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Global Expansion Guide

Mexico

Manage and pay your employees easily with BIPO in Mexico and 170+ other markets. Build your international teams today with our global Employer of Record service!

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Currency

Mexican Peso (MXN)

employment guide_language

Language

Spanish

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Capital

Mexico City

Employer of Record Mexico

Employment Contract

Statutory Contributions

Minimum Wage

Public Holidays

Working Hours

Leave

Termination and Compensation

BIPO as your Employer of Record

Benefits of BIPO EOR Service in Mexico

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Employer of Record Mexico

Embark on your business expansion in Mexico with BIPO’s Employer of Record (EOR) services. Designed to assist you in navigating the intricacies of local employment laws and regulations, we can help ensure a smooth transition for your business and workforce.

As an Employer of Record (EOR), we act as your legal employment entity, streamlining the process of business expansion. Allowing businesses to focus on their core business operations while the EOR manages all aspects of compliance, payroll, HR, and employee benefits when venturing into the Mexican market. An EOR provider addresses the common challenges associated with local employment laws, payroll regulations, and work permit requirements.

This guide was last updated on 1 June 2026. The content in this guide is current as of this date and based on common business practices.

Employment Contract

  • Employers hiring union members shall enter into a collective labor contract upon the union’s request. The collective contract must be in writing and executed in triplicate, with one copy held by each party.

  • In the absence of an applicable collective labor contract, individual employment contracts must be in writing and executed in duplicate, with one copy held by each party. The employment contract shall include:

    • Name, nationality, age, gender, marital status, Unique Population Registry Code, Federal Taxpayer Registry Code, and address of the employee and employer;
    • Type of employment relationship (specific project, fixed-term, seasonal, initial training, or open-ended) and whether a probation period applies;
    • Services to be provided or job duties, described as specifically as possible;
    • Work location or workplace;
    • Working hours;
    • Form and amount of salary;
    • Date and place of salary payment;
    • Training or skill development programs established or to be established by the enterprise;
    • Other working conditions (rest days, holidays, and other agreed terms).

Statutory Contributions

Scope of Application: Applicable to employees of private enterprises.

Social Insurance TypeBaseEmployee ContributionEmployer Contribution
Sickness & MaternityFixed RateUMA*–20.40%
Additional RateOver 3xSMG**0.40%1.10%
Cash BenefitsSBC***0.25%0.70%
Retirement Medical0.375%1.05%
Disability & Death0.625%1.75%
Unemployment & PensionPension–2.00%
Unemployment1.125%3.15%
Daycare & Social Benefits–1.00%
Work Injury–By industry risk
Housing Fund–5.00%

Notes

  • *UMA: MXN 117.31/day, MXN 3,566.22/month (2026)
  • **SMG: Minimum wage, MXN 315.04/day (2026)
  • ***SBC: Integrated contribution salary (base salary + fixed allowances + fixed benefits); capped at 25×UMA

Minimum Wage

Effective 1 January 2026, the minimum wage rates of Mexico are set as follows:

  • National Minimum Wage: MXN 315.04/day
  • Northern Border Free Zone: MXN 440.87/day

Public Holidays

The public holidays listed below are national public holidays observed across Mexico. Individual states and territories may observe additional public holidays. Please refer to official government announcements for the latest updates.

  • New Year’s Day
  • Constitution Day
  • Benito Juárez’s Birthday
  • Labour Day
  • Independence Day
  • Revolution Day
  • Christmas Day

Notes

  • No mandatory compensatory day off if a public holiday falls on a scheduled rest day.
  • Overtime Compensation: Employees required to work on public holidays receive 300% of regular wage.
  • Exemptions from Overtime Compensation: No statutory exempt groups.

Working Hours

Normal Working Hours

Category Daily Weekly
Day Shift (06:00 – 20:00) 8 hours 48 hours
Night Shift (20:00 – 06:00) 7 hours 42 hours
Mixed Shift (Night portion < 3.5 hours) 7.5 hours 45 hours

Work Break

At least 30 minutes.

Weekly Rest

1 day per week, typically Sunday.

Overtime Compensation

  • First 9 overtime hours per week: 200% of regular wage;
  • Overtime exceeding 9 hours per week: 300% of regular wage;
  • Work on weekly rest day (usually Sunday): 125% of regular wage;
  • Overtime on weekly rest day: 300% of regular wage.

