For dynamic content, add a rich text field to any collection and then connect a rich text element to that field in the settings panel. Voila!

How to customize formatting for each rich text

Headings, paragraphs, blockquotes, figures, images, and figure captions can all be styled after a class is added to the rich text element using the "When inside of" nested selector system.

Grow your team in Mexico

Expanding your team involves strategically recruiting suitable talents at the right juncture and for the relevant roles. In Mexico, managing compliance, payroll, taxes, and benefits requires a local entity. To start a business in Mexico, begin by selecting the suitable business structure among three popular choices:

1. Stock Corporation: Widely preferred, divides value into shares. Minimum capital is MXN50,000 or $2,700.

2. Limited Liability Company (LLC): Ideal for small-medium businesses. Minimum capital is MXN3,000 or $160. Individual tax shares for members.

3. Simplified Shares Company: Quick and cost-effective. Suited for simple corporate setups, especially SMEs.

The intricacies of Mexican employment regulations can be challenging. Gloroots offers a comprehensive global Employer of Record (EoR) service, allowing you to offload the complexities of payroll, taxes, benefits, and compliance to Gloroots. This empowers you to focus on your employees and propel your company's growth without being weighed down by administrative burdens.

Risks of misclassification

"Misclassification of employees" pertains to the incorrect categorization of workers by their employers. It occurs when a worker is wrongly labelled as an independent contractor or is exempted from specific employment laws and benefits, despite deserving employee status with legal safeguards, benefits, and rights.

Engaging a PEO/EOR in Mexico aids in reducing misclassification risks. This is achieved through labor law adherence, accurate employee classification, precise payroll handling, and comprehensive benefits. This way, businesses can prioritize core operations while entrusting employment matters to seasoned professionals.

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Avoid hefty penalties with Gloroots.

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Employing in Mexico

What’s a Rich Text element?

The rich text element allows you to create and format headings, paragraphs, blockquotes, images, and video all in one place instead of having to add and format them individually. Just double-click and easily create content.

Static and dynamic content editing

A rich text element can be used with static or dynamic content. For static content, just drop it into any page and begin editing. For dynamic content, add a rich text field to any collection and then connect a rich text element to that field in the settings panel. Voila!

How to customize formatting for each rich text

Headings, paragraphs, blockquotes, figures, images, and figure captions can all be styled after a class is added to the rich text element using the "When inside of" nested selector system.

Tax

Employee Income tax

Income Tax Rate Income Range
1.92% Up to 8,952.49
6.40% 8,952.50 – 75,984.55
10.88% 75,984.56 – 133,536.07
16.00% 133,536.08 – 155,229.81
17.92% 155,229.81 – 185,852.57
21.36% 185,852.58 – 374,837.88
23.52% 374,837.89 – 590,795.99
30.00% 590,796.00 – 1,127,926.84
32.00% 1,127,926.85 – 1,503,902.46
34.00% 1,503,902.47 – 4,511,707.37
35.00% Over 4,511,707.38

Several Mexican states impose modest taxes on employee salaries and other earnings, typically paid by the employer. As an instance, in Mexico City, there is a 3% payroll tax.

Tax and Social Security contribution

Employer Payroll Contributions

Contribution Type Rate Range Notes
Social Security (IMSS) 24.95% – 33.58% Max annual contribution: 195,235 MXN
Retirement 5.15% -
National Housing Fund (INFONAVIT) 6.00% -
Total Employment Cost 36.1% – 44.73% The sum of the above contributions

Employee Payroll Contributions

Contribution Type Rate Notes
Social Security (IMSS) 1.65% Max annual contribution: 25,656 MXN
Retirement/Old Age Insurance 1.125% -
Total Employee Cost 2.775% -

Separation

Mexico doesn't practice at-will employment, and clauses allowing termination at-will apply only to employees. This means employers can't end employment without valid reasons. The Mexican Federal Labor Law outlines specific reasons and steps for terminating employees without facing legal repercussions. Below are the reasons specified:

1. Providing false qualifications for work.

2. Violating principles of obedience or honesty.

3. Engaging in vandalism.

4. Committing sexual harassment.

5. Demonstrating alcoholism at the workplace.

6. Disclosing company secrets.

7. Refusing safety procedures.

8. Accumulating four unexcused absences in 30 days.

Severance Pay

In Mexico, letting go of an employee without valid reasons necessitates providing severance. This severance package should include three times the regular monthly salary, along with an extra 20 days' pay for every year of service beyond 15 years.

Regarding voluntary resignation and termination with proper cause: Employees with more than 15 years of service are entitled to a seniority premium of 12 days' pay for each year worked.

Notice Period

Mexico doesn't set specific minimum notice periods by law. However, according to federal labor law, if the situation demands, the employer must provide written notice to the employee within 30 days of becoming aware of any misconduct. This notice should detail the reasons for termination, or the labor board will issue a termination notice. It's a common practice to offer a two-week notice as a courtesy in cases of 'termination without cause' or resignation.

Probation period

In Mexico, the probationary period for permanent employees is not mandatory and typically lasts for 90 days.

Start Hiring in Mexico today

When expanding your workforce globally, ensuring compliance can be a real challenge. You have to make sure that every step of hiring and onboarding follows employment laws, payroll procedures, DE&I compliance, GDPR, and data protection regulations. If setting up local entities and hiring is complex, staying on top of a dynamic compliance landscape is even tougher.

Gloroots simplifies everything by offering a central platform to manage these tasks. Our internal experts protect you from risks related to cross-border employment and payroll compliance. We handle tasks like creating employment contracts, ensuring timely payments, providing compliant benefits, so you can focus solely on talent screening.

Our commitment is to give you and your employees a hassle-free global employment experience. Reach out to our experts today to kickstart your global hiring journey.

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Experience Seamless Hiring in Mexico ?

Let us take care of all your employment needs. We guarantee easy onboarding & compliant workforce management in Mexico .

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