Leave

Annual Leave

  • Type of employer: Single employer
  • Eligibility: 1 year of continuous service

  • Duration:

    • 1 year of service: 6 days; +2 days per additional year, up to 12 days;
    • After 4 years of service: +2 days per additional 5 years
  • Allowance: Full pay + 25% bonus, paid by the employer
  • Encashment: Unused annual leave upon termination must be fully compensated

Sick Leave

  • Eligibility: All employees
  • Allowance Eligibility: Registered in social security for 4 weeks within the preceding 12 months
  • Duration: Based on medical condition

  • Allowance:

    • First 3 days: Unpaid;
    • Day 4 until recovery (max. 52 weeks): 60% of regular wage, paid by social security;
    • Extension: Up to 26 more weeks with medical evaluation; 60% of regular wage, paid by social security

Maternity Leave

  • Eligibility: Pregnant or giving birth female employees
  • Allowance Eligibility: Registered in social security for 30 weeks within the preceding 12 months

  • Duration:

    • 42 days before childbirth, 42 days after childbirth
    • Up to 4 weeks of prenatal leave may be moved to postnatal period upon employee request, medical approval, and employer consent
    • Postnatal leave may be extended from 6 weeks to 8 weeks if the newborn has disabilities or requires hospitalization (with medical certificate)
  • Allowance: Full pay, paid by social security

Other Leave Types

  • Adoption Leave: Female employees adopting a child; 6 weeks; paid
  • Breastfeeding Leave: Up to 6 months postpartum; 2×30 minutes per day; paid
  • Paternity Leave: For childbirth or adoption; 5 days; paid
  • Statutory Duty Leave: Voting, jury service, etc.; actual duration; paid

Termination and Compensation

Termination Notice Period

  • No legal notice period required.
  • Either party may terminate the employment relationship for just cause at any time without liability.

Compensation

  • Fixed compensation (unjust dismissal): 3 months’ salary

  • Additional compensation (unjust dismissal):

    • Open-ended contract: 20 days’ salary × years of service

    • Fixed-term contract:

      • < 1 year: 0.5 × total salary
      • ≥ 1 year: 6 months’ salary for the first year, +20 days’ salary per additional year
  • Back wages: Up to 12 months’ salary, plus 2% monthly interest for late payment

BIPO as your Employer of Record

BIPO’s total HR solutions include our award-winning HR Management System, Global Payroll Outsourcing, Employer of Record service, and Athena BI.

As your EOR partner, our services are designed to provide a comprehensive, hassle-free experience:

  • Initial Consultation: The journey typically begins with an in-depth discussion to understand your specific business needs, ensuring our EOR services perfectly align with your objectives.
  • Payroll Management: We offer a streamlined payroll system that ensures timely and accurate salary disbursement, complete with statutory deductions and contributions in full compliance with Mexico’s regulations.
  • Contributions and Taxes: Our expertise in managing local social security requirements ensures your business complies with in-country financial obligations.
  • Compliance with Minimum Wage and Working Hours: We guarantee that your employment practices adhere to the Mexican minimum wage and working hours standards, safeguarding your business against potential legal issues.
  • Leave and Paid Time Off Management: Implement and manage leave policies that comply with Mexico’s laws, ensuring a fair and transparent leave management system for your employees.
  • Regulatory Compliance: Stay ahead of local labour laws and regulations with our up-to-date compliance services, minimising legal risks for your business.
  • Other services: Work visa, permit applications, termination procedures.
Services may vary across countries.

Benefits of BIPO Employer of Record Service in Mexico

Unlock your growth potential with BIPO’s Employer of Record service in Mexico. Our EOR service empowers businesses with seamless scalability while ensuring regulatory compliance.

From smooth onboarding to risk mitigation, BIPO handles the administrative HR tasks, enabling companies to concentrate on core business functions and accelerating growth. Our local expertise and global reach ensure efficient operations, enhancing flexibility and reducing operational complexities.

Stay up to date with the latest employment regulations.

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Frequently Asked Questions

An Employer of Record (EOR) is a partner company that acts as the official employer for your employees. 

An EOR company handles all the HR aspects and processes, including the legal complexities associated with regulatory and tax compliance.

As your EOR, BIPO supports your organisation by providing a comprehensive range of HR, payroll and advisory services to ensure your business stays compliant. These include end-to-end on/offboarding services for your employees (e.g.: payroll processing, HR and benefits administration, labour contracts, visa applications, payroll/tax compliance, and more).

By engaging BIPO as your EOR, your business benefits from: 

  • Compliance in the global markets where you operate
  • Reduced costs and risk mitigation
  • Overall workforce productivity, effectiveness, and efficiencies

A global EOR benefits organisations regardless of size or industry. It is especially useful for organisations that want to:

  • Scale their global business and be fully operational in foreign markets quickly
  • Reduce financial and HR complexities while expanding internationally
  • Minimise time spent trying to understand local labour laws and foreign tax systems
  • Stay compliant across global markets while reducing HR and administrative workflows
  • Benefit from a centralised and intuitive cloud HR platform to manage international teams

A global EOR enables businesses to fast-track their market entry into international market, and reduce the complexities of setting up multiple foreign entities.

When you partner with BIPO, we take on the the day-to-day administrative tasks, while you maintain full control of the business and delegate HR workflows and hiring needs.

Our vast network of business partners across 170+ markets globally supports your business expansion plans, with in-country HR experts providing localised support. Going global has never been easier!

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